Learning: The interface of quality management and strategic alliances

In this paper, we investigate the practice of quality management in strategic alliances. By employing a relational view of inter-organizational competitive advantage, the paper addresses the concept of quality management in strategic alliances and networks. We argue that institutional/network relationships influence the practice of quality within a network. In that regard, firms that have adopted quality management practices are more effective in managing and coordinating their interactions with other firms in the network, which results in their enhanced learning capability within the alliance.The proposed framework recognizes the role of trust and cooperative learning as critical factors that affect the success of strategic alliances. It has been argued that firms within an alliance need to achieve the paradox of control and learning. We examine the role of trust as a control mechanism in strategic alliances and address the importance of cooperative learning within alliances. Several hypotheses have been proposed and future research has been outlined.     

The role of incentives and communication in strategic alliances: an experimental investigation

This paper experimentally examines the determinants of the deviation between potential and realized value creation in strategic alliances. To better understand how decision making in alliances may influence success, we use an experimental design that juxtaposes two important factors that affect alliance members' decisions: economic incentives and communication. The evidence from our experiment sheds light on the relative impact of each, and more importantly, how both factors interact to explain successful outcomes. Copyright © 2009 John Wiley & Sons, Ltd.     

The effect of strategic technology alliances on company performance

Strategic technology partnering between firms has become a growing subject of interest to both companies experimenting with this mode of economic organization and researchers from a wide variety of academic disciplines. In this study an effort is made to measure the effect of strategic technology partnering on companies engaged in such joint efforts. A study of the relevant literature on interfirm cooperation generates some basic understanding of this phenomenon, after which the empirical analysis is expanded with linear structural modeling of a number of relevant explanatory variables setting strategic partnering in a more complex environment.     

A theory of global strategic alliances: The case of the global auto industry

The theory articulated in this paper suggests that the desire to reduce demand and competitive uncertainty are two separate, important motives for alliance formation. Taking this as a starting point, we predict the configuration of horizontal alliances that we might expect to observe within an industry when firms experience these uncertainties to different degrees. An empirical test of this theory using data from the global auto industry yields results consistent with the view (1) that alliances are a device for reducing both the uncertainties that arise from unpredictable demand conditions and those that arise from competitive interdependence, and (2) that variation of demand uncertainty and competitive uncertainty across firms explains differentials in both the intensity and structure of their horizontal alliance activity.     

Interpartner legitimacy in regional strategic networks

Our aim is to add to the knowledge on a network level, focusing on if, and how, interpartner legitimacy affects the success or failure of network formation and development processes. Existing network theories and research tend to focus on resource exchange rather than on how actors perceive each other in terms of being legitimate or not. The purpose of the article is to analyze the interpartner legitimacy's influence on the formation and development processes of regional strategic networks (RSNs) from a network level. Two Swedish cases are discussed in terms of pragmatic, moral and cognitive interpartner legitimacy. The cases and the following discussion illuminate that interpartner legitimacy is important to incorporate into the analytical model if we wish to understand the processes of negotiations on the rules and norms which set the possibilities for survival of multi-actor interactions.     

Structuring interorganizational cooperation: the role of economic integration in strategic alliances

This study addresses a new dimension that describes interdependence between alliance members, namely, economic integration–the extent to which resources contributed by different alliance members and subsequent operations using these resources are effectively blended into an alliance's value chain to the point where if one member withdraws, the remaining member(s) suffer great loss. We posit that economic integration has a linear positive effect on alliance stability but a curvilinear (diminished) effect on alliance profitability. Moreover, when economic integration is stronger, other dyadic variables such as interparty trust, joint governance and procedural justice will have a greater effect on alliance performance. Analysis of 198 cross‐cultural strategic alliances in an emerging market generally supports these propositions. Copyright © 2008 John Wiley & Sons, Ltd.     

