TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites

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TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
TE AU RANGAHAU
Māori Business Research

  TE HONONGA: MODELLING INDIGENOUS
      COLLABORATIVE ENTERPRISE
      A research report on Māori enterprise
     collaboration in Aotearoa New Zealand

        Massey University | massey.ac.nz | TAR@massey.ac.nz
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
Published by Te Au Rangahau Māori Business
Research Centre
Version 2 – 11 August 2021
ISBN: 978-0-473-58576-1
Text © Mika, J. P., Cordier, J., Roskruge, M., Tunui, B., O’Hare,
J., & Vunibola, S., (2021).
Published by: Te Au Rangahau Māori Business Research Centre
E-book Download:
https://massey.ac.nz/teaurangahau/

COVER IMAGE
© Creative Commons, 495039

The Lady on The Rock Statue is on Turuturu Rock, situated off
the coast of the Whakatāne Heads in the North Island of
Aotearoa New Zealand. It depicts the Great Migration story of the
12th century:

   The lady on the rock is Wairaka - daughter of Toroa, captain
   navigator of the Mataatua Waka. After completing their long
   voyage from Hawaiki, the home of Ngāti Awa, the women
   were left in the waka which began to drift back out to sea.

   This statue commemoriates Wairaka’s bravey in paddling the
   waka back ashore which broke a sacred tapu that women
   cannot handle a paddle.

   Wairaka’s cries as she paddled the Mataatua inshore became
   the placename for Whakatāne. "Kia Whakatāne au i ahau’ – I
   will act the part of a man."

   This Māori statue is symbolic of bravey in leadership, setting
   voyage on a navigatory frontier, transforming and pushing the
   boundaries of traditional ideology.

   Te Au Rangahau advocates for effective adoption of Maori
   leaderhip principles to create and advance Māori well-being
   economies.

                                                                    II
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
ACKNOWLEDGEMENTS

We acknowledge and thank Ngā Pae o te Māramatanga, New Zealand’s Centre
 of Māori Research Excellence for their support in funding this scoping study. In
  particular, we acknowledge the support of Ngā Pae directors Professor Linda
Nikora, Professor Jacinta Ruru, and more recently, Professor Tahu Kukutai, and
    the advice of Whai Rawa theme leaders Dr Shaun Awatere and Professor
 Chellie Spiller. We also gratefully acknowledge the contribution of Jessie Scott
   to the design of the final report. We thank Poutama Trust for their support in
  partnering with us on this research and facilitating relationships with the case
study organisations—Waiū Dairy and MiHI Group. We thank the Māori and non-
 Māori participants—entrepreneurs, business leaders, scientists and enterprise
    assistance providers—for contributing their knowledge, time and expertise.

 TO CITE THIS REPORT:
 Mika, J. P., Cordier, J., Roskruge, M., Tunui, B., O’Hare, J., & Vunibola, S., (2021).
 Te Hononga: modelling indigenous collaborative enterprise. A research report on Māori
 enterprise collaboration in Aotearoa New Zealand. Te Au Rangahau Māori Business
 Research Centre. https://massey.ac.nz/teaurangahau

 CONTACT:
 Dr. Jason Paul Mika
   j.p.mika@massey.ac.nz
   (06) 951 9361.

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TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
CONTENTS

01     HE KUPU ARATAKI   04   TIKANGA RANGAHAU

        INTRODUCTION             METHODOLOGY

20   NGĀ KŌRERO I PUTA   36   NGĀ WHAKAMĀRAMA

              FINDINGS               DISCUSSION

                                             IV
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
08     NGĀ PAKIHI MĀORI   11   NGĀ KŌRERO O ĒTAHI ATU

