View
5
Download
0
Category
Preview:
Citation preview
Submitted by
Mario Hofer, BSc
k01355654, 973
Submitted at
Institute for Strategic
Management
Supervisor
Assoz. Univ.- Prof. Mag. Dr.
Regina Gattringer
Co-Supervisor
Mag. Dr. Sabine Reisinger
Subject
Specialized Management
Competence Global
Strategic Management 1
Linz, July 2020
MASTER’S THESIS
Increasing competitiveness through
innovation with the help of
strategic alliances
Master’s Thesis
To obtain the academic degree of
Master of Science
In the Master’s Program
General Management
JOHANNES KEPLER
UNIVERSITY LINZ
Altenberger Straße 69
4040 Linz, Österreich
www.jku.at
DVR 0093696
II
Statutory declaration
I hereby declare that the thesis submitted is my own unaided work, that I have not used other
than the sources indicated, and that all direct and indirect sources are acknowledged as
references.
This printed thesis is identical with the electronic version submitted.
Linz, July 2020
III
Table of Contents
Executive Summary ............................................................................................................ 1
1 Introduction ...................................................................................................................... 3
1.1 Problem statement ..................................................................................................... 3
1.2 Objectives of the master’s thesis ................................................................................ 4
1.3 Research method ....................................................................................................... 5
1.4 Structure and content ................................................................................................... 6
2. Definition and strategic alliance formation .................................................................... 7
2.1 Definition .....................................................................................................................10
2.2 Theoretical foundations of strategic alliances ..............................................................11
2.2.1 Resource-based view ...........................................................................................12
2.2.2 Dynamic capabilities approach .............................................................................15
2.2.3 Knowledge-based view .........................................................................................17
2.2.4 Transaction cost theory ........................................................................................20
2.2.5 Network perspective .............................................................................................22
2.2.6 Game theory .........................................................................................................25
2.2.7 Comparison of the theoretical foundations ............................................................28
2.3 Motives for strategic alliances .....................................................................................30
2.4 Strategic alliance formation process ............................................................................33
2.5 Strategic alliance governance structures .....................................................................36
3. Managing national and global strategic alliances ........................................................40
3.1 Global strategic alliances ............................................................................................42
3.2 Partner selection .........................................................................................................46
3.3 Critical success factors ...............................................................................................52
3.4. Challenges in managing strategic alliances ................................................................62
4. Increasing innovativeness through strategic alliances ...............................................68
4.1 Strategic alliances to enhance innovation ...................................................................70
4.2 Absorptive capacity .....................................................................................................75
IV
4.3 Innovation strategies for strategic alliances .................................................................77
4.3.1 Open innovation ...................................................................................................78
4.3.2 Coopetition ...........................................................................................................80
5. Competitiveness of companies participating in strategic alliances ...........................82
5.1 Organizational outcomes of strategic alliances ...........................................................85
5.1.1 Resource accumulation ........................................................................................86
5.1.2 Knowledge generation ..........................................................................................89
5.1.3 Innovation performance ........................................................................................96
5.2 Financial performance outcomes of strategic alliances ...............................................99
5.2.1 Market performance ........................................................................................... 100
5.2.2 Sales level .......................................................................................................... 101
5.2.3 Profitability .......................................................................................................... 104
5.3 Negative outcomes of strategic alliances .................................................................. 106
6. Conclusion .................................................................................................................... 108
6.1 Summary of main findings ......................................................................................... 108
6.2 Limitations ................................................................................................................. 112
7. References .................................................................................................................... 114
V
List of Figures
Figure 1 Resource-based rationale of strategic alliances ..................................................................... 12
Figure 2 Product and market development capability ........................................................................... 14
Figure 3 Mediating effect of dynamic capabilities.................................................................................. 16
Figure 4 Framework of knowledge management .................................................................................. 19
Figure 5 Framework of transaction costs theory ................................................................................... 21
Figure 6 Collective real options approach to social alliance dilemma ................................................... 27
Figure 7 Strategic alliance formation motives ....................................................................................... 31
Figure 8 Strategic alliance formation process ....................................................................................... 34
