Is experience valuable in international strategic alliances?

This study investigates whether firms benefit from prior alliance experiences as they undertake international strategic alliances. Different from previous studies that mostly focus on equity joint ventures, this study investigates non-equity alliances. This specific investigation is essential, because the complexity and uncertainty associated with such alliances potentially magnify the benefits of experiential learning. With a sample of 629 international, non-equity alliances formed by US firms, our results confirm the contribution of ISA experience in general, as well as that of experience specific to partner's country of origin and alliance activity type. The results also reveal a contingent benefit of ISA experiences, where experience of technological cooperation and experience with alliance partners from emerging countries both add more to firm value. We derive consistent evidence, as performance is assessed either by the market's perception of ISA value creation, or by the post announcement operating earnings in practice.     

Value Creation and the Alliance Experiences of Dutch Companies

This paper examines the effect on the market valuation of large Dutch companies following the announcements of international strategic alliances during the period 1985–1992. The effects are distinguished by type of alliance and country of origin of the partnering firms. While international strategic alliances are generally found to have a positive effect on a company’s market value, strategically and culturally distant foreign partners generate a strong negative effect. The results underscore the importance of conducting a strategic, operational and cultural audit of the partnering companies and the envisaged partnership. The audit needs to be taken as a starting point in developing the essential co-operation skills to make the alliance work and should become integrated within a comprehensive performance scorecard.     

Dynamic evolution of alliance portfolios

This research advances in the conceptualization and the operationalization of the factors or microdynamics that determine the choice of partners. Most of the literature in this area of research has centered on the individual alliance without taking into account the set of alliances that a firm makes. This research applies a holistic approach, analyzing the set of alliances as a whole and points to the factors related to alliance portfolios that affect the choice of partners. The authors propose a longitudinal model that allows us to analyze the evolution of interorganizational networks. A Simulation Investigation for Empirical Network Analysis (SIENA) has been applied to a sample of 229 firms, analyzing 10,556 strategic alliances established between them over a 12 year period. The results show that certain factors over which managers exercise a degree of control (deliberate endogenous microdynamics) exert significant influences on the choice of partners by the focal actor and thereby on the dynamic configuration of alliance portfolios.     

The Dynamics of Research Alliances: Examining the Effect of Alliance Experience and Partner Characteristics on the Speed of Alliance Entry in the Biotech Industry

Few studies have moved beyond the dyadic level of an ongoing alliance and examined factors contributing to the success of entering a series of alliances. In this paper we expect biotechnology firms over time to learn from their alliance experience and to develop general alliance capabilities. Specifically, we expect the speed with which they enter into new research alliances, e.g. their alliance formation rate, to be affected by capabilities built up in prior alliances as well as by characteristics of their partners. We use longitudinal event history data for the complete population of US biotechnology firms for 1973–1999 to test four hypotheses about factors affecting the rate of new alliance formation. Our analysis suggests that the speed of entering research alliances is affected by prior experience of the focal firm, but not by partner characteristics. Our findings provide evidence that biotech firms learn how to learn more effectively from multiple research alliances; however, this effect is generalized and not tied to specific characteristics of the alliance partner.     

Motivations for Environmental Alliances: Generating and Internalizing Environmental and Knowledge Value

Environmental alliances are a common response to societal sustainability demands. In environmental alliances, firms collaboratively exploit and explore environmental technologies to address market opportunities while simultaneously generating positive environmental impacts. A striking idiosyncrasy is that in addition to economic value, environmental alliances generate two types of external value: environmental value from positive effects on air, water, land and biodiversity, and knowledge value from innovations in environmental technologies. Research on motivations for environmental alliances is dispersed and underdeveloped compared to the well‐established literature on motivations for strategic alliances that emphasize economic value. This study therefore develops a classification of motivations for environmental alliances by combining the literature on strategic alliances and that on environmental and knowledge value. The resulting classification includes motivations for environmental alliances to generate environmental and knowledge value as well as motivations to create economic value by internalizing environmental and knowledge value. A systematic review of 123 articles on environmental inter‐firm alliances identifies specific motivations to populate the new classification. We show that alliance partners are motivated to share sustainable resources, reduce sustainability risk, respond to stakeholders or invest in specific sustainable assets to generate external value. They collaborate to reduce costs or enhance competitive advantage, reputation or legitimacy to internalize external value. The resource‐based view, resource‐dependence view, institutional theory and transaction cost economics have not previously distinguished between motivations to generate and internalize external value. We extend their area of application from strategic alliances to environmental alliances, and thus beyond the exclusive pursuit of economic value.     

