The Role of Firms' Collaborative Agreements in the Information Technology Industry Transformation

While most articles on firm partnerships focus on the firm, the alliance or networks, we investigate the role of collaborative agreements during industrial transformation phases. Observation of a single industry, the Information Technology (IT) industry, shows that the growth of collaborative agreements formed by industry leaders in the early 1990s can be interpreted as an attempt to absorb a major industry shock characterized by vertical disintegration and the emergence of 'divided technical leadership'. Such firms have adopted collaborative agreements to maintain their leadership by controlling new entrants in the new industry segments that have resulted from the disintegration. Partnerships became a strategic component of the new 'divided technical leadership' market structure that emerged from the competitive crash of the early 1990s.