To teach or to compete? A strategic dilemma of knowledge owners in international alliances

The strategic importance of learning and knowledge development in alliances has been widely recognized and discussed in literature, though focusing mainly from the view of the demand side and leaving the equally important ingredient of knowledge owners’ incentives-to-teach intact. This paper blends the perspectives of the transaction-costs economics (TCE) and the knowledge-based view (KBV) in a hypothesized governance model that illustrates how knowledge and location factors of international partners jointly impact alliance strategies. We first identify the relevant knowledge and location factors affecting incentives-to-teach in alliances, and then incorporated them into a framework explaining the choice of contractual or equity-based mode governing an alliance. Eight hypotheses are developed and then tested on a sample of 640 international alliances, with at least a partner from a focal emerging economy, Taiwan. Our research findings show that the contractual mode is usually aligned with higher incentives-to-teach of the knowledge owners, especially in knowledge-asymmetric and location-symmetric alliances. In a contrast, the equity-based mode, offering additional safeguarding mechanisms for the knowledge owner, is often selected in the alliances associated with a severe concern of competition, especially in knowledge-symmetric and location-asymmetric alliances.     

The role of information technology in strategic buyer–supplier relationships

Information technology (IT) has long been acknowledged as an integral part of inter-organizational business exchange. The extant research, however, tends to emphasize the focal company perspective and focuses on operational issues, perceiving IT and business relationships as separable. Through a qualitative dyadic case study, our study defines how IT is positioned with regard to various elements of a strategic buyer–supplier relationship and the respective actors' operational and managerial behaviors. The study defines the role of IT regarding the structural, action, and management layers of a relationship and shows how IT can be a strong element around which relationship management activities are implemented to improve the consistency and performance of the relationship. The study prepares the ground for further qualitative and quantitative research to enhance a holistic understanding on IT in relation to the structures and processes in inter-organizational contexts of business relationships and networks.     

Is more supply chain integration always beneficial to financial performance?

While most studies argue that supply chain integration (SCI) has positive effect on financial performance, some literature cautions that SCI may impair financial performance under certain conditions. Our research extends this research stream by considering the adverse effect of SCI. In this study, we examine how supplier integration, internal integration and customer integration contribute to or impede firms’ financial performance and investigate the complementary roles of top management support in this process combining the resource-based view and transaction cost economics. Our findings from a survey of 195 firms in China indicate both favorable and adverse effects of SCI by showing an inverted U-shaped relationship between SCI and financial performance. Thus, either too little or too much SCI can impair financial performance. In addition, top management support can be considered as a complementary asset to SCI. This finding suggests that firms should focus on the important roles of top management support so as to improve financial performance through SCI more effectively. This study opens up new research avenues for SCI and suggests directions for future research and practice by exploring under what conditions SCI can help to improve financial performance.     

How does trust affect alliance performance? The mediating role of resource sharing

Although the direct impact of trust on alliance performance is well documented, little is known about how trust affects alliance performance. Based on the resource-based view, this study develops a model that employs resource sharing as a critical mediating mechanism through which trust affects alliance performance. Using survey data from 205 Chinese firms that were engaged in alliances, we find broad support for the mediated effects of trust. Interestingly, we also find that goodwill trust matters more to tangible than to intangible resource sharing, whereas competence trust matters more to intangible than to tangible resource sharing. Overall, our research provides important implications for firms seeking to translate their trust into superior alliance performance.     

What determines the performance of strategic alliance managers? Two lens model studies

Given the increasingly frequent call—often from macro, strategy researchers—for more micro-level probes into the drivers of strategic alliance performance, this article has responded to such a call by leveraging the organizational behavior (OB) and human resource (HR) literature on competencies. Based on two studies drawing on the lens model (Brunswik, 1954), we take on an important but little explored question: “What determines the performance of strategic alliance managers?” In Study 1 (a laboratory study), double system policy capturing results show a positive relationship between alliance competencies and performance judgments. In Study 2 (a field study), we investigate the evaluative behavior of alliance supervisors. Hierarchical linear modeling (HLM) results suggest that some structural, functional, and social competencies are evaluated as more important than other competencies in determining alliance managers’ performance.     