Building Reputations: The Role of Alliances in the European Business School Scene

How should businesses best choose foreign partners as they seek to internationalise? We use reputation theory to examine this question. Building reputation is a key aim on the European Business School scene, and this article starts by using more than 2,000 articles written by European academics in top quality journals to update the LRP research reputation rankings of European Schools. We then look at the way international research collaboration takes place, and find that alliances between schools are far from random. It seems that academics from US and European schools are strongly attracted to form alliances with one another, and the choice process appears to be consistent with reputation theory that suggests US schools seek out the most reputable foreign partners. Moreover, the “charmed circle” of high-reputation partners appears to be defined on a country-to-country basis rather than from a whole-Europe perspective. The lessons for managers in internationalising industries are that international alliance choice must include a reputation perspective, with great care being paid to the exact nature of the foreign partner's achievements.     

International alliance formation and stock market responses:: Industry globalization as an environmental contingency

This study examines the effects of the degree of industry globalization on international alliance formation in terms of the type of alliance chosen by partner firms and stock market responses to the chosen type of alliance. Using a sample of 244 international alliances formed between U.S. and non-U.S. firms for the 1992–97 period, we find that nonjoint venture (joint venture) alliances take place relatively more frequently in global (multidomestic) industries than in multidomestic (global) industries. We also find that in global industries, abnormal returns to nonjoint venture partners are relatively greater than those to joint venture partners, whereas in multidomestic industries, abnormal returns to nonjoint venture partners are relatively smaller, though insignificant, than those to joint venture partners. Our findings suggest that the degree of industry globalization plays an important role in explaining which type of international alliance is likely to be chosen by partner firms when entering an alliance and how stock markets tend to respond to the chosen type of alliance.     

10 Learning and Strategic Alliances

Abstract

Various researchers have suggested that an important explanatory factor for the growth in strategic alliances is that alliances provide a platform for organizational learning, giving firms access to the knowledge of their partners. The notion that alliances are a vehicle for learning is the basis for an important and cross-disciplinary stream of research. This chapter examines theoretical and empirical research in the alliance learning area. We have two central objectives. The first is to integrate a large body of research by examining the key research questions addressed. The second objective is to critically examine the existing research as the basis for establishing a research agenda. Although the alliance learning area has generated a substantial amount of research interest and spawned wide-ranging types of inquiry, many important and substantive managerial issues remain underexplored.     

Strategic technology alliance termination: An empirical investigation

There is growing consensus that overall alliance termination rates are high. However, despite this track record of termination and despite unsurpassed growth rates of strategic technology alliances, little is known about the reasons for their termination. Typically strategic alliances have been characterized as inherently instable, i.e. often involving unplanned and premature termination of the alliance by partnering firms indicating alliance failure. The literature on strategic technology alliances, however, proposes that alliance termination does not always indicate failure, but can be intended and can be a sign of strength. We examine these different perceptions by using a sample of 48 strategic technology alliances in different high-technology industries. The findings in the paper confirm that the rates of termination are rather high for strategic technology alliances. Overall, we found that in particular negative prospects about future cooperation, negative perceptions about joint benefits and the lack of a win-win situation had an impact on the decision to terminate a strategic technology alliance. Also, the fact that some companies opt only for short-term (not for long-term and renewed) cooperation seems to introduce a negative factor into the longevity of strategic technology alliances.     

