Do Small and Medium‐Sized IT Firms Form Service Partnerships with Nonlocal IT Firms? An Assessment of Facilitators

For small and medium‐sized information technology firms (IT SMEs), the service partnerships formed with other IT firms are strategic instruments to overcome their resource constraints, increase efficiency, and offer complementary services to their customers. Although these firms have a tendency to form local partnerships due to ease of trust building, few of them are engaged in nonlocal partnerships. This research aims to explore the facilitators of this divergent firm behavior. The findings suggest that a firm's alliance capabilities and organizational proximities between distant partners can substitute the lack of geographical proximity and enable IT SMEs' engagement in nonlocal service partnerships. More importantly, the type of IT service rendered through the partnership acts as a moderator and determines the extent of the organizational capabilities and proximities.     

Sales and Service Strategy for the Single European Market

Having the right products alone will not be enough to ensure success in the Single Market. Winning new business will demand the capability to treat customers across a wide swathe of Europe as if they were just down the street. Former national firms need to reach out beyond their borders with sales and service strategies capable of combining pan-European efficiency with adjustment to local needs. This requires new types of partnerships with established channels as well as increased investment in local sales, distribution and service subsidiaries. The rewards are both additional sales today and faster corporate learning about new markets which will bolster advantage tomorrow. Looking at established networks, it is clear that some companies are already well ahead in the race to establish cross-border sales and service support. On average German firms also tend to be ahead of their British, French and Italian cousins. As Europe becomes the strategic market for more and more businesses there is no time to lose in closing this gap.     

Trusting and Monitoring Business Partners throughout the Relationship Life Cycle

Purpose: The goal of this research is to understand the theoretical and empirical confluence of multi-dimensional trust with the role of monitoring as business partnerships unfold and evolve dynamically throughout the course of the relationship life cycle.

Methodology: A pilot study is run in which in-depth interviews are conducted with managers to glean their insights regarding the theoretical questions and to verify terminology for survey items. A large-scale survey study is then conducted to test hypotheses about the relationships among the focal constructs. The participants in both studies are real procurement professionals reporting on their primary supplier relationships. The qualitative study and the samples of real world managers enhance the external validity of this research.

Findings: In early stages of business relationships, monitoring and benevolence trust interact to positively impact business performance. Continued monitoring in later stages interact with benevolence trust to performance detriment. Conversely, monitoring and competence aspects of trust hurt business performance in earlier life stages.

Research Implications: Theoretical frameworks that include the constructs of multidimensional trust, monitoring, and relationship life cycle stages can build on the nuanced 3-dimensional contingencies established in this research. In particular, this research furthers the concepts of monitoring and the relationship life cycle.

Practical Implications: There is a time and a place to trust one's business partners, and a time and a place to verify their trustworthiness. As business partnerships are forged, monitoring and benevolence trust can be particularly fruitful.

Contribution: In this research, the authors build on the business marketing literature that has begun to delineate the benevolence and competence dimensions of trust in business relationships; they demonstrate the role that partner monitoring has in maintaining business commitments; and establish how these effects are modified over the stages of the relationship life cycle; i.e., from exploration, to build-up, maturity, and decline.     

Taking environmental partnerships seriously

Increasingly, firms are integrating environmental sustainability into their business strategies. Yet, sustainability is a complex topic and many firms need to form environmental partnerships to access additional resources—in the form of investments, technologies, expertise, public image, and/or political influence—to develop competitive advantage. Environmental partnership decisions are difficult, however, because they often need to reconcile multifaceted sustainability issues with multi-level, and potentially divergent, strategic goals. To meet their intended objectives, companies should carefully consider the type of environmental partnerships and partners that can best meet their needs. Based on a review of the literature, interviews with executives responsible for environmental partnerships, and publicly available data, we find firms engage in three main types of environmental partnerships: innovation-seeking, legitimacy-building, and policy-influencing. Each type of partnership benefits from different types of resources and partner choices. Herein, we describe the advantages of each type of environmental partnership and partners that may best support them. Given that many firms develop environmental partnership portfolios, managing multiple environmental partnerships simultaneously, we also discuss the implications of our research for environmental partnership portfolios.     