       MĀORI ENTERPRISE            LITERATURE REVIEW
     COLLABORATION CASE
                STUDIES

            HE KŌRERO
42      WHAKAMUTUNGA      44            NGĀ TOHUTORU

            CONCLUSION          REFERENCES & APPENDIX

                                                    V
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
HE KŌRERO WHĀITI
                            EXECUTIVE SUMMARY
This study explores the theory and practice       The theoretical and practical research has
of Māori enterprise collaboration. There          revealed elements that form Te Hononga as
exists a strong rationale for Māori enterprise    a conceptual framework of Māori enterprise
collaboration as it builds on the relationality   collaboration. This framework illustrates the
of a Māori world view, shared values and          constitutive and instrumental elements that
existing whakapapa (genealogical)                 have consequences in terms of Māori
relationships. Collaboration is considered        outcomes. Constitutive elements are factors
integral to Māori development because it is       or inputs that give form to Māori enterprise
set against a background of self-                 collaboration—structure, governance,
determination and self-governance. Waiū           rational relationships and a capacity to act.
Dairy and MiHI (Movers in Hemp Innovation)        Instrumental elements are the factors that
are two Māori enterprise collaborations that      make collaboration possible, functional and
have been facilitated by Poutama Trust and        effective—legal form, leadership, business
are at distinctly different stages of maturity.   models, shared decisions and dispute
Interviews were conducted with participants       resolution. Consequences are the effects, the
from Waiū Dairy and MiHI to gain insights         value and impact derived from Māori
from those involved in the practice of Māori      enterprise collaboration—holistic wellbeing,
enterprise collaboration.                         self-determination, land retention, value
                                                  sharing, equity and equality.
According to the literature, collaboration is
defined as people coming together for an          Te Hononga as a framework is not
agreed purpose and the processes used to          conclusive, rather it may serve as an initial
organise available means to achieve a             way of thinking about which inputs,
common goal. Collaboration in te ao Māori—        processes and outcomes can be added or
mahi ngātahi—describes the act and process        reduced as further research is conducted.
of working together. Participants describe        Additional research opportunities exist
collaboration as having an aligned purpose,       around knowledge management and the
values and goals, as well as the capabilities     challenges of knowledge transfer and in
to achieve a shared ideal. Participants           understanding what drives partners to
viewed Māori collaborations to be more            champion elements of the collaboration.
transformational and driven by collective
interests than the individualistic and            For now, Māori enterprise collaboration
transactional approaches they had                 remains a distinctly Indigenous form of firm-
encountered elsewhere. Participants found         level collaboration moulded on Māori values
that early articulation of the enterprise         and knowledge to meet aspirations for
collaboration purpose, values, processes and      collective well-being and self-determination in
success measures provided the transparency        business using all available means. The
upon which relationships of trust were built.     power of trusted, culturally-attuned
                                                  intermediaries like Poutama cannot be
The literature provides the following             understated, as well as Māori and non-Māori
motivations for collaboration: stability, risk    stakeholders (entrepreneurs, agencies and
mitigation, access to resources, transactional    firms) who embrace a Māori perspective and
efficiency, market legitimacy, competitive        approach, to effect success in Māori
advantage, access to power, and knowledge.        enterprise collaboration.
Participants collaborate to achieve
aspirations for collective well-being and to be
self-determining as Māori.
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TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
HE KUPU ARATAKI
                                   INTRODUCTION
The purpose of the study is to explore Māori    between whānau (family), hapū (subtribe),
enterprise collaboration as a strategy for      and iwi (tribe), aid Māori industry in achieving
Māori economic development using primarily      scale, and procure benefits that may not
qualitative methods as the basis for theory-    otherwise materialise. Nana (2011) identify
building to explain why, how and for whom       collaboration as an essential strategy for
such enterprise collaboration is occurring.     growth in the Māori economy, alongside
This report sets out the findings of Te         investments in science and managerial
hononga: Modelling Indigenous collaborative     capability. Similarly, Smith et al. (2015)
enterprise, a research project conducted by     identify collaboration as an essential element
Te Au Rangahau, Massey Business School’s        of self-determined economic development
Māori business research centre. The study       among iwi. As chair of the Māori Economic
was funded by Ngā Pae o Te Māramatanga          Taskforce’s tribal asset and collaboration
(NPM), New Zealand’s Māori Centre of            workstream, Solomon (2010) identified
Research Excellence between 1 March 2019        different models by which Māori might
and 29 February 2020 as a scoping study         collaborate to utilise tribal assets for
within Whai Rawa, that is, the Māori            infrastructure investments. Tribal
economies research theme. The end date for      collaboration centres on building trust and
this research was extended because of           relationships between iwi based on kaupapa
Covid-19.                                       Māori principles, aggregating capital, creating
                                                scale through multi-party agreements,
                                                diverting risk, sharing opportunities, and
Collaboration is an increasingly important      increasing business capability (Solomon,
strategy for Māori economic development         2010).
because of its potential to build on the
relationality of a Māori world view, existing
whakapapa (genealogical) relationships
                                                                                               -1-
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
In a study of Māori enterprise collaboration,     POUTAMA TRUST – 1988
Joseph et al. (2016b) found that active
management, good governance and a
framework for collaboration, incorporating a      Poutama Trust is a charitable trust
compelling rationale, backbone                    established in 1988 to promote Māori
infrastructure, and whakapapa-based               business development offering a combination
relationships provides conditions conducive       of business grants and advisory services
to collaboration, but no assurance that it will   funded from investment income (Mika, 2013).
happen. This research spotlights examples of      This research would not have been possible
successful enterprise collaboration among         without the support and leadership of
Māori, including Miraka, a Māori owned dairy      Poutama for whom Māori enterprise
factory in the central North Island; the Iwi      collaborations are a strategic priority (Mika,
Collective Partnership (ICP), iwi who trade       2012; Poutama Trust, 2014). The goal of
their annual catch entitlement as a group;        collaboration for Poutama is to support Māori
and Te Hiku Development Trust, whose              enterprises to achieve scale and
multi-tribal agreements with Crown agencies       sophistication (Poutama Trust, 2014). The
are effecting social change for iwi in Te         trust defines collaboration as “an association
Taitokerau (Mika et al., 2016). There have        in which two or more enterprises ‘cooperate
also been attempts at industry-wide               to compete’ (i.e., share resources,
collaboration among Māori, including Tūhono       knowledge and capacities) for commercial
Whenua, the Red Meat Coalition that sought        gain not possible by one firm acting alone”
to implement a ‘one farm’ strategy for Māori      (Poutama Trust, 2014, p. 14). Poutama
sheep and beef farms in the Bay of Plenty         positions itself as an independent broker of
(Bay of Connections, 2014), a strategy that       Māori enterprise collaborations, which can
was replicated in the Manawatū-Whanganui          take many forms, including horizontal and
(Horizons Regional Council, 2016).                vertical integration, joint ventures, supply
                                                  agreements, and informal cooperation. Thus,
While there is a strong rationale for Māori       Poutama performs the role of trusted
enterprise collaboration at various scales,       intermediary, facilitating discussions among
sectors and sites, there are two major            Māori enterprises and access to industry
deficiencies in current knowledge:                leadership, research, and resources.

(1) to what extent are Māori enterprises
    collaborating and how is this affecting       Between 2014-2017, Poutama supported
    performance?                                  several Māori enterprise collaborations,
(2) why and how are Māori enterprises             including the Indigenous New Zealand
    collaborating?                                Cuisine cluster; the Mīere Coalition (the
                                                  Māori honey group); Tūhono Whenua (Red
The first question is a matter of enumeration     Meat Coalition); and Mīraka (Māori dairy
requiring official and industry data to address   farming coalition). Two recent enterprise
a lack of data on Māori enterprise                collaborations Poutama facilitated are the
collaboration in the Māori economy. This          Kawerau Dairy Group (now trading as Waiū
research addresses the second question,           Dairy) and MiHI (short for ‘Movers in Hemp
which poses a theoretical and practical           Innovation’), a collective of Māori and non-
challenge.                                        Māori enterprises who want to engage in the
                                                  market for hemp products. We focus on
                                                  these two cases—Waiū Dairy and MiHI—in
                                                  this research because they represent
                                                  different forms of enterprise collaboration,
                                                  one a large-scale start-up (Waiū Dairy) and
                                                  the other a smaller scale collaboration that
                                                  followed the Waiū experience.

                                                                                                 -2-
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
With Ngā Pae o te Māramatanga support,          The first sub question concerns the rationale
this research seeks to uncover insights about   for enterprise collaboration. The second
the enablers and impediments of Māori           concerns the processes and capabilities for
enterprise collaboration.                       collaborating as enterprises. The third
                                                question concerns the structure of enterprise
The primary research question is:               collaboration, formal and informal, from a
                                                Māori perspective. Underpinning goals of this
What is the theory and practice of Māori        research are the flourishing of Māori people,
enterprise collaboration?                       economies, and environments, enhanced te
                                                reo Māori (Māori language) and tikanga
Three sub-questions on the purpose,             Māori (Māori culture), and support for Māori
pathway and formation of Māori collaborative    researchers.
enterprise were formed:

(1) What are the bases for Māori enterprise
    collaboration?
(2) How do Māori activate Indigenous
    entrepreneurial capabilities for
    collaboration? And
(3) What forms do Māori enterprise
    collaborations take?