Technological alliance portfolio configuration and firm performance

Firms pursuing technological alliances to gain competitive advantages have become a ubiquitous phenomenon in today’s business environment. This article examines which technological alliance portfolio configuration is better for focal firm performance using a portfolio rather than a dyadic perspective. To assess technological alliance portfolio effects on Korean pharmaceutical and biotechnology firms, we adopted three explanatory variables—number of alliances, number of partners, and spanning structural holes. The growth rate of revenue and the growth rate of profit are used as dependent variables. We identify two characteristics of technological alliance portfolios from the two-step generalized method of moments estimates. First, we find that between two firms with the same number of alliances, the firm with the larger number of partners would have a better performance. This result is unlike those in previous studies because it distinguishes between the number of alliances and number of partners based on the network theory. Second, we find that spanning structural holes affects firm performance rather like a double-edge sword—it positively affects the growth rate of profit but negatively affects the growth rate of revenue of firms. In short, spanning structural holes is simultaneously beneficial for firm profitability and unfavorable for firm growth. This result differs from those of earlier studies because it shows that a firm spanning structural holes among alliance partners produces either a positive or a negative effect, suggesting that a firm should vary its strategy depending on whether it prioritizes profitability or growth.     

The Alliance formation process

While interest in developing strategic alliances within the food system continues to increase, there remains considerable risk when firms adopt such a cooperative strategy. The risk is due in part to the lack of concrete guidelines that illustrate the steps or stages of alliance development and the important strategic and operational decisions required at each stage. The existence of such guidelines would facilitate alliance formation and enable managers and researchers to better understand alliance practice. This paper provides an alliance formation model that incorporates the process of alliance formation with the strategic and operational considerations required for long term success. The model can be used by managers and academicians to develop and understand alliances.     

Embedded Networks and Suboptimal Resource Matching in Alliance Formations

Interest has been growing in alliance networks, and research has demonstrated several advantages of embedded networks, including joint problem solving. How embedded networks function as social capital and promote alliance formation has also been explored. However, less is known about constraints that they impose on firms’ extensive search for partners. In this study, we advance our understanding of the downsides of embedded networks by proposing that embedded networks facilitate alliance formations, but they may also cause suboptimal resource matching in alliance formations. Specifically, we predict that, in alliances where initial resource matching is more important than ex post collaborative activities, suboptimal resource matching is more likely when firms ally with partners with which they have pre‐existing direct or indirect ties and that such alliances decrease firm‐level resource utilization performance in operations. Using codeshare alliance data from the global airline industry, we find support for our predictions.     

Contextual leadership,transformational leadership and the performance of international innovation seeking alliances

In this paper, we examined aspects of contextual leadership [Osborn, R. N., Hunt, J. G., & Jauch, L. R. (2002). Toward a contextual theory of leadership. The Leadership Quarterly, 13, 797–837] and transformational leadership [Bass, B. M. (1985). Leadership and performance beyond expectations. New York: Free Press] by alliance heads and by executives in the sponsoring firms for a sample of innovation seeking U.S./Japanese alliances in research-intensive sectors. We identified three aspects of performance (a) alliance innovation, (b) the strategic contributions to the U.S. sponsor and (c) the strategic contributions to the Japanese sponsor. We found that (a) knowledge/ information based (contextual dimensions) leadership by the alliance head was associated with higher innovation and strategic contributions to the sponsors and (b) transformational leadership by sponsoring executives was dysfunctional for alliance innovation but contributed positively to the strategic contribution the alliance provided a sponsor and, (c) the linkage between leadership by the alliance head and performance was much more important for some types of alliance governance (administrative) structures than others. That is, we argue that appropriate leadership is embedded in its context.     

What the Japanese have learned from strategic alliances

The major vehicle manufacturers are facing an increasingly turbulent environment. A depressed world economy, rapidly changing technologies and the move towards globalization have brought strong challenges to the key players. One response to these conditions has been the formation of various types of collaborative ventures, in particular, strategic alliances. This article explores the lessons learnt by Japanese companies involved in strategic alliance activity. The nature of Japanese collaborative activity has changed in every decade since the 1950s, from being concerned primarily with gaining technological know-how from overseas to focusing on growing sales in a world market. Because no manufacturer, however large, can take on the huge investment required to dominate the global market, alliance activity is forecast to grow in importance.     

Entrepreneurial orientation in vertical alliances: joint product innovation and learning from allies

This paper clarifies how a firm’s entrepreneurial orientation (EO) affects joint product innovation within a vertical alliance and how this is influenced by increasing technological uncertainty and the absorption of knowledge from the alliance partners. The results of a structural equation model with latent interactions on 171 firms in the manufacturing industry indicate that the focal firm’s EO increases joint innovation, although this positive effect declines when a high level of uncertainty increases. On the other hand, the ability to absorb partners’ knowledge increases joint product innovation. As such, this study’s results contribute to research in the field of vertical alliances, EO, and the theoretical foundation of a dynamic capability perspective.     