The role of strategic alliances in high-technology new product development

The authors examined 905 new product innovations introduced since September 1988 to determine the influences on product innovativeness, with a specific interest in strategic alliances, or cooperative strategies. Findings suggest that single firms, horizontal cooperative strategies, small and mixed'sized firms, biochemical industries, cross-industry product offerings, cross-industry cooperations, the progression of time, and European firms tend to indicate significantly more innovative products. Implications are proposed for business practitioners and researchers with specific application to the diffusion of innovation.     

Managing knowledge leakage in strategic alliances: The effects of trust and formal contracts

Although strategic alliances offer opportunities for knowledge sharing and leveraging, they also carry the risk of knowledge leakage to partner firms. In this study, we conceptualize the notion of knowledge leakage as a multidimensional construct and formalize its measurement. We examine the effects of two dominant governance mechanisms—trust (goodwill trust and competence trust) and formal contracts on knowledge leakage. A survey of 205 partnering firms in China indicates that goodwill trust has a U-shaped relationship with knowledge leakage, whereas competence trust has a negative impact. Moreover, goodwill trust and competence trust interact differently with formal contracts on knowledge leakage. This study offers important theoretical and managerial insights for firms to manage knowledge leakage in strategic alliances.     

Developing relationships in strategic alliances: Commitment to quality and cooperative interdependence

Organizations are using strategic alliances to develop competitive advantages in quality, innovation, and cost. To capture the potential synergies of these alliances requires that the partners develop long-term relationships. This study develops a model of strategic alliance relationship development based on the theory of cooperative and competitive goal interdependence. Thirty pairs of supplier and customer organizations in Xian, China participated in a survey where the supplier indicated the commitment and goal interdependence and the customer rated the relationship's long-term orientation. Results suggest that the commitment by both supplier and customer organizations to quality develop cooperative interdependence, which leads to effective strategic partnerships.     

The evolution of cooperation in strategic alliances: Initial conditions or learning processes?

We examine how the learning, along several dimensions (environment, task, process, skills, goals), that takes place in strategic alliances between firms mediates between the initial conditions and the outcomes of these alliances. Through a longitudinal case study of two projects in one alliance, replicated and extended in another four projects in two alliances, a framework was developed to analyze the evolution of cooperation in strategic alliances. Successful alliance projects were highly evolutionary and went through a sequence of interactive cycles of learning, reevaluation and readjustment. Failing projects, conversely, were highly inertial, with little learning, or divergent learning between cognitive understanding and behavioral adjustment, or frustrated expectations. Although strategic alliances may be a special case of organizational learning, we believe analyzing the evolution of strategic alliances helps transcend too simple depictions of inertia and adaptation, in particular by suggesting that initial conditions may lead to a stable ‘imprinting’ of fixed processes that make alliances highly inertial or to generative and evolutionary processes that make them highly adaptive, depending on how they are set.     

Post‐formation dynamics in strategic alliances

This paper investigates the occurrence and determinants of post‐formation governance changes in strategic alliances, including alterations in alliances' contracts, boards or oversight committees, and monitoring mechanisms. We examine alliances in the biotechnology industry and find that firms' unique alliance experience trajectories affect the likelihood of such ex post adjustments in these partnerships. Transactional features such as the alliance's scope, its division of labor, and the relevance of the collaboration to the parent firm also bear upon alliances' dynamics. We discuss the implications of these findings and how they complement prior research focusing on alliance design or termination at opposite ends of the alliance life cycle. Copyright © 2002 John Wiley & Sons, Ltd.     

Factors influencing partner selection in strategic alliances: the moderating role of alliance context

The growth of alliances has generated considerable interest in this topic among both academics and practitioners. While multiple factors may affect alliance success, partner selection emerges as one of the most influential. Previous studies on alliances present general models that assume the factors (e.g., trust, commitment, complementarity, financial payoff) that drive partner attractiveness and, in turn, the likelihood of selection, are consistent across varying alliance projects and situations. In contrast, the present study proposes a contingency approach grounded in management control theory that suggests the criteria managers use in choosing alliance partners will vary by alliance project type. Specifically, it introduces a framework that addresses when and why managers select partners with certain, specific characteristics. The results of the present study strongly support hypotheses that the critical criteria for assessing alliance partner attractiveness and selection vary depending on the differential levels of process manageability and outcome interpretability inherent in a strategic alliance. Implications for theory and practice are discussed. Copyright © 2008 John Wiley & Sons, Ltd.     