                                                                                           -3-
TE AU RANGAHAU Māori Business Research - TE HONONGA: MODELLING INDIGENOUS COLLABORATIVE ENTERPRISE - Massey Sites
TIKANGA RANGAHAU
                                 METHODOLOGY

          INDIGENOUS RESEARCH METHODOLOGIES

This research employed Indigenous               RATIONALITY IN THE RESEARCH
methodologies. Indigenous methodologies
are grounded in the ontology of relationality
(all things are interrelated—human and          The research is applied because it seeks to
nonhuman) and in the epistemology of            help solve the challenge of how Māori
relationality (the accumulated wisdom of        enterprises collaborate and is also
elders) (Wilson, 2008). The quality of          participatory because it seeks to empower
research in this view is defined by             Māori to lead and control the research
accountability to one’s relations—family,       process. Our purpose in this research is to
community, and environment (Wilson,             provide insights and evidence into why and
2008). Indigenous methodologies are             how Māori enterprises collaborate and what
contingent upon a decolonising agenda,          can enable this activity to be extended in the
which occurs when Indigenous people lead        future by Māori enterprises themselves and
Indigenous research, define research            with the support of intermediaries like
outcomes, choose when and how they              Poutama Trust. To do this from an
engage, how data is collected and utilised,     Indigenous perspective and in a kaupapa
and how indigeneity governs research            Māori way required us to establish a
processes (Smith, 1999).                        relationship with the Māori enterprises and
                                                stakeholders associated with the case study

                                                                                                 -4-
organisations and to be guided by their          and whawhitiwhititi kōrero (discussion); and
expectations and preferences for the             wānanga—deliberations among our research
research. This relationship-building process     team, with our research partners and with the
commenced through an existing research           research community. This approach to the
partnership between Te Au Rangahau and           research was assessed by Massey
Poutama Trust, members of the research           University’s Human Ethics Committee:
team attending hui of the MiHI Group in          Northern and approved (application number
Hastings and in Paeroa, and coopting Brian       NOR 19/24) as consistent with the
Tunui onto the research team who is a            university’s ethics code (Massey University,
doctoral candidate at Victoria University of     2017). Participants were provided with an
Wellington and a trustee of Poutama Trust.       information sheet and consent form (see
The research team continued to maintain          Annex 1).
contact with Poutama Trust and the case
study organisations through the course of
this research.                                   CASE STUDY METHODS

This is a nonstandard image of research.
Kaupapa Māori theory has opened up the           A case study method was chosen for this
academy to a more expansive view of what         research because of the focus on elements
research is by articulating an ethical           of enterprise at two different sites (a
framework for research that is critical and      formalised collaboration—Waiū Dairy and an
action oriented, the success of which is the     informal collaboration—MiHI Group), two
degree to which research supports                different sectors (dairy and hemp) and two
transformative Māori self-development            different scales (Waiū—$30 million
(Smith et al., 2012). Kaupapa Māori research     capitalisation at startup and MiHI Group—
legitimises Māori language, knowledge, and       nominal cash contributions by members and
culture, and rests on a reassertion of Māori     in-kind and grant funding by government at
cultural framing, political engagement, and      startup. The common denominator between
theory-building from a Māori perspective         the two cases is the intermediary, Poutama
(Pihama et al., 2002; Smith et al., 2012).       Trust, which had been instrumental in the
Non-Māori may participate in this approach       formation of both enterprise collaborations.
to research, but it comes with expectations to   The case study method involves close
understand one’s position and to engage with     examination of an individual or an entity or
respect, integrity, reciprocity, and humility    groups of either over a defined period to
(Smith et al., 2012).                            understand the nature of phenomena and
                                                 build theory (Eisenhardt, 1989). While
                                                 insights may be confined to a particular case,
TIKANGA AS ETHICAL RESEARCH                      extrapolating theoretical perspectives to a
PRACTICE                                         wider group is often sought after (Seawright
                                                 & Gerring, 2008).

The legitimacy, validity and capability of       In this research, strict attention on causalities
tikanga Māori, te reo Māori and mātauranga       between collaboration and enterprise
Māori were accepted, supported and               performance are premature because little is
enlivened by enacting principles of kanohi       known about collaboration in Māori
kitea—engaging with Māori enterprises as         enterprise. Instead, the scope is intentionally
Māori at hui (meetings); whanaungatanga—         broad, capturing diverse perspectives of
participating in mahi rangahau (the research)    those involved on the impetus, process,
and mahi ngāhau (the enjoyment) of hui;          outcome, context and feedback loops of
kawa—contributing to whakatau (welcome),         Māori enterprise collaboration in two related
karakia (prayer)                                 but different cases.

                                                                                                     -5-
The case study method in this research             POSITIONALITY
involved interviews with 19 people associated
with one or the other or both cases as a Māori
entrepreneur, enterprise assistance provider,      Positionality involves explicating one’s
or other stakeholder. We carefully read the        identity as a researcher to clarify variations in
transcripts using a collective approach to         power, perception, and privilege, providing a
thematic analysis, an approach which Henry et      basis for a relationship of trust, integrity, and
al. (2020) characterise as mahi ngātahi            openness between the researcher and the
(working collaboratively).                         researched (Moffat, 2016). Jones and
                                                   Jenkins (2014) suggest collaboration
This involved three team members reviewing         between Indigenous and non-Indigenous
the transcripts, identifying findings and          researchers can bring diverse positionalities,
themes, and comparing findings through             but caution researchers to focus on learning
wānanga (deliberation) among the                   from rather than about Indigenous peoples.
researchers. We reviewed organisational            Smith et al. (2012) suggests that positionality
literature to compile two case study narratives.   requires researchers to demonstrate how
                                                   their work “lends legitimacy” to kaupapa
Using the research questions, we analysed          Māori research. A summary of the
the findings to identify theoretical insights on   positionality of the researchers follows:
the formation, operation and growth of Māori
enterprise collaboration. Of particular
importance, is how knowledge within the
collaboration was introduced, generated,
protected, and shared, and the extent to which
the process of knowledge management was
consistent with mātauranga theory and
practice (Mead, 2012).

BENEFITS FOR PARTICIPANTS

An important consideration of kaupapa Māori
research is to ensure research is not only
insightful (informs the mind) but is also
agentive (informs practice and outcomes). We
do this in several ways. First, by sharing
findings with stakeholders—Māori enterprises,
intermediaries, government, and industry,
identifying contributions to enterprise and
industry development, public policy, and
enterprise assistance. Second, by working
alongside intermediaries like Poutama Trust to
design and deliver enterprise assistance that
is effective and appropriate for Māori
enterprises. Third, by delivering research-led
education that responds to Māori aspirations.