A resource-based view of partnership strategies in health care organizations

The distribution of management structures in health care has been shifting from independent ownership to interorganizational relationships with other firms. A shortage of resources has been cited as one cause for such collaboration among health care entities. The resource- based view of the firm suggests that organizations differentiate between strategic alliances and acquisition strategies based on a firm's internal resources and the types of resources a potential partner organization possesses. This paper provides a review of the literature using the resource-based theory of the firm to understand what conditions foster different types of health care partnerships. A model of partnership alliances using the resource-based view is presented, strategic linkages are presented, managerial implications are outlined, and directions for future research are given.     

The Effects of Learning on Relationship Value in a Business Network Context

ABSTRACT

In today's intense global competition, a firm's ability to learn from its networks of business relationships is an important source of sustainable competitive advantage. Learning in a network of relationships involves a constellation of resource linkages among business partners tied together by interconnected resources. This has the potential of increasing the relationship value of a firm in terms of knowledge created through interactions among firms in the business network. Prior research has not yet examined the effects of learning in and through relationships in a business network context. Interdependence of firms in business networks gives rise to learning effects of adaptation and coordination that can have implications for relationship value. An empirical study of 215 business relationships from a network of nine high-technology companies in the United Kingdom shows that learning in and through relationships as a result of interactions and resource interdependencies in networks of relationships has a positive effect on a firm's relationship value. Furthermore, an understanding of the network context through interactions among firms facilitates learning and development of the firm's learning capabilities that enhance relationship value.     

How different types of partners influence innovative product sales: Does technological capacity matter?

Extant empirical studies examine the effect of different types of partners on innovative product sales. Although these studies present ambiguous results, little research pays attention to the factors leading to this ambiguity. Therefore, this study investigates how technological capacity affects the relationships between different types of partners and innovative product sales. Based on a sample of manufacturing firms from the technological innovation survey, this study reveals several interesting results. First, for the sales from significantly improved products, technological capacity positively impacts on the links between the sales and collaborations with suppliers and also with customers, but negatively moderates with competitors and with research organization. Second, however, on the sales of marginally changed products, technological capacity negatively affects the collaboration with suppliers, but positively impacts on alliance with research organizations. These results increase understanding of the relationships between different types of partners and innovative product sales.     

Entrepreneurial networks: A Triple Helix approach for brokering human and social capital

Through utilising currently available Internet technologies, academic and governmental organisations can provide seedling companies in their incubators with additional competitive advantage through efficient access to markets, partners, knowledge and services both locally and globally. This paper proposes a Triple Helix approach for brokering social and human capital based on the skills brokerage business model. The skills brokerage business model is primarily suited for individuals and firms operating in localised settings. However, by using information and communication technologies, it is also possible to apply the model internationally for firms that need strategic partnerships in countries or regions other than their own. Coupled with the Triple Helix of university–government–industry interactions, it can propel innovation and the commercialisation of it beyond traditional boundaries of geography, such as the region and nation state. The paper also presents an Internet-based service that could be used to facilitate the brokerage process among the firms and people with relevant expertise and resources, and it discusses the implications this would have for a number of stakeholders, such as entrepreneurs, established businesses, service providers and business support organisations. This is still an emerging area and several themes for future research will be highlighted.     