National and corporate culture differences in international strategic alliances: Perceptions of Chinese partners

We consider the effect of national culture and corporate culture differences on the management of international strategic alliances (ISAs). Findings are based on the perceptions of a relatively large sample of Chinese partner firms in ISAs with foreign partners. We find that differences in national culture and corporate culture have contributed to a similar extent to differing views on ISA management. However, findings indicate that differences in national culture and corporate culture have a differential impact on aspects of ISA management. Perception of national culture and corporate culture differences and the contribution of those differences to differing views on the management of ISAs are greater in relatively younger ISAs compared with older ISAs. Managers in equity-based ISAs report fewer problems with culture related impediments to managing ISAs than managers in non-equity-based ISAs.

Ambiguity and the process of knowledge transfer in strategic alliances

This research examines the role played by the ‘causally ambiguous’ nature of knowledge in the process of knowledge transfer between strategic alliance partners. Based on a cross‐sectional sample of 147 multinationals and a structural equation methodology, this study empirically investigates the simultaneous effects of knowledge ambiguity and its antecedents—tacitness, asset specificity, prior experience, complexity, partner protectiveness, cultural distance, and organizational distance—on technological knowledge transfer. In contrast to past research that generally assumed a direct relation between these explanatory variables and transfer outcomes, this study’s findings highlight the critical role played by knowledge ambiguity as a full mediator of tacitness, prior experience, complexity, cultural distance, and organizational distance on knowledge transfer. These significant effects are further found to be moderated by the firm’s level of collaborative know‐how, its learning capacity, and the duration of the alliance. Copyright © 1999 John Wiley & Sons, Ltd.     

Securing and managing an organization's network legitimacy: The case of Motorola China

This study combines concepts from institutional and network theory to explain the currently observed behaviors of organizations in securing their network legitimacy. Organizations secure their network legitimacy by engaging in business, social, and political activities, with key network actors and institutions. This is achieved within an institutional framework of rules, regulations, and ideologies, including any consequential contextual changes. But while network legitimacy plays an important part in an organization's survival, limited attention has been paid to the development of a conceptual framework. In this article we provide one such framework and, specifically examine attributes of successful network legitimacy through an inductive, interpretative case analysis of Motorola China, in a transitional Chinese telecommunication sector.     

The impact of cultural differences in U.S. business-to-business export marketing channel strategic alliances

Given slower growth and fierce competition in the domestic market, combined with increasing opportunities in many overseas markets, more and more U.S. companies are going international. While many doing so may initially use a direct exporting approach that relies on foreign channel members to distribute the product in the host country, over time, strategic alliances among distribution partners may form based on trust, commitment, and cooperation. For these alliances to succeed, the partners' perceptions of these variables need to be congruent so that expectations on each side of the dyad are reasonably similar. However, what happens when the cultural backgrounds of each channel partner are substantially different? This study empirically examines whether cultural differences do affect trust, commitment, and cooperation in international marketing channel alliances between U.S. exporters and their foreign distribution partners. Based on the survey responses from 149 U.S. exporters with marketing alliances abroad, cultural differences do affect trust, commitment, and cooperation. The greater the cultural differences between channel partners, the lower the levels of trust, commitment, and cooperation. Managerial implications are discussed, and study limitations are identified.     

Study of country-of-origin image from legitimacy theory perspective: Evidence from the USA and India

This study explored country-of-origin image (CoI) based on legitimacy theory. The comments and discussions about Chinese products' CoI from both Indian and American customers on public websites were collected and analyzed. The findings show that CoI is essentially a kind of recognition and judgment of a product's legitimacy. Customers judge a Chinese product's pragmatic legitimacy and social legitimacy through both a performance image and institution image aspect of the CoI, respectively. The findings can advance our understanding of CoI phenomena and provide guidance for international marketers in developing countries to manage country-related information more effectively.     

