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.     

Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm‐level alliance success

In recent years, academics and managers have been very interested in understanding how firms develop alliance capability and have greater alliance success. In this paper, we show that an alliance learning process that involves articulation, codification, sharing, and internalization of alliance management know‐how is positively related to a firm's overall alliance success. Prior research has found that firms with a dedicated alliance function, which oversees and coordinates a firm's overall alliance activity, have greater alliance success. In this paper we suggest that such an alliance function is also positively related to a firm's alliance learning process, and that process partly mediates the relationship between the alliance function and alliance success observed in prior work. This implies that the alliance learning process acts as one of the main mechanisms through which the alliance function leads to greater alliance success. Our paper extends prior alliance research by taking a first step in opening up the ‘black box’ between the alliance function and a firm's alliance success. We use survey data from a large sample of U.S.‐based firms and their alliances to test our theoretical arguments. Although we only examine the alliance learning process and its relationship with firm‐level alliance success, we also make an important contribution to research on the knowledge‐based view of the firm and dynamic capabilities of firms in general by conceptualizing this learning process and its key aspects, and by empirically validating its impact on performance. Copyright © 2007 John Wiley & Sons, Ltd.     

Learning to Reduce Interorganizational Learning: An Analysis of Architectural Product Innovation in Strategic Alliances*

There is wide agreement in analyses of strategic alliances that, regardless of the purpose of the alliance, members of the partner organizations should engage in intensive mutual learning to make the alliance a success. In contrast to this view, the present article shows that in strategic alliances aimed at product innovations by recombining partners' extant technologies, learning between specialists can be reduced considerably without jeopardizing success. This is made possible through four interconnected mechanisms integrated into the concept of transactive organizational learning (TOL): (1) modularization, which allows specialists of different domains to develop modules to a large extent independently of each other and to concentrate communication between themselves on the design of interfaces between modules; (2) storing of knowledge in artifacts instead of in organizational members' memories; (3) localization of knowledge not present in the project team but for which a need has arisen through transactive memory; and (4) knowledge integration by prototyping (i.e., by repeated testing of modules and of interactions between modules until a satisfactorily working end product is achieved). Although these four mechanisms reduce the need for cross‐learning between specialists of different domains, some common knowledge and some cross‐learning between the partners' specialists is still required. Case studies on four of SAP's strategic alliances for product innovation with different partners lend empirical support to this study's concept. The article concludes with implications for practice: Companies should find out whether the TOL mechanisms that reduce time to market are present, to what extent their potential is exploited, and how well they work together.     

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.     

The dynamics of learning alliances: competition,cooperation, and relative scope

We show how the tension between cooperation and competition affects the dynamics of learning alliances. ‘Private benefits’ and ‘common benefits’ differ in the incentives that they create for investment in learning. The competitive aspects of alliances are most severe when a firm's ratio of private to common benefits is high. We introduce a measure, ‘relative scope’ of a firm in an alliance, to show that the opportunity set of each firm outside an alliance crucially impacts its behavior within the alliance. Finally, we suggest why firms might deviate from the theoretically optimal behavior patterns. © 1998 John Wiley & Sons, Ltd.     

What really is alliance management capability and how does it impact alliance outcomes and success?

Strategy scholars have asserted that a firm's alliance capability provides competitive advantage. As interest in alliance capability has grown, we see two streams of research emerge that address different, but equally important, issues related to this subject: one stream that focuses on how alliance capability develops in firms, and a second stream that investigates what elements specifically constitute a firm's alliance capability. In recent literature, the question of how firms develop alliance capability has received greater attention than the question of what elements actually comprise it; therefore, in this study we address the latter issue in great depth. We do this by building on prior research and on our fieldwork, to conceptualize alliance management capability as a multidimensional construct that comprises three distinct but related aspects or skills to address the following aspects in managing a given individual alliance after it is up and running: coordination, communication, and bonding. We then test our conceptualization in a framework that also links this capability to relevant outcomes at the alliance and firm level. We use survey and secondary data from a large sample of interfirm relationships between software service providers and three major global software vendors. We find general empirical support for our conceptualization of alliance management capability and for its predictive validity in impacting certain alliance outcomes. Copyright © 2009 John Wiley & Sons, Ltd.     