Does R&D offshoring lead to SME growth? Different governance modes and the mediating role of innovation

Research summary : In this article, we address the role of R&D offshoring strategies in the sales growth of small‐ and medium‐sized enterprises (SMEs). We propose that different governance modes of R&D offshoring—insourcing versus outsourcing—may lead to growth, but that they differ in their effects. In turn, we argue that innovation mediates the relation between international R&D sourcing strategies and sales growth. Based on a large database of SME manufacturing enterprises in Spain, we find that offshore outsourcing positively affects sales growth both directly and indirectly, while offshore insourcing only affects sales growth indirectly via innovation results. The analysis reveals different contributions of each governance mode to sales growth and the mediating role of innovation in the relation between R&D offshoring and firm growth. Managerial summary : We analyze how different governance modes of international R&D sourcing—offshore insourcing and outsourcing—may contribute to growth in SMEs. Modes of offshore R&D outsourcing positively affect the growth of sales in two ways. One effect is direct, produced by improved efficiency, flexibility, enhanced resources, and access to new markets. And the other effect is indirect as offshore R&D outsourcing favors the achievement of innovations, and this in turn, positively affects firm growth. For their part, captive modes only exert an indirect effect. Offshore R&D insourcing contributes to the achievement of innovations, and thus, ultimately to firm growth in so far as these innovations enable SMEs to increase sales. Therefore, innovation results perform a mediating role in the relation between R&D offshoring and sales growth. Copyright © 2015 John Wiley & Sons, Ltd.     

How do the combinations of sales control systems influence sales performance? The mediating roles of distinct customer-oriented behaviors

By distinguishing customer-oriented behaviors into functional and relational ones, this study reveals how different combinations of sales control systems (namely activity control, outcome control, and capability control) affect a salesperson's distinct customer-oriented behaviors, which subsequently influence sales performance. By collecting data from business-to-business salespeople and their managers and using hierarchical linear modeling, we find that the outcome-capability control combination increases functional and relational customer-oriented behaviors. The outcome-activity control combination decreases functional customer-oriented behaviors. The activity-capability control combination increases functional customer-oriented behaviors but reduces relational customer-oriented behaviors. In addition, we find that both customer-oriented behaviors not only boost sales performance individually, but also complement each other to positively affect sales performance. These findings provide important theoretical and practical implications by demonstrating that combinations of control systems have a significant impact on a salesperson's functional and relational customer-oriented behaviors.     

Structural homophily or social asymmetry? The formation of alliances by poorly embedded firms

Recent research shows that preexisting network structure constrains the formation of new interorganizational alliances. Firms that are poorly embedded in a network structure are less likely than richly embedded firms to form alliances, because they lack informational and reputational benefits. This study examines the types of ties that poorly embedded firms can form to overcome the constraints that their structural positions impose, in turn helping to explain how firms' actions can transform existing network structures. We argue that poorly embedded firms are more likely to participate in ties characterized by social asymmetry than in ties characterized by structural homophily. We analyze the terms of trade that socially asymmetric partners negotiate for alliance governance and discuss how such alliances influence network dynamics. To test our arguments, we use longitudinal data on the alliance activities of 97 global chemical firms from 1979 to 1991. Copyright © 2009 John Wiley & Sons, Ltd.     

Expanding the sales professional's role: A strategic re-orientation?

Based in social exchange theory, this study empirically examines a model of salesperson participation in strategic communication activities. Results show that performance of sales professionals often stems from roles and activities that extend beyond the traditional selling function. Findings indicate that managers' orientation toward change, the firm's selling strategy, and salesperson's trust in their manager all play an important role in the salesperson's likelihood to engage in greater strategic communication activity. Participation in these activities is linked to individual selling performance. Thus, the study provides evidence that expanding the salesperson's role beyond the selling function can add firm value.     