Together and Apart: Exploring Structure of the Corporate–NPO Relationship

Financially significant relationships between corporations and non-profit organizations (NPOs) have increased in recent years. NPOs offer access to interests and ideologies that are lacking within most for-profit organizations. These partnerships form a unique bridge between for-profit and non-profit goals and offer significant potential to produce innovative ways of “doing business by doing good.” Exploration of the structural implications of these relationships, however, has been limited. The potential for ideological imbalance in these relationships, particularly for the NPO, has been poorly described. We explore the structure of Corporate–NPO relationships from the NPO's perspective under high pressure conditions such as large relational investments or negative pressure from stakeholders. Using data collected from 20 NPOs in Australia, we identified the use by NPOs of both formal and informal governance mechanisms within their partnerships. These mechanisms acted to align and defend important goals of the NPO. They allowed the NPO and their corporate partners to be simultaneously “together and apart.” Our study offers important insight toward the study of cross-sector relationships and the role of governance mechanisms.     

International exposure through network relationships: Implications for new venture internationalization

Drawing on the network literature and attention-based view, we examine the extent to which international exposure from key informal (geographically proximate firms) and formal (alliance partners) network relationships impacts new venture internationalization. Our findings are three-fold. First, international exposure from both types of network relationships positively influence new venture internationalization, and serve as substitutes for each other. Second, the effects differ based on the age of the venture. While older ventures benefit more from international exposure from alliance partners, younger ventures are more influenced by international exposure from geographically proximate firms. Third, our analysis confirms a three-way interactive effect of age and international exposure from informal and formal relationships on new venture internationalization.     

A bricolage perspective on service innovation

Service innovation is often viewed as a process of accessing the necessary resources, (re)combining them, and converting them into new services. The current knowledge on success factors for service innovation, such as formalized new service development (NSD) processes, predominantly comes from studying large firms with a relatively stable resource base. However, this neglect situations in which organizations face severe resource constraints. This paper argues that under such constraints, a formalized new service development process could be counter-productive and a bricolage perspective might better explain service innovation in resource-constrained environments. In this conceptual paper, we propose that four critical bricolage capabilities (addressing resource scarcity actively, making do with what is available, improvising when recombining resources, and networking with external partners) influence service innovation outcomes. Empirical illustrations from five organizations substantiate our conceptual development. Our discussion leads to a framework and four testable propositions that can guide further service research.     

Alliances and the innovation performance of corporate and public research spin-off firms

We explore the innovation performance benefits of alliances for spin-off firms, in particular spin-offs either from other firms or from public research organizations. During the early years of the emerging combinatorial chemistry industry, the industry on which our empirical analysis focuses, spin-offs engaged in alliances with large and established partners, partners of similar type and size, and with public research organizations, often for different reasons. We seek to understand to what extent alliances of spin-offs with other firms (either large- or small- and medium-sized firms) affected their innovation performance and also how this performance may have been affected by their corporate or public research background. We find evidence that in general alliances of spin-offs with other firms, in particular alliances with large firms, increased their innovation performance. Corporate spin-offs that formed alliances with other firms outperformed public research spin-offs with such alliances. This suggests that, in terms of their innovation performance, corporate spin-offs that engaged in alliances with other firms seemed to have benefitted from their prior corporate background. Interestingly, it turns out that the negative impact of alliances on the innovation performance of public research spin-offs was largely affected by their alliances with small- and medium-sized firms.     

International gatekeepers: How to integrate domestic networks and international relations

This research evaluates how firms develop an intermediary role, connecting their international experience with knowledge provided by the domestic network. These firms act as international gatekeepers, providing valuable knowledge about distant markets to their partners in the domestic network. By adopting a network perspective, we mapped from whom the firms obtain knowledge or the kind of relationship that each firm establishes with other members of the network, disentangling how the gatekeeper can, in fact, integrate international and domestic networks. Empirical evidence indicates that gatekeepers develop a domestic network based on closed relationships with domestic partners that have central positions but are not a real threat for them.     