                                                                                                       -6-
Dr. Jason Mika PhD, MPP
Massey University
Dr Jason Paul Mika is Tūhoe, Ngāti Awa, Whakatōhea and Ngāti Kahungnu.
Dr Mika’s research centres on Indigenous entrepreneurship as means for
self-determined Indigenous economic development. Dr Mika is co-Director
of Te Au Rangahau, Massey Business School’s centre of Māori business
research.

A. Prof. Matt Roskruge PhD, B.SocSci (Hons)
Massey University
Dr Roskruge (Te Ātiawa and Ngāti Tama) is an associate professor with the
School of Economics and Finance and co-Director of Te Au Rangahau at
Massey University. He has broad research interests across the applied
quantitative social sciences with a focus on the Māori economy and
economic issues.

Dr. Jason Cordier PhD, AFHEA
Massey University
Dr Jason Cordier lectures, researches, and consults in the areas of strategic
management and knowledge management. His research focuses on
strategic integration and the way organisational stakeholders understand
and coordinate strategically significant activities. Jason is of Scottish, Irish,
and French descent.

Brian Tunui Research Assistant & PhD Candidate
Victoria University of Wellington
Doctoral candidate Brian Tunui is Ngāti Awa, Te Arawa, Ngāti Mākino and
Samoan. His research focuses on the Māori economy and in particular Māori
investment and the elements that influence investment decision-making.

Jamie O’Hare Research Assistant & PhD Candidate
Massey University
Doctoral candidate Jamie O'Hare's research focuses on understanding the
role of geographic proximity in SME innovation activity in Aotearoa New
Zealand. Jamie is Scottish born tauiwi and has lived in Aotearoa New
Zealand since 2017.

Dr. Suliasi Vunibola PhD
University of Canterbury
Dr Suliasi Vunibola (Nubunilagi/Nawi/Qaraimasi/Vuniivilevu – Vitia) is a
lecturer at the University of Canterbury. Dr Suli's research focuses on
Indigenous entrepreneurship, Pacific Indigenous food security, Pacific
wellbeing, adaptability and resilience mechanisms and community
development in the Pacific.

                                                                                    -7-
NGĀ PAKIHI MĀORI
      MĀORI ENTERPRISE COLLABORATION CASE
                    STUDIES

Waiū Dairy                                    KDC’s vision was to build a successful
                                              Māori enterprise that embraced an
                                              economic development approach that
                                              included tikanga Māori. This represented
In August 2011, Miraka Limited (Miraka)       the inclusion of Māori cultural values,
commenced operations as the first Māori-      social considerations in terms of job
owned milk processing plant at Mokai,         creation for Māori, as well as operating the
near Taupō. Miraka is owned by nine           business in an environmentally sustainable
shareholders of which seven are Māori         manner. One of the key aspirations for
organisations. One of its cornerstone         KDC was to be the first multi-species milk
shareholders, Tuaropaki Kaitiaki Limited,     processing plant in Aotearoa New Zealand
supplies geothermal energy to power the       that was producing products such as
milk processing plant from its geothermal     conventional and organic milk protein
power plant situated nearby. Miraka was       concentrate (MPC) and whole milk powder,
the inspiration for a group of eastern Bay    from conventional cow, organic cow, as
of Plenty Māori enterprises known as the      well as sheep milk and goat milk. KDC also
Kawerau Dairy Collective (KDC) to build a     intends to develop a symbiotic relationship
milk processing plant in Kawerau. Like        with its milk suppliers many of whom will
Miraka, the plant draws its energy in large   be Māori farms but also non-Māori. The
part from a geothermal power plant owned      philosophy being that one cannot do
by local iwi, built on land owned by Māori,   without the other, therefore, both will need
with Māori dairy farms supplying milk to      to work closely together to achieve the
the factory.                                  plant’s vision.

                                                                                             -8-
The project was first mooted in 2012 by
                                                   Movers in Hemp Innovation (MiHI)
Richard Jones of Poutama Trust, Enid
Ratahi of Ngāti Awa, and Rob Tiopara from          Movers in hemp innovation (MiHI) was
Te Manawa o Tūhoe. Over the next five              formed by Poutama as a collective in July
years, feasibility studies, business plans and     2018 to investigate the potential for
financial analyses were undertaken to              collaborative investment in hemp production.
assess the project’s viability. During this time   The collective comprises twenty-three
membership changed, as several                     enterprises with the majority being Māori
organisations joined and left the group for        enterprises and a small number of non-Māori
different reasons. However, in 2017, a major       enterprises. These enterprises contributed
milestone was reached when members of              $10,000 each as an initial indication of their
the KDC group agreed to commit financially         commitment to investigating potential
to the venture. Eventually 11 Māori                business opportunities. Poutama Trust
enterprise would invest in the company.            adopted the role of facilitator for the
They now own 66% of the company, with the          collective as part of its mahi for facilitating
remaining 33% being taken up by Cedenco            Māori business development.
Limited. In early 2018, the company was
established and named Waiū which means
sustenance. A board of directors was               Initial reports commissioned by the collective
appointed, and the company assumed                 indicate that global retail hemp product sales
control of the project. Construction of the        totalled $3.7 billion in 2018 with 25,000
plant commenced in mid-2018 and it was             known uses for hemp as food, fibre, and
officially opened in May 2019 (Poutama             medicine. There is currently a worldwide de-
Trust, 2018). The plant is now up and              scheduling of hemp from the controlled drugs
running and producing product, employing           list which will enable hemp to become
30 staff. A butter plant was also added to the     available to a wider market. As a part of this
overall plant configuration, now producing         de-scheduling, the New Zealand government
both organic and conventional butter. It has       amended legislation in November 2018 to
taken some seven years for the project to          allow hemp seeds to be sold as food. There
bear fruit, but the process has been one of        are expected to be further announcements in
evolving tino rangatiratanga and has reached       late 2019/early 2020 regarding the regulation
a stage where the initial dream has been           of products that contain cannabidiol (CBD)
realised.                                          which is a substance that has therapeutic
                                                   value. The industry is poised for growth in
                                                   New Zealand and Māori see an opportunity
                                                   to enter the industry at an early stage in its
                                                   development.

                                                                                                     -9-
Many of the collective have limited
knowledge about how to grow, harvest,
process and market hemp, therefore, the
main purpose of this project is to address
these knowledge gaps for the members in
the collective in order to assess the feasibility
of hemp as a business opportunity. The
collective has developed relationships with
several crown research institutes (CRI’s) to
explore product development opportunities.
Relationships have also been developed with
other Indigenous peoples particularly in
North America where they have hemp
businesses operating already.

