The role of trust in innovation systems An

The role of trust in innovation systems: An Irish Festival experience – Conor Mc Tiernan School of Tourism, LYIT

Introduction Ø The purpose of this study is to examine the role of trust in achieving the individual organisational goals of members of an Irish festival innovation system (IS). Ø Ph. D inspired by Anne-Mette Hjalager’s 2009 paper Cultural Tourism Innovation Systems - The Roskilde Festival. Ø I was intrigued by her analysis of the co-operation between private and public stakeholders, engagement with the local community; the tangible and intangible benefits for festival organising committee, local community and other local and regional stakeholders. Most importantly, level of trust between stakeholders.

Rationale for study Ø Prompted the question – what are the antecedents for, and barriers and enablers of achieving an organisations objectives within an innovation system and does such collaboration exist within the Irish festival industry? Ø Have found case studies on a variety of innovation systems, including tourism related IS, many refer to importance of trust, but I haven't found any specifically addressing the role of trust in festival or event IS, nor do I know of a forthcoming study from an Irish perspective.

What’s the rationale for an IS? Ø Collaboration is a method of improving innovation performance (Wang et al, 2011). Ø Facilitates sharing of knowledge for purpose of improving products and processes (Cohen and Levinthall, 1990). Ø They enhance knowledge management (KM) skills (Galbraith, 2002) and Argote and Ingram (2000) posit IS are closely linked with innovation and competitive advantage. Ø Davenport and Prusak (2000) emphasise close relationship between organisational culture and KM and Easterby-Smith et al (1998) stress the importance of the social contexts in which individuals and organisations learn. Ø IS are more than just knowledge sharing entities - many variables to be considered.

Is structure of IS important? Ø Many studies site Schumpeter, Marshall etc. in the 1930’s. Can take many forms – NIS, RIS. Most tourism studies examine networks and clusters Hjalager, Cooper etc. Ø Networks - Oughton and Whittam (1997) suggest nonmarket relationships, require active rather than passive involvement, a-spatially located members to achieve goals using co-operation rather than competition. Ø Clusters - (Ter Wal and Boschma, 2011 from Asheim, 2011) market relationships, typically spatially restrictive and competitive by nature.

Central issue…KM in IS Ø Knowledge management and related knowledge transfer: Canter et al (2011), Rhodes et al (2008) - knowledge acquisition, identification, development, diffusion and usage. Ø Two types of knowledge: Explicit and Tacit and (Argote and Ingram, 2000) tacit knowledge transfer considered more difficult due to knowledge embeddedness in individuals and teams and (Tsai, 2001) knowledge stickiness. Ø Other knowledge issues include: Ø absorption capacity (Cohen and Levinthal, 1990), Ø articulation and codification (Cohendat and Steinmueller, 2000) Ø the taxonomy of knowledge transfer (Spraggon and Bodolicia, 2011)

KM from and organisational view Ø Bagio and Cooper (2010) suggest comparing KT to the diffusion of a disease - recipient must be ‘susceptible’ and become ‘infected’ – organisation may ‘recover’ as knowledge gaps identified have been closed or become ‘susceptible’ again. Ø Organisational culture must have a positive outlook to KT (Novelli et al, 2006) and buy-in to the process and encourage development of relational capital through regular face-to-face meetings (Dyer and Singh, 1998). Mohr and Nevin (1990) suggest sharing solutions to problems etc. encourages relational capital. Ø Dovey (2009) posits that trust is evidence of such relational capital.

Role of organisation culture Ø Sounds great – shouldn’t every organisation embrace IS and KM? ? ? Ø Cameron and Quinn’s (1999) Competing Values Framework suggests 4 types of organisation cultures based on their internal and external focus in terms of differentiating or integrating with competitors and their desire for stability and control vs those who are flexible and allow discretion to employees. Ø Cooke (2001), Bagio and Cooper (2010), Shaw and Williams (2009), Jones (2005) show IS whose member organisations support new ideas, have senior management support and allocate appropriate resources to networks, who promote social cohesion in a horizontal/ non-hierarchical have the best chance of success – so its not for everyone.