Supplier-purchaser relationships within a quasi-market: the case of British Rail and British Steel track products

Over the last decade there have been significant changes to the traditional purchaser-supplier relationship within industrial organizations. This has involved reforming old-style purchasing relationships, which relied on several alternative suppliers competing mainly on price, to the preferred single-sourcing relationships, with accompanying mutuality of benefits to the partners involved. This change has been highlighted by the success of Japanese manufacturing firms. However, the process of change is a difficult task for any organization to achieve. It is even more difficult in public-sector organizations, where profit-maximizing aims have not been central to organizational behaviour, and where past practice has been the basis for current operational decisions. However, government policy of privatization and the development of public sector ‘quasi-markets’ has resulted in a shift of emphasis and a consequent re-examination of operational practices in the light of market discipline. Public-sector organizations operate in markets constrained by political parameters, but privatization and the development of a commercial approach have led to many public-sector organizations' adopting the business style of private sector companies. This paper aims to recount some of the problems that British Rail (BR) experienced in this transition period and how it managed this change process, and to summarize some of the key considerations for developing and sustaining ‘partnerships’ between purchaser and supplier.     

A model of rapid knowledge development: The smaller born-global firm

Existing models of the internationalization process have not captured the important phenomenon of accelerated international growth of born-global firms, which led Johanson and Vahlne (2003) to revise their model. However, the revised network model falls short of explaining rapid internationalization of firms. While they indicate a “specific relationship development process” used by born-global managers, Johanson and Vahlne (2003) still suggest the existence of an incremental learning and “responsive” model, which is based on pre-existing relationships. We extend current theory in arguing that born-global managers can use both pre-existing and newly formed relationships, to quickly and proactively develop new knowledge for rapid commercialization of their products. Proactive, advanced relationship-building capability is based around locating partners with technological knowledge with a view to ensuring ease of sharing knowledge. We explore the development of trust and inter-firm partnerships in established and newly formed networks and how these lead to tacit knowledge, absorptive capacity and new knowledge generation. While Johanson and Vahlne (2003) emphasize “market specific experience and operation experience” we emphasize “technological experience”. The reason that knowledge sharing is able to proceed quickly is that the shared “technological knowledge” allows rapid transfer and development of new knowledge and the drive to commercialize a product before a competitor, promotes the “mutual need” (co-dependency) to act quickly, characteristic of technology-based industries, which face rapid change. As an outcome of the born-global manager's ability to locate new partners through existing networks, new international links may be quickly developed, with internationalization being an outcome, but not necessarily a driver of behaviour in smaller born-global supply chains.     

Networking and growth of young technology-intensive ventures in China

More often than not, new ventures lack established products, known technologies, longstanding customer relations, experienced managerial teams, sufficient capital, and strong reputations. Almost by definition, small, new firms lack the resources of many larger, established firms. The task of an infant firm, and a measure of its success, is to make a transition from being resource weak to being resource strong.How can resources that are critical for profitable growth be acquired for the resource weak new venture? Researchers have found that entrepreneurs can gain access to valuable resources and they can seek to achieve competitive advantage through “networking activities.” Forming and utilizing available relationships with external organizations can allow entrepreneurs to build credibility, gain advice, financing, and customer access, build a positive image and obtain resources at below-market prices, and obtain channel access, information, and innovations. Business relationships with other organizations allow an entrepreneur to achieve desired business results through “asset parsimony.”A favorable view toward networking for new ventures leaves a number of unanswered questions, however. Relevant research questions might include, who should the entrepreneur seek as a business partner? Are all inter-organizational relationships equal, or are some types more valuable to new ventures than other relationships? Do firms relying on high levels of networking activities actually outperform firms that less actively seek resources through external organizational relationships?The present study provides a specific understanding of the concept of networking for entrepreneurs. We propose that networking can be understood in terms of “range,” the number of external relationships to obtain resources, and of “intensity,” the frequency of contact of and amount of resource obtained from these relationships. This research project evaluates the range and intensity of networking among high-growth and low-growth entrepreneurial ventures.Extensive interviewing with managers of six young technology-oriented firms in the People's Republic of China (PRC) affirmed the importance of entrepreneurial networking. Managers in the three high-growth firms reported greater range and intensity of business networking than did managers of three low-growth firms, matched by industry and age. Moreover, the relationship between networking activities and growth transcended the stage of firm development.Where networking range and intensity are deemed important in the growth process, new venture success may call for entrepreneurs to reach out deliberately to external organizations to capture needed resources. To a certain extent, such networking activities run counter to important entrepreneurial motivations of independence and autonomy. The concept of networking, and the results of this study, imply that entrepreneurs need to combine the spirit of independence with the reality of resource dependence, and they need to balance personal autonomy with strategic business relationships.This study also contributes to the understanding of entrepreneurship in our increasingly global economy, particularly in the PRC. Business relationships between the United States and the PRC have been expanding rapidly in the last decade. Many foreign businesses seek license agreements, joint venture partners, equity participation, or channel relationships with young ventures in that country. Do the same rules of networking apply in the PRC as the literature suggests apply in the United States? New ventures in this study were found to engage in processes of networking activities consistent with those in the West. Although networking activities may have different cultural roots, firm success appeared influenced by the same principles of networking.     