Figure 9 Strategic alliance governance types ....................................................................................... 37
Figure 10 Logic of global strategic alliance value creation .................................................................... 44
Figure 12 Conceptual framework of alliance partner and market selection .......................................... 49
Figure 13 Strategic alliance selection approach in the global aerospace industry ............................... 51
Figure 14 Interplay of trust and commitment in global strategic alliances ............................................ 54
Figure 15 Extranet capability model of inter-firm distribution network performance ............................. 57
Figure 16 Global strategic alliance outcomes through coopetition ........................................................ 59
Figure 17 Management of risks during the strategic alliance process .................................................. 61
Figure 18 Relationships among benefit and risk perception ................................................................. 63
Figure 19 Control mechanism to mitigate potential control problems ................................................... 67
Figure 20 Types of strategic alliances for new product development ................................................... 72
Figure 21 Strategic alliance portfolio resource diversity and firm innovation ........................................ 73
Figure 22 Potential and realized absorptive capacity ............................................................................ 76
Figure 23 Cooperation and competition to increase innovation performance ....................................... 81
Figure 24 Strategic alliance competence model of resources .............................................................. 87
Figure 25 Resource accumulations, process characteristics and performance outcomes ................... 88
Figure 26 Knowledge creation in strategic alliances ............................................................................. 90
Figure 27 Knowledge ambiguity and international knowledge acquisition ............................................ 94
Figure 28 Drivers of dynamic learning for dynamic knowledge articulation .......................................... 95
Figure 29 Open innovation activities for radical innovation ................................................................... 97
VI
List of Tables
Table 1 Primary literature findings concerning definition and process of strategic alliances .................. 9
Table 2 Comparison of the theoretical foundations ............................................................................... 29
Table 3 Influencing strategic alliance formation factors ........................................................................ 35
Table 4 Control, trust and confidence level in different alliance forms .................................................. 39
Table 5 Primary literature findings concerning strategic alliance management .................................... 42
Table 6 Partner selection criteria for international strategic alliances ................................................... 48
Table 7 Typology of organizational cultures .......................................................................................... 53
Table 8 Physical and cultural distances among different countries ...................................................... 65
Table 9 Primary literature findings concerning innovation through strategic alliances ......................... 70
Table 10 Primary literature findings concerning possible outcomes of strategic alliances ................... 85
Table 11 Determinants of knowledge management outcomes ............................................................. 91
Table 12 Types of coopetive innovation projects .................................................................................. 98
Table 13 Efficiency ranking before and after joining strategic alliances ............................................. 103
Table 14 Profitability of financial service alliances .............................................................................. 105
VII
List of Abbreviations
CEFAGE .................................. Center for Advanced Studies in Management and Economics
DBIS ..................................................................................................... Datenbank-Infosystem
EBSCO ................................................................................Elton Bryson Stephens Company
EZB ................................................................................. Elektronische Zeitschriftenbibliothek
GDP ................................................................................................... Gross domestic product
HD-DVD .......................................................................... High Definition Digital Versatile Disc
JKU ...............................................................................................Johannes Kepler University
JV ........................................................................................................................ Joint venture
LISSS ................................................................................. Literature Search Support Service
R&D ............................................................................................. Research and development
ROA .............................................................................................................. Return on assets
ROS ................................................................................................................ Return on sales
VHB .................................................. Verband der Hochschullehrer für Betriebswirtschaft e.V.
WISO ..................................................... Wirtschafts- und sozialwissenschaftliche Datenbank
1
Executive Summary
Resulting from an increasing research interest and scientific literature available concerning
strategic alliances (Sompong, 2014, p. 519), the main purpose crafting this master’s thesis is
to provide specific information to interested readers. Hence, the required specific information
is collected through a secondary data analysis in form of a theoretical desk research.
Furthermore, this scientific work is aimed to provide information concerning innovation and
competitiveness in relation to strategic alliances.
Cooperative relationships among companies, according to Ji and Huang (2010, p. 148), have
been frequently used since the 1980s as a corporate strategy for companies to increase
competitiveness in global dynamic markets. Agarwal et al. (2010, p. 413) claim that companies
might cooperate for realizing value by sharing resources to enhance innovative performance
of products. Hence, this master’s thesis provides an examination of theoretical foundations
concerning the rationale of companies engaging in strategic alliances including expected
outcomes. Furthermore, this master’s thesis examines competitiveness of companies
participating in strategic alliances by enhancing innovation (Lin & Wu, 2014). In order to
understand value generation in strategic alliances, Sompong et al. (2014) have provided
motives of companies to join strategic alliances concerning risks and costs sharing.