A recent report prepared for the collective by
Glenn Hawkins and Associates (GHA) in July
2019 indicates that growing hemp for food
has the lowest financial and economic return
compared to those where it is grown for fibre
or for hemp derived CBD. The collective is
currently assessing the short-term
opportunities for growing hemp to produce
food and personal care products which
derives a reasonable return. The longer-term
and highly profitable opportunities of
producing hemp derived CBD oil are
dependent upon firstly being an existing
producer, and secondly that changes are
made to the current regulations in Aotearoa.

The MiHI collective is still in its initial stages
and post the report prepared by GHA, a
small number of enterprises have decided to
leave the collective as the returns generated
from the current financial model do not
adequately compensate them for the
perceived risks involved. The collective
continues to work with CRI’s to explore
product development opportunities as well as
working with First Nations to explore
collaborative hemp business opportunities.

                                                     - 10 -
NGĀ KŌRERO O ĒTAHI ATU
                              LITERATURE REVIEW

What is collaboration?                             In a similar vein to Joseph et al. (2016a),
                                                   Smith et al. (2015) aims to understand the
The meaning of collaboration in                    critical success factors for Māori economic
organisational and entrepreneurial contexts        development. Collectivism and collaboration
varies (Castañer & Oliveira, 2020). Gazley         are identified as critical for Māori economic
(2016, p. 1), for instance, states that            development, as iwi consider these elements
“organisational collaboration describes            as a value creating processes that coalesce
dynamic relationships involving coordinated        knowledge and diversity from within whānau,
activity based on mutual goals.” Salvato et        hapū, and iwi (Smith et al., 2015). However,
al. (2017, p. 963) see collaboration as the        Smith et al. (2015) distinguish between
“act of working together by two or more            collaboration and relationships, stating that
persons to accomplish something.” For              “collaborations can be formal or informal, can
Lakshminarasimha (2018), collaboration             evolve as the need or expectation changes,
involves the sharing of information.               and tend to be project-specific, time-bound,
Kretschmer and Vanneste (2017)                     and guided by points of reference.
characterise collaboration as an absence of        Relationships, on the other hand, are often
‘free-riding.’ While semantic variation is         intergenerational, based on whakapapa
inevitable, collaboration generally evokes         connections, difficult to end, and best
notions of working together for a common           maintained through customary approaches”
goal (Castañer & Oliveira, 2020). In the           (p. 125). This distinction is important as
Māori language, mahi ngātahi broadly means         relationships are viewed as superior to
working together as one (Moorfield, 2020).         collaborations, and collaborations should not
By extension, its usage has become                 be imposed to the detriment of existing
synonymous with collaboration; albeit with         relationships (Smith et al., 2015).
the additional consideration of achieving a
common goal (Castañer & Oliveira, 2020;            Māori perspectives affirm the significance of
Durugbo, 2015; Salvato et al., 2017).              collaboration in the Māori economy (Joseph
                                                   et al., 2016a; Smith et al., 2015). Traditional
                                                   Māori economic philosophy also recognises
In a study of the preconditions of Māori           the role of collaborative effort (Firth, 1929).
enterprise performance, Joseph et al.              Counter to the Western economic ideal,
(2016a) argue that collaboration is integral to    traditional Māori economics was premised
Māori development because it is “set against       upon a cultural imperative of wealth
a background of self-determination and self-       distribution as opposed to wealth
governance” (p. 8), or more specifically, tino     accumulation (Hēnare, 2014). Relationships
rangatiratanga (Durie, 1995). Joseph et al.        between Māori ensured the integrity of the
(2016a) sets out to establish whether              economic system, guiding access to
collaboration leads to better economic             resources (Dell et al., 2018). Ensuring
performance of Māori enterprises as                resource flows “…focused iwi, hapū, and
opposed to operating in relative individuality     whānau attention and energies on nurturing
at a firm level. They found that, in the case of   relationships and genealogical alliances”
Ngāti Pikiao, collaboration provides a             (Dell et al., 2018, p. 53). Broadly speaking,
platform from which iwi (tribes) can enhance       these resource-driven relationships helped to
their economic performance (Joseph et al.,         maintain peace.
2016a).

                                                                                                     - 11 -
Principles of an Economy of Mana
When one considers the themes of the mana economy, outlined by (Hēnare, 2016) (see Table
1 below), it is evident that considerations for the wellbeing of kin point toward an enduring
significance of collaboration and relationships in Māori enterprise.

 Table 1: Principles of an economy of mana

  No.    Principles

  1      Derives from kaupapa and traditional Māori economics.

  2      Inspired by spiritual; ecological; kinship; and economic wellbeing.

  3      Informed by ecological considerations.

  4      Multidisciplinary approaches to research.

  5      Flexible system capable of reorganisation on the basis of future outcomes.

  6      Based on reciprocal exchange.
 Source: Adapted from Hēnare (2016)

 The role mahi ngātahi in Māori economic development, and wider Māori philosophy should not
 be understated. Hēnare (2014) and Dell et al. (2018) highlight how collaboration and
 relationships have underpinned Māori economic philosophy in the articulation of an economy
 of mana. With the role and value of collaboration in mind, we next consider the rationale for
 enterprise collaboration.

                                                                                                 - 12 -
WHY DO FIRMS COLLABORATE?
 THERE ARE SIX MAIN THEORETICAL PERSPECTIVES AS TO THE MOTIVES FOR
 COLLABORATION (WOOD & GRAY, 1991).

 1 Tahi                             2 Rua                       3 Toru
     Resource                           Microeconomic              Institutional
     Dependency                         Theory                     Theory
     Theory

4 Whā                               5 Rima                       6 Ono
                                                                     Knowledge
      Strategic                          Political
      Management                         Theory                      Based
      Theory                                                         View

      1 Tahi
Resource Dependency Theory                               2 Rua
First is resource dependency theory (RDT).
Under this approach, firms seek to achieve
stability and minimise risk without                     Microeconomic Theory
compromising their autonomy, while
simultaneously seeking to orient themselves
in such a way that they can engage with              Second, microeconomic theory focuses
other firms and access resources (Wood &             on how firms can become more efficient in
Gray, 1991). In this perspective, the firm is        their exchanges with other firms (Wood &
considered to be a unique collection of              Gray, 1991). Through this lens inter-firm
material and nonmaterial resources and               collaboration is driven by a desire to
capabilities (Buckley & Casson, 2007). A             achieve transactional efficiency
firm’s competitiveness, and ultimately its           (Williamson, 1991).
survival, is achieved via the establishment of
interfirm collaborations that allow access to
these unique resources (Pfeffer & Salancik,
2003; Salancik et al., 1978).