Resource allocation for open and hidden learning in learning alliances

A satisfying relationship between alliance members is important for the success of learning alliances, especially those in the Asia Pacific region. While learning alliances create conditions for firms to leverage each other’s knowledge, firms may be opportunistic and appropriate each other’s knowledge, and firms face a tradeoff because appropriation affects the relationship between alliance members. After reviewing previous studies on knowledge sharing in learning alliances, we differentiate firms’ learning into open and hidden learning, and argue that open learning contributes to competence trust, while hidden learning reduces goodwill trust, which consequently affects open learning. Learning uncertainty, introduced in this study, and learning benefits determine expected payoffs of open and hidden learning, which influence firms’ resource investment in them. This study also finds that behavior and output control are important moderators of the relationships between expected payoffs of open and hidden learning and the resources invested in them. Thus, this study advances our understanding of the tension between cooperation and competition and the learning dynamics in learning alliances. The solution to solving the knowledge sharing dilemma in learning alliances is to promote partners’ open learning and to restrain their hidden learning. Therefore, this study argues that, with open and hidden learning, implementing proper control measures and influencing partners’ learning benefits and uncertainties can settle this dilemma. Furthermore, this study classifies the relationships of learning alliances into four types and gives an explanation of why horizontal learning alliances are usually more competitive than vertical ones.     

Performance of alliances: formative stages and changing organizational and environmental influences

There is near unanimous agreement that the performance of alliances usually falls short of expectations. Studies have identified several generic reasons for poor performance: inadequate communication, lack of trust, insufficient complementarity of resources, inappropriate organizational structures and processes, and so on. While we broadly agree with these, knowledge of these self-evident reasons does not seem to have turned the tide of bad news in any way. We show in this paper that it is important to unpack a broad set of antecedent variables, including the ones identified above, and to track them over the crucial formative stages of an alliance. Based on our interviews with 24 senior and middle level managers and professionals of a focal company about 10 of its major alliances, we identify the following four formative stages of an alliance: (1) Recognition , (2) Research , (3) Relationship Set-up , and (4) Ramp up . We show that the primary predictors of success across these stages are not identical, nor their effect uniform. Further, proper completion of all the preceding stages is essential for the success of subsequent stages. We finally show that the compaction of the various successful stages, in particular of the Ramp-Up stage, is one of the best predictors of overall success of an alliance.     

Firm Characteristics and NPD Program Success: The Significant Influence of Global Discovery Management

Managing new product development (NPD) with a global point of view is argued to be essential in current business more than ever. Accordingly, many firms are trying to revitalize their NPD processes to make them more global. Therefore, examining global NPD management is one of the top priorities for research. While scholars have examined global launch management, there has been scant attention on the direct effect of global discovery management on NPD success. Therefore, this study investigates how a globally managed discovery phase enhances a firm's overall NPD success. Drawing upon the resource‐based view (RBV) and using Kotabe's ( 1990 ) generic model for market success in global competition as the overarching framework, this study examines four drivers of NPD success: global discovery management, the firm's “global footprint,” its inbound knowledge sourcing practices (i.e., “open innovation proclivity”), and nationality of the teams (i.e., “cross‐national global NPD team use”). The hypotheses are tested using a sample of 255 business units from multiple industries, headquartered worldwide, and surveyed during the 2012 PDMA Comparative Performance Assessment Study (CPAS). The PLM‐SEM analyses show that, of the four drivers examined, only global discovery management strongly influences a firm's NPD program success. The findings enhance our understanding of the particularities in global NPD. Based on the study's results, suggestions are provided as to how multinationals can leverage their international operations in the course of their front‐end activities.     