Inter-firm learning and knowledge-sharing in multinational networks: An outsourced organization's perspective

This research provides insights into how learning and knowledge are exchanged multinationally between customer firms and their outsourced suppliers who provide non-core, yet essential, services. The paper seeks to understand: (1) how information is exchanged in these networks; (2) how cumulative knowledge adds value in these networks; and (3) how boundary-spanners assist in the dissemination of knowledge and learning within the network. Based on a pharmaceutical industry case, the results suggest that: (a) multinational firms operate more effectively and interact by sharing knowledge with outsourced firms which reflect the customers' structure and fit; (b) networked firms benefit from interactions through economies of scope, but knowledge is not necessarily shared equally among partners; (c) learning and knowledge-sharing interactions are tightly coupled at the product development stage; and (d) outsourced firms interact with external boundary-spanners as needed. The research provides insights for managers of multinational organizations and managers of firms from where essential services are outsourced.     

Bilateral Opportunism in Buyer–supplier Partnerships

ABSTRACT

Purpose

Literature analyzes interorganizational relationships mostly from a relational perspective by emphasizing partnerships’ positive aspects. Yet business reality is often less romantic and more opportunistic. Especially within the automotive industry opportunistic behaviors often cause extreme reactions in both partners, resulting in poisoned relationships. This study examines the effects of bilateral opportunism between buyers and suppliers on both partners’ relationship induced financial performance, using an automotive industrial setting of new product development (NPD) partnerships. Furthermore, we evaluate the “opportunistic fit” between both partners to assess whether partnerships are characterized by opportunistic parity or unilateral domination.     

Building trust—Evidence from Vietnamese entrepreneurs

In the context of underdeveloped market institutions, entrepreneurs in a transition economy are forced to rely on trust-based partnerships. In the absence of effective market institutions and sufficient elapsed time, these entrepreneurial firms find a great need to actively and intentionally develop trust with their partners. The current literature, however, has virtually overlooked the possibility of trust being intentionally developed in interfirm relationships. This study develops a model that links trust development strategies, trust, and interfirm collaboration, and reports an empirical test of that model in Vietnam. The results support the general thesis that trust can be intentionally developed to facilitate interfirm relationships.     

The significance of human capital and social capital: professional–client relationships in the Asia Pacific

Professionals working in professional service firms rely on their human capital and social capital to deliver value in their service provision and delivery to clients. However, research to-date is limited regarding investigations into the relationship between human capital and social capital at the level of professional–client relationships, particularly in the context of the Asia Pacific where changes in business environment, professional jurisdiction and ways of working have been commonplace for many firms operating in this region. In this study of Australian corporate law firms and client organizations, our results reveal significant evidence of relationships between social capital and human capital in the form of knowledge acquisition, where social capital facilitates professionals’ capacity to acquire knowledge from clients and increases the overall amount of knowledge acquired. More research on social capital and knowledge acquisition has the potential to advance our understanding of the influence of professional–client relationships on human capital development in the Asia Pacific.