                                                                                          - 13 -
3 Toru                                            5 Rima
Institutional Theory                              Political Theory
Third, in institutional theory firms seek to be   Fifth, political theory is deployed in
legitimised by the environment in which they      explanations of international relations
operate (Selznick, 1949). The firm will mimic     (Strange, 1988a, 1988b) as well as
other firms it perceives to have obtained         organisational relations (Benson, 1975).
legitimacy so to achieve legitimacy itself        Fundamentally, it seeks to answer questions
(March & Olsen, 1989; Selznick, 1996;             on both access to power and resources.
Zucker, 1987). The firm may engage in             Interfirm collaboration can, therefore, be
interfirm collaborations in order to achieve      explained by a reach for power and
this sense of legitimacy. This may constitute     resource, which feeds back to resource
a component of resource dependency theory         dependency theory, which is concerned with
as it is important for the firm to resemble       resource access, and strategic management
their immediate business environment if they      theory, which is concerned with achieving a
are to ensure the flow of resources (Meyer &      competitive advantage as a manifestation of
Zucker, 1989).                                    corporate power.

                                                                          6 Ono
4 Whā                                                         Knowledge-based View
                                                  Sixth is the knowledge-based view (KBV),
                                                  which is considered an extension of the
Strategic Management Theory                       resource-based perspective of the firm
                                                  (Balogun & Jenkins, 2003; De Carolis, 2002),
                                                  that considers knowledge to be the most
                                                  strategic and unique resource the firm has at its
Fourth, is strategic management theory            disposal (Curado, 2006). Similar to resource-
where the focus is on how firms achieve           based perspectives, the KBV views firms as
competitive advantage (Porter, 1980).             heterogeneous collections of knowledge
Competitive advantage describes a situation       (Hoskisson et al., 1999). The heterogeneous
where a firm is propitious relative to its        nature of knowledge contained within the firm
competitors (Porter, 1980). A competitive         means that “… the one sure source of lasting
advantage can be achieved either cost             competitive advantage is knowledge” (Nonaka,
reduction or product differentiation (Porter,     2007, p. 96). Interfirm relationships via the KBV
1980). Cost reduction and product                 lens are characterised by congruence between
differentiation may be achieved via               firms that aim to capitalise on the unique
microeconomic theory and resource                 knowledge contained within each firm;
dependency theory respectively, rendering         subsequently facilitating the achievement of a
interfirm collaboration a means of achieving      competitive advantage. Meaning that the KBV
a competitive advantage.                          clearly links to both resource dependency
                                                  theory and strategic management theory.
                                                                                                 - 14 -
The resource-based view of the firm               The firm must specialise or develop something
contends that the performance of the firm is      rare if they are to attain a competitive
the result of firm heterogeneity rather than      advantage (Amit & Schoemaker, 1993). The
the structure of the industry (Barney, 1991;      firm may choose to do this via an interfirm
Rumelt, 1991; Wernerfelt, 1984). Through          collaboration (Teece, 1986). The firm’s
the accumulation of inimitable capabilities       willingness to make specific transactional
and resources, the firm achieves a                exchanges with other firms will determine
competitive advantage (Barney, 1991).             productivity gains’ (Dyer & Singh, 1998) in the
Recognition of the importance of internal firm    value chain (Perry, 1989). Interfirm exchanges
capabilities have aided in understanding how      can generate relationship-specific assets (Dyer
firms are able to generate abnormally high        & Singh, 1998), of which there are three main
returns (Dyer & Singh, 1998). However, by         types. First, site specificity, which refers to
focusing inwardly on the resources and            assets that are located proximately to exploit
capabilities of the firm there has been a         efficiencies in production, transport,
tendency to overlook the advantages and           processing, and inventory (Besanko, 2010).
disadvantages resulting from firms’ external      Establishing geographic proximity via site-
environments (Dyer & Singh, 1998). Critical       specific investments is shown to encourage
resources can extend beyond the periphery         cooperation, which bolsters interfirm
of an organisation, rooted in what they call      performance (Enright, 1995). Second, physical
interfirm resources and routines. Dyer and        asset specificity, which refers to “transaction
Singh (1998) identified four sources of           specific capital investments” such as
   .
interorganisational   competitive advantage:      specialised equipment and materials (Dyer &
relationship-specific assets; knowledge-          Singh, 1998, p. 662).
sharing routines; complementary resources
or capabilities; and effective governance.

