Interorganizational alliances and the performance of firms: a study of growth and innovation rates in a high‐technology industry

This paper investigates the relationship between intercorporate technology alliances and firm performance. It argues that alliances are access relationships, and therefore that the advantages which a focal firm derives from a portfolio of strategic coalitions depend upon the resource profiles of its alliance partners. In particular, large firms and those that possess leading‐edge technological resources are posited to be the most valuable associates. The paper also argues that alliances are both pathways for the exchange of resources and signals that convey social status and recognition. Particularly when one of the firms in an alliance is a young or small organization or, more generally, an organization of equivocal quality, alliances can act as endorsements: they build public confidence in the value of an organization's products and services and thereby facilitate the firm's efforts to attract customers and other corporate partners. The findings from models of sales growth and innovation rates in a large sample of semiconductor producers confirm that organizations with large and innovative alliance partners perform better than otherwise comparable firms that lack such partners. Consistent with the status‐transfer arguments, the findings also demonstrate that young and small firms benefit more from large and innovative strategic alliance partners than do old and large organizations. Copyright © 2000 John Wiley & Sons, Ltd.     

Collaboration and technology linkages: a strategic supplier typology

This study uses frameworks from the strategic management and operations strategy literatures to explore the relationships among collaboration, technology, and innovation in small and medium‐sized manufacturers. Statistical analysis of the responses of 200 New Hampshire manufacturing companies in four SIC code industries (fabricated metals, industrial equipment, electrical and electronic equipment, and instruments) leads to the development of a strategic supplier typology which is useful in explaining the differences in the composition and performance of various types of suppliers. Copyright © 2000 John Wiley & Sons, Ltd.     

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.     

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.     

Interorganizational cooperation: a new view of strategic alliances: The case of Swedish firms in the international market

Looking at the rate at which organizations/firms are entering into strategic alliances these days, one can understand and/or appreciate the increased research in the area of strategic alliances. The tremendous amount of research on this type of interorganizational cooperation, more or less, have one thing in common. Thus, all seek to increase our knowledge and/or understanding of the potentialities, as well as the challenges inherent in the formation of strategic alliances. What is missing in the existing literature on strategic alliances is an emphasis on the importance of the interacting parties' (i.e., parties in any strategic alliance) interconnected exchange relationships with third parties (i.e., actors who are not officially regarded as partners in an alliance). There is a lack of empirical studies on the nature of and the extent to which networks (third parties) may affect and be affected by the achievement of goals pursued by some focal strategic alliance partners. The paper presents case studies that shed light on this issue. The purpose of this paper, therefore, is to deepen our understanding of the relevance of third parties in a strategic alliance formed between specific focal actors. One important conclusion of the study is that the achievement of the focal actors' goals is affected, in large, by third parties.     

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.     

The nature of partnering experience and the gains from alliances

We examine the conditions under which the prior partnering experience of firms contributes to value creation in their new alliances. We propose that prior experience with the same partners, that is, ‘partner‐specific experience,’ provides greater benefits than ‘general partnering experience’ that encompasses all prior alliances with any partner. We further explore some of the boundary conditions for the effects of partner‐specific experience. We suggest that the effect of partner‐specific experience on value creation in alliances is moderated by the extent to which the assets of the new partner differ from those of the firm's prior partners. We also propose that the firm's own technological and financial resources increase the benefits of partner‐specific experience. Finally, we predict that the value of partner‐specific experience will increase under high levels of firm‐specific uncertainty. We test these hypotheses with comprehensive longitudinal multi‐industry data on joint ventures formed among Fortune 300 firms between 1987 and 1996. Based on stock market returns to joint venture announcements, the results provide support for the contingent value of partnering experience. The implications for managing alliances and advancing organizational learning are discussed. Copyright © 2009 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.

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 note on international market leaders and networks of strategic technology partnering

Interfirm partnering has become a familiar aspect of corporate behavior as it is found in a large number of industries with many Companies participating in strategic alliances. This paper focuses on questions that are related to market structural issues of this phenomenon in an international context. It raises the question whether alliances establish stable networks of firms, and whether market leading firms dominate the world of strategic partnering. Our contribution stresses the need for a further understanding of cooperative behavior in terms of the increase of corporate flexibility and the extension of core competences of companies.     

The legitimacy of strategic alliances: an institutional perspective

Drawing on an institutional perspective, this paper suggests that strategic alliances serve an important legitimating function for firms and that this role, mediated by alliance governance structure and partner selection preferences, has a significant influence on firm and alliance performance. A theoretical framework is proposed that identifies five types of legitimacy associated with strategic alliances and the specific conditions under which legitimation may be an important outcome of strategic alliances. Propositions are developed to explain when firms are most likely to enter into alliances for legitimacy purposes and how the legitimating role of strategic alliances contributes to firm and alliance performance. The paper concludes with a summary and implications of a legitimacy‐based view of alliances. Copyright © 2007 John Wiley & Sons, Ltd.     

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.     

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.     

Local versus global mimetism: the dynamics of alliance formation in the automobile industry

The alliance dynamics among the 35 largest firms in the worldwide automobile industry indicates that the likelihood of an alliance between any two firms depends on the local density of alliances among the members of their strategic groups, rather than on the global density of alliances in the industry. These results suggest that firms most closely observe and imitate the strategic behavior of firms who occupy the same strategic niche rather than the behavior of firms in their industry defined more broadly. Copyright © 2002 John Wiley & Sons, Ltd.     

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.     

A note on the dynamics of learning alliances: competition,cooperation, and relative scope

Khanna, Gulati, and Nohria (1998) examine the dynamics of alliance learning and develop a conceptual framework designed to capture the tension between cooperation and competition. Based on the concepts of private and common benefits and relative scope, the authors explore firms' learning behavior patterns. This note comments on the framework and suggests that although the framework introduces some interesting concepts, the reliance on simple models from economic theory leaves the framework somewhat disconnected from the process of alliance management. Copyright © 2000 John Wiley & Sons, Ltd.     

Dynamic capabilities and strategic management

The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm’s (specific) asset positions (such as the firm’s portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether and how a firm’s competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing internal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival’s costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.     

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.     

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.