The allocated theoretical foundations allow to further investigate success of strategic alliances
in global markets in this master’s thesis. In order to understand how companies cooperate
successfully, Kanungo (2015) has identified success factors of managing global cooperative
relationships between companies as trust, common culture orientation, collaborating with
competitors, and interactive communication. This master’s thesis further examines challenges
in managing strategic alliances successfully concerning cultural differences, opportunistic
behaviour, and tax regimes in foreign countries (Owen and Yawson, 2013; Kang et al., 2014).
However, before selecting strategic alliance partners, Russo and Cesarani (2017, p. 5) argue
that a consensus of strategic objectives between prospective alliance partners might be
essential for creating value. Accordingly, this master’s thesis aims to provide comprehensive
information about the selection of strategic alliances partners in global markets for explaining
efficient collaborations by examining stages as initializing data, predicting, and decision-
making (Wang et al. 2018).
Basically, the main purpose of this master’s thesis is providing a status quo of strategic
alliances concerning the importance of innovation for competitiveness in global dynamic
markets. In relation to innovation through strategic alliances, the importance of absorptive
capacity of alliance partners mentioned by Zahra and George (2002). Furthermore, Zahra and
2
George (2002, p. 192) have provided an illustration of potential and realized absorptive
capacity in exploring and exploiting knowledge regarding innovation and competitiveness in
strategic alliances. With regard to innovation and competitiveness in strategic alliances, two
types of broad innovation strategies for strategic alliances are examined in this master’s thesis
provided by Bianchini et al. (2011) which refer to open innovation and cooperating with
competitors. Accordingly, Lichtenthaler (2011, p. 76) distinguishes open innovation into
inbound and outbound innovation, where inbound open innovation refers to exploring and
acquiring knowledge and outbound open innovation might be applied to explore and
commercialize external knowledge from alliance partners.
The main purpose to draft this scientific work is examining competitiveness of companies
through strategic alliances. For categorizing research literature concerning competitiveness
through strategic alliances, the classification of Kohtamäki et al. (2018) has been applied.
Kohtamäki et al (2018, p. 196) distinguish outcomes of strategic alliances into organizational
and financial performance outcomes. Nevertheless, several empirical research studies have
revealed that strategic alliances also achieve negative results. For instance, the research
papers from Chao (2011) and Gulati et al. (2012) have disclosed that companies engaged in
strategic alliances also obtain negatives outcomes in form of financial and reputational
damages. In relation to competitiveness through strategic alliances, the researchers Callahan
et al. (2013) and Min and Joo (2016) have revealed that strategic alliances have positive effects
on competitiveness, whereas research studies from Varma et al. (2015) and Fernandez et al.
(2018) have revealed otherwise. However, regarding current research results, there is still a
discrepancy among researchers whether strategic alliances support competitiveness or not.
Consequently, more empirical research is required in this field of investigation for answering
this research issue.
3
1 Introduction
1.1 Problem statement
In the 1980s, cooperative relationships amongst companies were an essential part of the
corporate strategies of many companies in order to overcome increasingly fierce market
competition global dynamic business environments (Ji & Huang, 2010, p. 148). Due to highly
unpredictable customer needs and environmental uncertainties, globalization drivers have
accelerated competition among companies with local rivals and global competitors (Kang et
al., 2014, p. 1127). Thus, according to Sompong et al. (2014, p. 519), global competition might
stimulate companies to engage in cooperative relationships with other companies to increase
competitiveness, which can be referred to as strategic alliances. Furthermore, Ji and Huang
(2010, p. 148) claim that in highly global competitive situations, companies which possess
valuable resources can have competitive advantages over other ones. Moreover, Ji and Huang
(2010, p. 148) emphasise that strategic alliances refer to cooperative relationships between
companies with the aim of reaching strategic goals and increasing competitiveness.