Agglomeration and the choice between acquisitions and alliances: An information economics perspective

Research summary : This research extends agglomeration theory by joining it with information economics research to better understand the determinants of firms' organizational governance choices. We argue that co‐location in a common geographic cluster fosters lower levels of information asymmetry between exchange partners and thus leads firms to employ acquisitions rather than alliances for their external corporate development activities. We further extend agglomeration theory by arguing that the impact of sharing a cluster location on acquisitions versus alliances strengthens with the level and dissimilarity of the exchange partners' knowledge‐based resources as well as with the intra‐cluster geographic proximity of the partners. Evidence from a sample of over 1,100 alliance and acquisition transactions in the U.S. semiconductor industry provides support for our hypotheses. Managerial summary : This paper investigates the role of geographical clustering for firms' external corporate development activities in acquisitions and alliances. We explain how better information is likely to be available among firms co‐located in the same cluster. This suggests that managers should have less need to use alliances over acquisitions as a means of reducing the risk of adverse selection (e.g., overpaying for acquisitions). Our investigation of over 1,100 transactions in the U.S. semiconductor industry shows that common cluster co‐location increases the probability of acquisition relative to alliance. Our arguments and evidence also indicate that the information‐related benefits of cluster co‐location are even more impactful when the parties have more divergent technology bases, possess larger stocks of knowledge‐based resources, or are located in closer geographic proximity. Copyright © 2015 John Wiley & Sons, Ltd.     

The effectiveness of contractual and trust‐based governance in strategic alliances under behavioral and environmental uncertainty

Research summary: We examine the interplay of behavioral and environmental uncertainty in shaping the effectiveness of two key governance mechanisms used by strategic alliances: contractual and trust‐based governance. We develop and test hypotheses, using a meta‐analytic dataset encompassing over 15,000 strategic alliances across 82 independent samples. We find that contractual governance works best under low to moderate levels of behavioral uncertainty and moderate to high levels of environmental uncertainty, while it is detrimental to alliance performance when both types of uncertainty are low or high. Trust‐based governance is most effective at high levels of behavioral uncertainty and low levels of environmental uncertainty. It suffers a large loss of usefulness at high behavioral uncertainty as environmental uncertainty increases. Managerial summary: Strategic alliances allow firms to gain greater efficiency and create value. Yet, many such alliances fail because they are not able to deal with the twin challenges posed by behavioral and environmental uncertainty. Findings from our meta‐analysis imply that under conditions of high behavioral uncertainty and low‐to‐moderate levels of environmental uncertainty, the use of trust‐based governance alongside contractual governance might enhance the latter's effectiveness. The combined effectiveness of contractual and trust‐based governance under high levels of both behavioral and environmental uncertainty is not obvious. When both behavioral and environmental uncertainty are high, contractual governance hurts alliance performance while trust‐based governance does not function at its best either. Under these conditions, it might be better for firms to turn to hierarchy or vertical integration. Copyright © 2015 John Wiley & Sons, Ltd.     

New product introductions below aspirations,slack and R&D alliances: A behavioral perspective

We develop hypotheses based on behavioral theory that explain how high technology firms' new product introduction (NPI) performance below aspiration levels impact the number of R&D alliances, and how slack moderates this relationship. Using panel data of U.S. biopharmaceutical firms, we find that as firms' NPI performance below historical aspiration levels increases the number of R&D alliances they form increases and slack intensifies this relationship. We contribute to alliance research by providing theory and empirical evidence that increases in the distance of NPI below aspirations serve as a motivation for increases in R&D alliances, and empirically to behavioral theory by revealing that NPI goals act similarly to financial performance goals in their impact on firms' actions and slack intensifies this relationship. Copyright © 2015 John Wiley & Sons, Ltd.