The performance implications of power–trust relationship: The moderating role of commitment in the supplier–retailer relationship

The current research examines how coercive power and non-coercive power affect trust and how these relationships are affected by affective and calculative commitment. It also expands the understanding of the role of an under-researched dimension of performance, i.e., strategic performance, and studies it as a mediating variable in the relationship between trust and financial performance. The proposed model is empirically tested using Partial Least Squares (PLS) in supplier–retailer channel in Taiwan. The findings reveal that affective commitment has a positive moderating effect on the negative relationship between coercive power and trust, while calculative commitment has a negative moderating effect on the positive relationship between non-coercive power and trust. The results also indicate that strategic performance partially mediates the effect of trust on financial performance. The research advances theoretical understanding on the complex power–trust relationship and provides insights into the role of commitment in both enabling and undermining channel relationships. The findings highlight the importance of building affective commitment in channel relationships and the critical role of strategic performance in the trust–financial performance relationship.     

When do firms change technology‐sourcing vehicles? The role of poor innovative performance and financial slack

This paper examines the adjustments firms make to the composition of their portfolios of technology‐sourcing vehicles (i.e., alliance, acquisition, or go‐it‐alone) in response to poor innovative performance. We advance a behavioral perspective on the make/buy/ally question, suggesting that differences in financial slack will generate different portfolio decisions. Specifically, we posit that firms with greater levels of financial slack are more likely to respond to poor innovative performance by opting for (1) greater vehicle diversification, and (2) new sourcing vehicles, while firms with less financial slack will respond by (1) downscoping their portfolio of sourcing vehicles, and (2) reverting to more familiar vehicles. We find support for our predictions using extensive data from the population of U.S. public pharmaceutical firms from 1992 to 2006. Copyright © 2015 John Wiley & Sons, Ltd.     

Does firm performance reveal its own causes? the role of Bayesian inference

A central problem in strategic management is how the inference ‘sustainable competitive advantage generates sustainable superior performance’ can be put into practice. In this article we develop a theoretical framework to understand the causal relationships among (1) sustainable competitive advantage, (2) configuration, (3) dynamic capability, and (4) sustainable superior performance. We propose that a firm's competitive advantage, resource bundle configuration, and dynamic learning capability cannot be comprehended by outsiders. Its operational performance, however, can be captured by financial indicators. We promote an inductive Bayesian interpretation of the sustainable competitive advantage proposition. From this viewpoint, the presence or absence of competitive advantage may be reflected in the causal relationship between resource configuration, dynamic capability, and observable financial performance. We apply this theoretical framework to an example drawn from the global semiconductor industry, an area in which resource configuration and dynamic capability are essential to performance. The paper concludes with a summary of the proposed model and suggestions for future theoretical development of strategic management. Copyright © 2009 John Wiley & Sons, Ltd.     

Do supplier perceptions of buyer fairness lead to supplier sales growth?

Despite the growing number of studies focusing on fairness perceptions in buyer–supplier relationships, the pertinent literature mostly focuses on understanding the buyers' perceptions of fairness. In this study, we argue that sellers' perceptions of the fairness of the buyer are equally important but often overlooked. Moreover, existing research fails to provide empirical evidence for examining the long-term effects of fairness on sales growth. We address these gaps by reporting the results of a longitudinal study based on both primary data collected from automotive suppliers in 2009, and objective sales data for these suppliers from an automotive manufacturer over a three-year period after 2009. We employ a latent growth curve model, which reveals that only interactional and distributive fairness have a positive and significant effect on both trust and commitment. Our analysis further reveals that the positive effect of trust and commitment on sales growth is smaller as the supplier's level of dependency on the car manufacturer increases. When the buyer's perception of dependence is considered, these effects are reversed. Several managerial implications of these findings are provided.     

Does importer involvement contribute to product innovation? The role of export market factors and intra-firm coordination

Relying on insights from resource dependence and information processing theory, this study analyzes the extent to which an importer's involvement influences product innovation at the industrial exporter firm. We consider two modes of involvement, collecting importer's feedback and importer integration in the product development effort. We propose that the relationship between importer involvement and product innovation is contingent upon the level of inter-functional coordination within the development firm, and contextual factors related to the export market. Data were collected from export companies participating in different international business-to-business markets. Results show that firms with high inter-functional coordination achieved higher leverage from importer feedback, but obtain no impact from importer integration in product development (PD). Contextual factors affect the relationship between importer involvement and product innovation: importer feedback affects product innovation in environments with intense competition and low technological turbulence. Importer integration in PD has a significant effect on product innovation in environments with low competitive intensity and high technological turbulence. This study contributes to a better understanding of the conditions that allow an exporter firm to create value through external relationships. Theoretical and managerial implications of these findings are discussed.     