As interfirm relationships develop, human         Third, human asset specificity, which refers to
capital specialisation is enhanced (Asanuma,      cases in which human capital (workers)
1989), and efficient communication between        acquire skills and expertise via transactions
parties improves (Dyer, 1996).                    between firms (Besanko, 2010).
Investments in relationship-specific assets
have a positive effect on interfirm               Organisations learn by collaborating, from
performance as they decrease opportunism          which interfirm knowledge sharing routines
by leveraging the gains from cooperation          emerge (Powell, 1990), with such interfirm
(Gurcaylilar-Yenidogan et al., 2013).             learning critical to firm competitiveness and
Encouraging firms to invest in relationship-      success (Dyer & Singh, 1998). von Hippel
specific assets can be challenging because it     (1988) finds that the majority of firm
involves a degree of trust and financial          innovations are the result of input from both
commitment. Investments in relationship-          buyers and suppliers in the value chain. This
specific assets become more likely when           suggests that knowledge transfer mechanisms
effective safeguards against opportunism are      are integral for innovation throughout the value
established (Williamson, 1985). The longer        chain. The idea of interfirm knowledge-sharing
these safeguards against opportunism are in       is encapsulated in the knowledge-based view
effect the greater the returns are on             of the firm. As an extension of the resource-
relationship-specific assets (Dyer & Singh,       based view of the firm (Balogun & Jenkins,
1998). Once relationship-specific assets          2003; De Carolis, 2002), knowledge-based
have been established the return on               view argues that firms are a heterogeneous
investment potential increases as                 collection of knowledge (Hoskisson et al.,
collaborating firms continue to interact (Dyer,   1999), and that knowledge is the most
1996).                                            strategic, unique resource firms have available
                                                  (Curado, 2006).                                - 15 -
Interfirm relationships via the knowledge-      However, Dyer and Singh (1998) argue that
based view are characterised by congruent       absorptive capacity is partner-specific—
firms that aim to capitalise on unique          meaning that a firm “has developed the ability
knowledge within each firm, inducing            to recognize and assimilate valuable
competitive advantage.                          knowledge from a particular alliance partner”
                                                [emphasis in original] (p. 665).
Understanding knowledge-sharing routines
is, therefore, imperative to competitive
advantage. Two main knowledge types draw        Partnership-specific absorptive capacity refers
attention to knowledge-sharing routines.        to the degree of overlapping bases of
First, codified knowledge—this is knowledge     knowledge between collaborating partners;
expressed in specific terminology expressed     and the degree to which collaborating partners
verbally or in print. This knowledge type is    have developed routines of interaction that
sometimes referred to as information            maximise “the frequency and intensity of
(Nonaka, 2007). Second, tacit knowledge—        sociotechnical interactions” (Dyer & Singh,
this type of knowledge is difficult to          1998, p. 665). The firm that receives
communicate and understand. It is typically     knowledge inflows will be able to recognise,
expressed nonverbally and in nonwritten         assimilate and apply the value of new
communication, instead conveyed through         knowledge on the basis of having “overlapping
observation, imitation and face-to-face         knowledge bases” with the firm from which the
interaction. It is sometimes referred to as     knowledge has been received (Mowery, 2001).
sticky knowledge (Nonaka, 2007; Szulanski,      Further, partner-specific absorptive capacity is
2003).                                          intensified by face-to-face interaction between
                                                individuals within collaborating firms (Dyer &
                                                Singh, 1998). This acts as a mechanism in the
Due to communication challenges, tacit or       transfer of tacit knowledge. The effectiveness
sticky knowledge cannot be easily               of knowledge exchange develops over time
exchanged between firms (Asheim & Gertler,      and frequency of interaction (Mowery, 2001).
2009). This renders tacit knowledge to be a     Therefore, partner-specific absorptive capacity
valuable knowledge-based resource for firms     can be augmented by face-to-face interaction
seeking a competitive advantage.                in which tacit knowledge can be exchanged
Conversely, codified knowledge is more          (Marsden, 1990), aiding the generation of
readily exchanged, but its accessibility also   “relational rents through knowledge sharing”
makes it less valuable (Maskell & Malmberg,     (Dyer & Singh, 1998, p. 666).
1999). The exchange of tacit knowledge
between firms is, therefore, key for            To realise the benefits of interfirm knowledge
competitive advantage.                          sharing firms must have alignment in their
                                                incentives to the extent that firms are
                                                compelled to be transparent (Dyer & Singh,
Absorptive capacity moderates the degree to     1998) and to ensure equity in the transfer of
which firms can exploit knowledge inflows       knowledge (Mowery, 2001). Equity-based
from their collaborators. A firm’s absorptive   arrangements have been demonstrated to be
capacity is determined by the amount of prior   an effective mechanism in the alignment of
knowledge already within the firm (Adler,       incentives, and promoting knowledge
1965), punctuated by investments in             exchange between collaboration partners
knowledge generation (Tseng et al., 2011).      (Mowery et al., 1996). “The greater the
Absorptive capacity is often thought of as a    alignment of incentives by alliance partners is
static capacity (Adler, 1965; Cohen &           to encourage transparency and reciprocity and
Levinthal, 1990).                               to discourage free riding, the greater the
                                                potential will be to generate relational rents
                                                through knowledge sharing” (Dyer & Singh,
                                                1998, p. 666).

                                                                                                 - 16 -
Firms may also combine their respective             Without the supporting determination of a
resource endowments in a complementary              third-party, self-enforcing agreements are
way in order to achieve a competitive               stablised via formal and informal safeguards
advantage (Hamel, 1991). The resources are          (Dyer & Singh, 1998). Formal safguards
known as complementary resource                     involve financial and investment hostages
endowments; which Dyer and Singh (1998, p.          (Klein, 1980). These are created with the
666) define as “…distinctive resources of           intention to limit opportunism by ensuring
alliance partners that collectively generate        shared financial incentives of the collaborating
greater rents than the sum of those obtained        firms (Dyer & Singh, 1998). The purpose of
from the individual endowments of each              aligning financial incentives is to create a
partner.” Complementary resources must be           scenario in which it is more financially
scarce, and not readily available for purchase      beneficial for the collaboration firms to
in another market (Oliver, 1997). The               cooperate rather than exploit opportunism.
congruence of complementary resources               Informal safeguards are typically rely on trust
should result in a synergy where the resource       and goodwill (Hill, 1995), these are less costly
endowments are rarer and more inimitable            and more flexible than the formal alignment of
than they are separately (Dyer & Singh, 1998).      financial incentives, but it does require the
Subsequently, firms that congregate their           establishment of interfirm trust, which can be
resource endowments establish themselves as         very challenging to initiate and develop
more competitive than firms that do not.            (Emmett & Crocker, 2006).

Congregating resources present various
challenges. Collaborating firms must firstly        How do firms collaborate?
locate one another, and subsequently
recognise the potential opportunity in
congregating complementary resources (Dyer          Collaborations may assume multiple
& Singh, 1998). However, recognising the            modalities based on the arrangement between
value in various combinations of resources is       firms. Camarinha-Matos and Afsarmanesh
difficult and requires the collaboration partners   (2018) argue, however, that various types of
to have perfect information of each other’s         formal collaboration fall into two broad
resource endowments. Creating value via the         categories. First, long term strategic
congregation of resources becomes more              networks—these collaborations are defined by
straightforward and worthwhile as firms             enduring relationships between firms where
accumulate experience in collaboration. But,        there are shared business activities, values,
establishing an initial collaboration of            and goals. Collaborative innovation networks
complementary resource endowments is                and industry clusters are often characterised
challenging (Shan et al., 1994).                    as long term strategic networks (Camarinha-
                                                    Matos & Afsarmanesh, 2018). And second, is
Effective governance is important for               the goal-oriented network, where collaboration
enterprise collaboration. Effective governance      is used to achieve a specific goal.
refers to formalised safeguards that protect        Collaboration through supply chains are often
against opportunism and collaboration               goal-oriented interactions (Camarinha-Matos &
breaches (Williamson, 1985). While effective        Afsarmanesh, 2018).
governance may assume several forms, there
are two main types (Dyer & Singh, 1998): (1)
third-party enforcement—a formal agreement,
such as a legal contract, enforcable by a party
not involved in the collaboration; and (2) self-
enforcing agreements—where no third-party
may determine if violation or opportunism has
occured.

                                                                                                       - 17 -
The nature of the collaborative relationship       Collaboration between iwi is recognised by
between firms is determined by the reasons         Māori as a means of enhancing sustainable
for the collaboration (Joseph et al., 2016a) and   economic development (Smith et al., 2015).
how the collaborating firms interact (Wood &       Collaboration is not confined to iwi or Māori
Gray, 1991) where firms conduct the same, or       groups, and includes groups identified as
similar, business activity then the relationship   essential to Māori success. However, the
should be mutually beneficial while avoiding       preservation of tino rangatiratanga (self-
mutual harm (Joseph et al., 2016a).                determination) is essential when engaging with
Conversely, when firms perform different           non-Māori groups (Smith et al., 2017).
business activity, but mutually benefit from
mahi ngātahi, such relationships are
characterised as symbiotic (Astley & Fombrun,
1983).                                             What enables collaboration?