Maybe if the circumstances were right Ø If organisations trust each other might that diminish the individuals and the organisations lack of desire to participate? Ø Consistently, academic studies on Tourism IS refer to trust as an enabler of Knowledge transfer. Ø Nahapiet and Ghosal (1998) posit Trust is a social capital resource, embedded in people and developed over time. Ø Its an alternative to contracts. Ø Trust is a fragile resource (Maurer, 2010) – important to have stability in collaboration team. Ø People must expose vulnerabilities – not easy. Clegg et al (2002) proposed 2 key imperatives ‘Trust that is heard’ and ‘trust that will benefit’.

Why trust, why join an IS? Ø Organisations partake in collaborations to achieve stated organisational goals – ergo they act in an individualistic manner. Ø Collaboration partners must align their selfish motivations, which according to Khatri and Tsang (2003) creates cliques and classifies people as ingroup or outgroup members where ingroup members are given interaction, rewards, support and trust. Ø Erez and Earley (1993) state that ingroup members place importance on relational capital and Bunduchi (2008) posits KT should therefore not be considered in terms of traditional transaction cost economics but in terms of relational exchanges. Given this, Lambe, Wittmann and Speakman (2001) support the use of Social Exchange Theory (SET) to understand these collaborative relationships.

What is SET? Ø Frame of reference that allows for movement of valued resources through a social process based on rewarding reactions from others (Emerson, 1976). Ø It acknowledges that exchanges are dependant on attitudes of people who frequently engage in mutually rewarding exchanges.

What exactly is Trust? Ø Diverging views of trust – economists, psychologists, sociologists. No interdisciplinary definition. Ø Much commonality – trust requires presence of risk. Ø In general, trust is based on fact that the trustor (giver of trust) believes trustee (recipient of trust) will not exploit vulnerabilities. Ø Trust is a psychological state based on rational choice and behaviour (Kramer, 1999). Ø Trust exists in many forms; Multi-level, trust between organisations, multidisciplinary trust, trust as a cause/impact or moderator and finally trust as an impact of organisation change (Rousseau et al, 1998)

Bases of trust Ø Much debate in academia, yet in general it is acknowledged there at least six bases of trust; first two based on individual perception and behaviours : 1. Dispositional trust 2. History based trust Ø Remaining four are forms of presumptive trust: 3. Third party as conduits of trust 4. Category based trust 5. Role based trust 6. Rule based trust

Structure and indicators of trust Ø Trust is not static; moves from calculative based trust to relational trust over time – yet this is predicated by the existence in institutional trust (Rousseau et al). Ø At multidisciplinary level common language in terms of indicators of trust; ability, benevolence and integrity.

Methodology Ø Have support from AOIFE. Ø As the study is framed by AIOFE, Anderson et al (1994) suggest development of case study and Stake (1995) posits that this allows for researcher to interact sufficiently with respondents. Ø Propose a non-positivistic paradigm as it allows for contextual interaction between actors and construct to meaning of terms (Hakensonn and Snehota, 1997) Ø Potentially using Jacksons four step scale construction: 1. theoretical based definitions, 2. reliability and homogeneity, 3. suppression of response bias and 4. convergent and discrimination validity.

Potential research questions Ø The purpose of this study is to examine the role of trust in achieving the individual organisational goals of members of an Irish festival innovation system (IS). Ø Key objectives of the study may include assessment or examination of: Ø Participation rates of AOIFE members in ingroup and outgroup collaboration projects, Ø Key challenges and barriers to the adoption of appropriate knowledge transfer conduits within Irish festival IS, Ø The antecedents and determinants of trust in an Irish festival IS context, Ø The relationship between trust and knowledge transfer in ingroup and outgroup exchange, Ø The role of trust in achievement of IS collaboration goals Ø The role of trust in the achievement of the organisations goals when they are members of IS’s.