Near and dear? The role of location in CSR engagement

Research summary : Building on economic geography and institutional theory, we develop and test theory relating geographic variables to the strength of corporate social responsibility (CSR) engagement and the cost of equity capital. For a large sample of U.S. firms over the period 1998–2009, we find strong and robust evidence that firms located in areas characterized by high levels of local CSR density score higher in CSR engagement. In addition, firms located close to major cities and financial centers exhibit higher CSR engagement compared to firms located in more remote areas. Moreover, the effect of CSR engagement on reducing equity financing costs is even greater for firms in high CSR density areas than for firms in low CSR density areas. Managerial summary : Does the location of CSR engagement by firms affect the strength of CSR engagement by their neighbors? Does the geography of engagement have an impact on financial performance? Our findings show that a firm's CSR engagement increases in areas where there is dense CSR engagement and when it is located near large cities. In these areas, norms, values, and knowledge related to CSR are transmitted to firms through face‐to‐face meetings and frequent social interactions with groups such as peers, labor unions, news media, universities, and community organizations, which tend to be concentrated in large cities. Our findings further highlight that CSR engagement reduces equity financing costs for firms in areas where CSR is widely practiced. Copyright © 2015 John Wiley & Sons, Ltd.     

When are assets complementary? star scientists,strategic alliances,and innovation in the pharmaceutical industry

To answer the question of when are assets complementary, we investigate specific resource combinations along the value chain, focusing on two mechanisms that are central to combining resources for innovation in the pharmaceutical industry: recruitment and retention of star scientists, and 2) engagement in strategic alliances. We propose that resource combinations that focus on the same parts of the value chain are substitutes due to knowledge redundancies. Conversely, we hypothesize that resource combinations that link different parts of the value chain are complements due to integration of nonredundant knowledge. To test these hypotheses, we empirically track the innovative performance of 108 global pharmaceutical firms over three decades (1974–2003). Copyright © 2011 John Wiley & Sons, Ltd.     

When does (not) a coopetitive relationship matter to performance? An empirical investigation of the role of multidimensional trust and distrust

Despite substantive evidence showing mixed results on the association between a coopetitive relationship and performance, surprisingly little theory explains the contingencies under which a coopetitive relationship does (or does not) matter to performance. By combining insights from the trust-distrust literature and 18 in-depth managerial conversations, this study unpacks the multidimensional nature of trust (i.e., goodwill and competence) and distrust (i.e., malevolence and discredibility) and suggests that the effect of a coopetitive relationship matters to performance, when both trust and distrust are present (at moderate to high levels), but fails to do so when one of them is low and the other is high. The results based on a sample of Swedish firms provide full support for the hypotheses. In terms of theoretical contributions, this study challenges the old wisdom suggesting trust as good and distrust as bad, extends the current understanding of trust and distrust beyond their one-dimensionality, and provides a novel approach to understanding when a coopetitive relationship performs well and when it does not. In terms of practical relevance, it suggests that firms adopt a paradox mindset (with a focus on both trust and distrust) to unlock the positive potential of a coopetitive relationship.     

Manufacturer–reseller e-business arrangements: The impact of inequity on relationship performance and the moderating role of dependence

Manufacturer–reseller e-business arrangements are changing the nature of channel relationships. When manufacturers supply e-business tools to their resellers, resellers may perceive that the benefits of technology are not shared equitably. This research explores this issue by examining two technology based antecedents of perceived inequity from the reseller perspective. We also examine the impact of perceived inequity on relationship performance, and the moderating role of reseller dependence on the proposed inequity–performance link. The results of the empirical test involving a sample of 224 resellers suggest that perceived inequity negatively impacts relationship performance, while reseller dependence plays a moderating role. Implications of these findings for researchers and managers are discussed.