Alliance capability,stock market response,and long‐term alliance success: the role of the alliance function

This paper addresses two key questions: (1) what factors influence firms' ability to build alliance capability and enjoy greater alliance success, where firm‐level alliance success is measured in two ways: (a) abnormal stock market gains following alliance announcements and (b) managerial assessments of long term alliance performance; and (2) are the two alternate ways of assessing alliance success correlated? We find that firms with greater alliance experience and, more importantly, those that create a dedicated alliance function (with the intent of strategically coordinating alliance activity and capturing/disseminating alliance‐related knowledge) realize greater success with alliances. More specifically, firms with a dedicated alliance function achieve greater abnormal stock market gains (average of 1.35%) and report that 63 percent of alliances are successful whereas firms without an alliance function achieve much lower stock market gains (average of 0.18%) and only a 50 percent long‐term success rate. We also find a positive correlation between stock market‐based measures of alliance success and alliance success measured through managerial assessments. In addition to providing insights into the development of alliance capability among firms, this paper is one of the first to provide empirical support for the efficient markets argument by demonstrating that the initial stock market response to a key event positively correlates to the long‐term performance and value of the event. Copyright © 2002 John Wiley & Sons, Ltd.     

Learning from competing partners: outcomes and durations of scale and link alliances in Europe,North America and Asia

This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright © 2000 John Wiley & Sons, Ltd.     

Organizational differences,relational mechanisms,and alliance performance

In studying the antecedents of alliance performance, one stream of research has underscored the alignment between partners' characteristics whereas another has concentrated on relational mechanisms such as mutual trust, relational embeddedness, and relational commitment. We integrate these two perspectives by examining how congruence of the partners' cultures and organizational routines facilitates the emergence of relational mechanisms in non‐equity alliances. Our analysis of 420 non‐equity alliances in the information technology industry demonstrates how differences in partners' internal task routines undermine relational mechanisms that in turn impact alliance performance. Partners who acknowledge their latent differences can overcome some of these negative consequences. We advance alliance research by studying the performance implications of alliance partners' organizational differences and by demonstrating how these effects are mediated by relational mechanisms. Copyright © 2012 John Wiley & Sons, Ltd.     

Alliance proactiveness and firm performance in an emerging economy

Alliance proactiveness is a key contributor to the performance of firms engaging in strategic alliances in industrial markets. As a foundation of alliance management capability, alliance proactiveness enables firms to react faster to emergent opportunities and gain early mover advantages. We examine the relevance of this construct and its internal and external contingencies. Specifically, we argue that the impact of alliance proactiveness is enhanced by complementary technological and leadership capabilities, as well as market growth opportunities. We test hypotheses derived from these arguments using dual response survey data of firms in China and find empirical support.     

Japanese/U.S. technological competitiveness and strategic alliances in the biotechnology industry

This paper analyzes the reasons for Japanese/U.S. collaborations in the biotechnology industry, and considers the question of whether such alliances pose a threat to the North American industry. Japan's technological competitiveness in biotechnology is examined in terms of its strengths and perceived weaknesses. Ways in which Japan is attempting to overcome these weaknesses are identified. As well, the strengths and weaknesses of the North American biotechnology industry are assessed. The paper concludes with recommendations for government and R&D managers on how to preserve U.S. competitiveness. R&D managers must keep abreast of their techno-global competitive environments. While organizations can enter into alliances to improve their competitiveness they must be aware of the dangers of collaboration, and to benefit from their alliances they must enhance their organizational learning. Organizations must be aware of the pitfalls of alliance formation, and any alliance must be viewed in its national context. Last, but not least, managers must be more effective in their management of the processes of technological innovation.     