In Indigenous enterprise collaboration,            Communication in enterprise collaboration is
Hoffmann et al. (2012) highlight several           imperative to value creation and success
modalities in a study of the Dhimurru              (Dyer & Singh, 1998). People tend to
Aboriginal Corporation, in Australia. Dhimurru     communicate with others who are similar to
have engaged in a long term collaboration with     themselves (McPherson et al., 2001).
the Conservation Commission of the Northern        Homophily, or similarity, on matters such as
Territory (CCNT) in the management of              culture, systems of belief, educational
Nhulunbuy environment. Initially, CCNT             attainment, social status, and financial status
provided rangers to assist in crocodile and        determine the extent that individuals can
visitor management. Rangers also trained the       engage in effective communication (Lazarsfeld
Indigenous landowners in visitor impact            & Merton, 1954). Similarity between
management. A more formal joint                    communicative partners enables higher levels
management system between Dhimurru and             of trust, improved perceptions of relationship
the former CCNT was proposed, but the              quality, intensified levels of communication,
Dhimurru considered this unacceptable,             and commitment to relationships (Ahlf et al.,
concluding that Indigenous landowners should       2019). However, while individuals that are
maintain the sole right to land management         highly similar may be able to communicate
decisions. The Dhimurru has also engaged in        effectively, their similarity means that they
short term collaborations in the eradication of    have little new knowledge or information to
the African Big Headed Ant and the Yellow          communicate (Rogers, 2003). The
Crazy Ant. Both species of ant are considered      communication of valuable knowledge or
a threat to conservation. Dhimurru                 information, therefore, requires a degree of
collaborated with ant experts from the             heterogeneity between communicative
Commonwealth Scientific and Industrial             partners (Rogers, 1962). Heterogeneous
Research Organisation to successfully              individuals can be characterised by the weak
eradicate and manage the ant populations           ties they have with one another (Granovetter,
(Hoffmann, 2011).                                  1973). These weak ties manifest as a lack of
                                                   shared knowledge, experiences, or
These examples of collaboration, while             perspectives.
assuming different modalities (long term and
goal-oriented), reflect collaboration based on
knowledge seeking. Dhimmuru, in these
examples, are seeking knowledge from their
partners, and do not wish to concede control in
the process. However, these are examples of
Indigenous and non-Indigenous collaboration
and may not be an accurate depiction of
Indigenous to Indigenous collaboration.
                                                                                                 - 18 -
Optimum communication is not achieved by             This means that while geographical proximity
pairings of homophilous individuals, but rather,     may facilitate the transfer of tacit knowledge,
by pairings of individuals that are similar in all   engaging firms require a degree of
aspects other than the knowledge or                  convergence in their business activity and
information they can exchange (Rogers,               organisational cultures. It is not well-understood
2003). This dynamic was observed in Ryan             in exiting literature which of these perspectives
and Gross (1943) whose study found that              is the most significant in the exchange of tacit
information on an agricultural innovation            knowledge, and subsequently, which facilitates
(hybrid corn seeds) was effectively                  a greater level of innovation.
disseminated by networks of farmers who
were similar in several aspects, and were            The development and maintenance of trust is
principally distinguishable on the basis of their    central to the function of any collaborative
knowledge of the corn seed technology. It is         endeavour, as there can be no relationship
not entirely clear how to navigate the factors of    without trust (Emmett & Crocker, 2006). For
homophily-heterogeneity, but it can be               individuals, the decision to trust strangers is a
assumed that shared language and culture are         complicated biological and cultural process
fundamental for effective communication. This        (Fichman, 2003). Trust can be defined as “the
does mean, however, that certain exchanges           intention to accept vulnerability based upon
of knowledge or information may be bound to          positive expectations of the interaction or
the geographic parameters of the language or         behavior of another” (Rousseau et al., 1998, p.
culture (Feldman, 1993).                             395). Trust is linked to scenarios in which there
                                                     is a perceived uncertainty and risk of
Through the exchange of tacit knowledge              dependency (Kramer, 1999). Trust is central to
collaborating firms are able to create value         the success of collaborative relationships, but it
(Dyer & Singh, 1998). The debate surrounding         is complex (Jarratt & Ceric, 2015; Moorman et
effective tacit knowledge exchange can be            al., 1993).
organised into two schools of thought. First,
the learning regions thesis argues that as tacit     Trust, however, is not a static enabler of
knowledge cannot be expressed through                collaboration. The literature on trust in
established language (Polanyi, 1966), and can        collaboration suggests that trust is a process
only be exchanged via physical interactions          that gradually moves towards ‘intimacy’
(Asheim & Gertler, 2009). This means that            (Grayson et al., 2008; Khodyakov, 2007), as
tacit knowledge cannot easily traverse               organisational goals and values align (Jap &
geographical locations (Asheim & Gertler,            Anderson, 2007). Weber et al. (2004, p. 78)
2009). Geographic proximity is a significant         state that as “positive attributions regarding
factor as it tends to facilitate cultural and        each other’s trustworthiness accumulate, trust
linguistic commonalities (Maskell & Malmberg,        can develop more rapidly via mutual
1999); specialisation (De Propris & Driffield,       reciprocity.” Remidez et al. (2010) argues that
2006), and informal contractual arrangements         trust is a learning process that is enhanced
(Dahl & Pedersen, 2004). As a result,                through “visible cultural interactions…mediated
collaborating firms that hope to capitalise on       by language and symbols” (p. 13). Initiation of
tacit knowledge exchange may have to be              the trust development process is characterised
geographically proximate.                            by a willingness of a potential collaboration
                                                     partner to engage and ‘take action that involves
Second, communities of practise argues that          reliance on another (Jarratt & Ceric, 2015). It
organisational and relational proximity              requires that a collaborative partner takes an
between firms is more important than                 irrational step to trust the other. The ability to do
geography in the exchange of tacit knowledge         this depends on the character of the individuals
(Brown & Duguid, 1991; Wenger, 1998).                in the firm: “Some people trust straight away
Relationships between firms transcend                with no real basis. Some people will need to
geographical parameters, facilitating the            see repeated behaviour before they will trust.
transportation of tacit knowledge between            Some will need consistency in behaviour for
geographically distant firms (Allen, 2000).          months or years. Some will never trust”
                                                     (Emmett & Crocker, 2006, p. 144).                   - 19 -
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