Presupuesto de gastos

The model in Figure 4.2 confirms the strong relationship between the use of the network (sources), learning and absorption (Goes and Park, 1997; Powell et al., 1996). The findings from the present study support the conclusion from previous social network perspective studies that network cohesion (overlapping ties among mutual third-parties) and network range (relationships that span multiple knowledge pools) need not to come at the expense of each other, but approach an optimal network structure when elements of both are combined (Burt, 2000; Reagans and Zuckerman, 2001; Reagans et al., 2003). The current research confirms the importance of stronger ties for the transfer of detailed knowledge (Granovetter, 1982; Hansen, 1999, Reagans and McEvily, 2003; Krackhardt, 1992; Uzzi, 1997) by showing a positive relationship between networking frequency and pig farmers’ innovativeness. At the same time it shows that diversity of knowledge (Burt, 1992, 2005; Rosenkopf and Nerkar, 2001) is important, but confined to a specific range of actors. In the case of investment in pig welfare, frequent contact with Innovation Centre Sterksel and breeding farms in specific, but also with supermarkets, butcheries, governmental innovation and knowledge, education institutions and animal welfare organisations is important. In the case of planet-oriented innovations, it is important to maintain frequent contact with the same list of institutions, but including the Ministry of Infrastructure and Environment and environment-oriented organisations such as Milieudefensie and SNM. The latter have a role in issues such as reduction of manure surplus and ammonia emissions. The list of frequent contacts of farmers who invest in people-oriented innovations resembles that of farmers who invest in planet-oriented innovations. The somewhat wider network of farmers who are engaged in planet and people-oriented innovations than of those who engage in pig welfare may be related to the somewhat higher interest of the planet and profit innovators in the efficiency aspect. While pig welfare also contributes to better and healthier pigs, innovations which are aimed at planet (environment) and people (labour) have a somewhat greater emphasis on efficiency and higher returns than the pig welfare innovations. The greater interest in efficiency in general may be the reason why the planet and people innovators explore a larger amount of possibilities in a wider network.

However, the theoretical contribution of this study is specifically related to the organisation of networking behaviour as part of the organisational capabilities of the firm. When studied from a social network perspective, the structural and relational aspects of ties are related to innovativeness and innovation performance (Granovetter, 1982; Krackhardt, 1992; Hansen, 1999; Reagans and McEvily, 2003; Burt, 1992, 2005). The role of absorptive capacity is often addressed, but mostly in the form of proxies of absorption, such as control variables which could account for differences in absorptive capacities among different actors (Reagans and

McEvily, 2003) or firm’s total expenditures on in-house R&D (Escribano et al., 2009). While the definition of absorptive capacity developed into ‘a dynamic capability that influences the firm’s ability to create and deploy the knowledge, the (four) organisational capabilities’ (Zahra and George, 2002, p.186) are ignored by this stream of research. The finding in the present study that networking frequency is positively related to acquisition and assimilation capacity leads to the conclusion that networking frequency can be considered as an organisational capability of the firm reflecting the intensity and direction of efforts to acquire external knowledge.

4.6.5 Practical implications and suggestions for further research

The most important practical implication of this study is that pig farmers should organise their knowledge accruing and learning process in such a way as to recognise shifts in the technical possibilities, regulatory and market competition changes and new possibilities to serve customers. A networking frequency of once every two months with breeding farms and consultancies (feed, technical application and installation, business advice), once every six months with slaughterhouses and Health services for pigs, and around once yearly contact with butcheries, Product Boards Livestock and Meat (PVV), Ministry for Environment, Agriculture and Innovation (ELI) and Pigs Innovation Center Sterksel can help the farmers to organise themselves for a higher level of assimilation capacity. Recognition of these technical, regulatory, market and consumer changes can also be stimulated through organisational routines such as regular meetings with business partners, participation in meetings organised by the sector, time spent on and building of skills to establish contact with actors which can provide the relevant knowledge about innovations in the sector.