Alliance capabilities: A systematic review and future research directions

The ability to manage, integrate and learn from strategic alliances is essential in today's interconnected and globalized economy. Despite the managerial relevance of alliance capability, there remain several open questions related to the conceptualization of alliance capabilities, their antecedents, processes and outcomes, and future research needs. We address these issues through a systematic review of 94 articles from top-tier journals focused on alliance capabilities. This study makes three contributions. The study (1) defines the concept of alliance capabilities when operating in a dyadic relational context by reviewing the rich alliance capability literature, acknowledging and bridging the works conducted in different fields. We (2) identify the main processes, antecedents and outcomes of alliance capabilities and, through this analysis, pave the way for (3) the creation of a comprehensive research agenda to direct future research efforts. Overall, this study extends the existing literature by providing an integrative view of alliance capability research in various fields.     

Good learners: How top management teams affect the success and frequency of acquisitions

We develop new theory and hypotheses on how a firm's top management team learns from acquisition experience, why, in consequence, the composition of the team is crucial, and how this affects acquisition frequency and success. We focus on the diversity of the top team and argue that heterogeneous teams, as compared to homogenous ones, acquire less but benefit more from their acquisition experience and are more successful with their acquisitions because they avoid mis‐transferring their experiences. We tested our hypotheses on acquisition frequency and success using longitudinal data on more than 2,000 acquisitions by 25 Dutch companies over four decades (1966 to 2006). Copyright © 2013 John Wiley & Sons, Ltd.     

The effects of executives' experiences and perceptions on their assessment of potential technological alliances

Researchers have only begun to provide explanations of how top executives' experiences and perceptions influence organizational decisions. Drawing from a broad theoretical base, this study tests the contention that top executives' personal experiences (age, educational background, and work experience), their perceptions of their firms' attitudes toward technology and risk, and their perceptions regarding their firms' past success with collaborative technological development influence their cognitive assessments of potential technological alliances. Results from the study suggest that top executives with a technical education place more weight on the opportunities provided by the alliance than those with other types of education. Moreover, executives from firms that are perceived to emphasize technology and to have had success with technological alliances in the past tend to focus more on the opportunities provided by the alliance and less on the riskiness of the venture. © 1998 John Wiley & Sons, Ltd     

Experience effects and collaborative returns in R&D alliances

Focusing on the link between prior alliance experience and firm benefits from R&D collaborations, this paper explores whether firms learn to manage their alliances. While prior experience should increase collaborative benefits from the current alliance, I expect these returns: (1) to be most beneficial when alliance activities are more uncertain; and (2) to diminish at high levels of experience. Results from a sample of 464 R&D alliances in the telecom equipment industry generally match these expectations. The positive benefits of prior experience in complex alliances suggest that a broader set of alliance management processes allows the firm to manage situations of ambiguity more readily. The lack of cumulative benefits from prior experience appears to be partly due to knowledge depreciating over time, since only recent experience has a positive impact on collaborative returns. Overall, these results provide empirical evidence of the effect of prior experience on collaborative benefits, both directly and conditionally on alliance characteristics, and have implications for learning to manage organizations more generally. Copyright © 2005 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.     

Interplay between internal investment and alliance specialization in R&D and marketing

A firm's efforts to build its technological and marketing capabilities are not limited to internal investments but can be extended to include external knowledge acquisitions. We examine the interaction between a firm's specialization in R&D or marketing through its internal investments and its alliances in two different industrial contexts. Our results, based on secondary data sources such as Compustat and SDC Platinum from 1985 to 2009, show that the interaction effects of internal specialization and alliance specialization are contingent on the types of tasks (i.e., R&D and marketing) and the industrial context (i.e., high- and low-tech industries). Our findings indicate that a firm in a high-tech industry is able to achieve greater gains by complementing its internal focus on R&D with its external focus on marketing or by focusing on R&D both internally and externally. In contrast, a firm in a low-tech industry is able to achieve greater performance when R&D and marketing complement each other, without regard for how they are aligned through internal investments and alliances. The firm is also able to improve its performance by focusing on marketing both internally and externally. These findings provide new insights into the complementarity between internal investments and alliances.