Strategic Alliance Temporalities and Partner Opportunism*

The troubling potential for opportunistic behaviour in strategic alliances is acknowledged in both research and practice, and yet the antecedents of such opportunism remain largely unexplored in the literature. In this article we suggest that the inherent temporalities of alliances play significant roles in partner opportunism. We propose a model of potential partner opportunism that assigns antecedent and contingent roles to the temporal horizons of alliances and the temporal orientations of the member firms. We introduce the notion of alliance horizons and suggest that they are constituted by the temporal orientations of the member firms and a number of common alliance formation factors. We also discuss how these alliance horizons in conjunction with the temporal orientations of member firms result in different levels of potential opportunism. Lastly, we develop a number of propositions to facilitate empirical research on the temporal contingencies of partner opportunism and indicate directions for further studies.     

联盟关系协同的股权规制机制研究

联盟关系协同是在一定的规制机制下的联盟系统自组织过程。股权式联盟可被视为一种规制机制,它借助于关系性资产的投入所形成的双边依赖关系在促进联盟成员激励相容、信息对称和利益分享方面发挥协同作用。本文分析了股权规制机制的协同机理,通过对等和非对等关系性资产投入下联盟成员纳什议价过程及结果的比较分析,确定了股权规制机制的协同效应,并结合最优股权结构的决策分析揭示出,对等分享股权有利于实现联盟关系的协同。     

Strategic Alliance Outcomes: a Transaction‐Cost Economics Perspective

Empirical research on strategic alliances has been limited because previous studies examined alliance outcomes, and the factors associated with them, from a single partner in a manufacturing alliance. Furthermore, many of these studies have been done from a transaction cost perspective and researchers have inferred opportunistic behavior, rather than directly measuring it and observing its actual relationship with alliance performance. Building on previous transaction cost theory and research, this study seeks to address these gaps by analyzing factors associated with both opportunistic behavior and alliance performance within a major service sector, namely the US healthcare industry. After controlling for asset specificity and alliance age, we found that partner trustworthiness and contractual safeguards were negatively related to opportunistic behavior. Furthermore, opportunistic behavior was negatively related to alliance performance, as hypothesized. Interestingly, mutual equity investments were found to be unrelated to opportunistic behavior, counter to transaction‐cost logic. These findings refine and extend the transaction‐cost economics perspective regarding our understanding of strategic alliance behavior and outcomes, and offer executives in service‐based industries some practical ideas for assuring favorable strategic alliance outcomes.     

资源互补对机会主义和战略联盟绩效的影响研究

20世纪80年代以来,全球战略联盟的数量激增,逐步成为企业的快速成长方式,但其失败率也非常高。本文以资源依赖理论和交易成本理论为基础,以中国企业为样本,从资源互补和机会主义的角度分析了合作与竞争对联盟绩效的影响。实证研究的结果表明,联盟中的资源互补能够提高联盟的财务绩效与创新,而机会主义则会负向影响财务绩效和创新。同时,适度的资源互补是有效遏制机会主义的手段,过高或过低的资源互补都会使联盟企业处于机会主义的风险之中,即资源互补和机会主义之间的关系呈倒U型的关系。     

Coping with Diversity in Alliances for Innovation: The Role of Relational Social Capital and Knowledge Codifiability

Alliances are increasingly considered a key element for innovation, especially in knowledge‐intensive firms. While this is true, the mere membership to alliances does not explain innovation performance, and thus the alliance's characteristics that determine high performance must be examined. This research address the question of how the diversity of partners in a certain alliance for innovation affects innovation performance, and how this influence can be moderated by certain characteristics, such as the relational dimension of social capital and the type of knowledge shared among partners. The empirical analysis of a sample of 90 biotech companies shows that there is an inverted U‐shaped relationship between alliance partner diversity and innovation performance and confirms the positive moderating effects of relational social capital and knowledge codifiability. These findings contribute to the current research on alliances for innovation by providing empirical evidence on why some alliances perform better than others. Also, the results suggest that the study of alliance partner diversity, as a determinant of alliance performance, should not be addressed in isolation.