The capacity to exploit external knowledge contributes most to profitability. In order to enhance the exploitation capacity, the capacity to transform knowledge is important. Transformation capacity entails discussion with advisors about new trends in the market, storage of knowledge for future use, discussion with external advisors about the way in which changes in the market can be used to improve business and building of skills to recognise quickly the usefulness of external knowledge. Transformation capacity stimulates the farmers to maintain contact with a wide network of actors with different frequencies of contact. Consultancies, accountants, banks and feed companies seem to be the partners with whom almost monthly contact is maintained. Learning, through assimilation and networking, is important for enhancing the innovativeness and profitability of pig farmers. However, there are additional aspects which affect the level of innovativeness of firms, such as entrepreneurial and market orientation (Hult et al., 2004). Entrepreneurial antecedents of pig farmers’ innovativeness could be represented by their level of risk adversity. The question of how much risk the farmer is willing to take, which type of innovation he is willing to engage in and how long he would like to continue his business could affect his level of innovativeness. These issues need further investigation.

surplus of pig meat in Europe and strong competition in the entire supply chain, cooperation is needed to realise innovation at the chain level. The question is what kind of role the pig farmers need to play in each of the different types of innovations and which (chain) actor should take

the lead. A good example is the Beter Leven concept, developed by the Animal protection

society (Dierenbescherming), in cooperation with retailer Albert Heijn and meat company

Vion. Animals are produced under higher welfare standards and sold at a slightly higher price. This kind of marketing concepts based on sustainability items is developed further by other retailers and companies. This innovation is successful, but without the engagement of the meat processing company and the supermarket, the farmer could not have realised such an innovation. The supermarkets play a major role in the establishment of the meat price and are important in organisational terms for the realisation of innovation in this area. Interesting for future research is thus the mapping of the role of different chain actors in case of different types of innovations and the specific knowledge (types) exchanges required to enable these different types of innovation. Specific knowledge and collaboration among specific actors for the purpose of solving the welfare problem is different from knowledge and collaboration with actors in the development of new market concepts since innovations take place at the farm, instead of just at the meat processing level.

In addition to the learning and entrepreneurial orientation, as well as the organisational requirements attached to the type of innovation in which a farmer engages, the financial capacity and the general economic situation also need to be taken into account as determinants of innovativeness. The extent to which farmers are successful in assuring financial means for innovation from their network is difficult to establish, but 48% of the farmers do indicate making use of their network intensively for the purpose18 _{of acquiring funding or subsidies.} When investments in (hardware) stable changes are concerned, it is the poor economic situation which provides less room for investment. For this reason, the farmer needs assurance that added value concepts will last long enough to pay back the additional investments. The current model may hold for pig farmers in North-West Europe, but farmers in the South and East Europe find themselves at a different level of development in terms of entrepreneurship, professionalisation and efficiency. The relationships between networking behaviour, absorptive capacity and innovativeness are probably very different as they have other routines and perceptions about the sharing of information (study clubs where farmers learn from each other take place in the Netherlands but much less in countries like Poland or Spain)19_{. Further research is needed to find out how networking, learning and innovativeness} are related in these different contexts.

18 _{Furthermore, 68% use the network intensively for information about veterinary issues, 55% to gather information}

about rules and regulations, 38% for (information about) animal welfare, 35% for collaboration purposes and 29% for marketing ends.

19 _{In addition, production in these and many other countries often takes places in vertical integrations, where}

5.1 Introduction

As explained in the introduction, networking and knowledge acquisition for the purpose of innovation in the company is one of the possibilities for deploying the external integrative capabilities of the firm. Another possibility for innovation and knowledge acquisition through external orientation is engagement in co-innovation partnerships. While inter-firm/ organisational collaboration has advantages for innovation, it comes with organisational challenges which create the need for governance mechanisms to manage these challenges. In order to explore how the changing conditions and challenges during co-innovation processes can be managed, the study in Chapter 5 focuses on the interplay between structural and relational governance. The research question which is explored in this chapter is:

RQ4: How can the interplay between structural and relational governance mechanisms tackle the organisational challenges entailed in innovation uncertainty and network heterogeneity in co-innovation partnerships?