According to Sompong et al. (2014, p. 519), technological changes and growing global
competition might force companies to put more effort on developing new products for being
competitive. To remain competitive in dynamic business environments, Estelyiova (2012, p.
172) points out that an access to specific resources is required, which can be difficult to obtain
in the case of small and medium enterprises. Therefore, Widodo (2015, p. 36) emphasise that
cooperative partnerships can enable companies to increase their competitiveness through
exchanging and developing specific knowledge and technologies, which can enhance the
innovative performance of products and services. Another issue companies can face in the era
of globalization, according to Nasser and Abuzaid (2014, p. 77), is increasing importance of
innovation. Thus, Nasser and Abuzaid (2014, p. 77) argue that companies need to differentiate
services and products in order to face intense competition in global dynamic markets.
With regard to increasing importance of innovation, Sompong et al. (2014, p. 520f) state that
companies might engage in strategic alliances to co-develop new technologies, access
required resources, increase market potential, gain external knowledge and to increase
financial efficiency. According to Kanungo (2015, p. 124f), success for local and global
strategic alliances can be enabled through clearly defined mutual goals and objectives, similar
cultural orientation, mutual trust and commitment, interactive communication, and
collaboration with competitors. Furthermore, Widodo (2015, p. 36) claims that through
engaging in strategic alliance, companies can mitigate risks and costs for developing new
corporate business possibilities by developing new innovative products, services, and
4
technologies. However, Kang et al. (2014, p. 1128) argue that collaborating with other
companies can bear risks as to whether strategic alliance partners behave cooperatively or
opportunistically during the partnership which can affect the achievement of collective
developed goals and objectives. Eventually, Elmuti (2001, p. 208f) stresses that risks and
problems that local and global strategic alliances can face might be different based on culture,
inconsistency and clarity regarding goals, opportunistic behaviour, a lack of trust and
coordination problems between management teams.
1.2 Objectives of the master’s thesis
On the basis of a traditional literature review, this scientific work aims to provide a status quo
regarding strategic alliances and their innovation potential for a company to increase
competitiveness in a global dynamic environment. After analysing the process of strategic
alliances through various theoretical foundations, an insight into different types of strategic
alliances to stimulate innovation will be examined. Additionally, crucial components will be
revealed in order to successfully obtain possible organizational, innovative, and financial
performance outcomes as a result of strategic partnerships. Nevertheless, this master’s thesis
will provide negative outcomes of strategic alliances. Furthermore, difficulties arising during
the management of local and global strategic alliances are discussed. Thus, this master’s
thesis addresses the research interest of strategic alliances as a strategy to increase
competitiveness, which a company might use to develop and improve products and services
in an effort to increase market share and profit.
Furthermore, through investigating strategic alliances regarding innovativeness in a global
dynamic environment, this master`s thesis provides a status quo of strategic alliances including
the correlation with innovation and competitiveness. It outlines the rational to build a strategic
alliance with other companies, the most suitable strategic alliance form for enhancing a
company’s innovative ability, and the requirements each company needs in order to obtain
useful information from each other. Moreover, strategic alliances, resulting from efficient
collaborations, may increase competitiveness of companies through various outcomes which
are exemplified in this master’s thesis. Nevertheless, by analysing scientific literature critically,
gaps in the research area of strategic alliances concerning success factors and challenges in
managing strategic alliances are identified. Thus, this master’s thesis provides interested
readers with an examination of the status quo of strategic alliances including a link to
innovation performance for sustaining in a global dynamic environment.
5
Research questions:
• How are strategic alliances defined in a global dynamic environment?
• How can strategic alliances help to increase competitiveness through innovation for
sustaining in a global dynamic environment?
• Which outcomes are created through strategic alliances and how are they effecting
competitiveness of companies engaged in strategic alliances?
After reading this master’s thesis, readers should understand how a strategic alliance may
support companies enhancing innovation performance to sustain in a global dynamic
environment. Furthermore, the reader should be capable identifying benefits and difficulties in
managing strategic alliances. Additionally, an understanding of how innovativeness can be
enhanced to create a beneficial output for a company through engaging in a strategic alliance
will be made clear.
1.3 Research method
This master’s thesis is designed as a theoretical desk research in which secondary data from
scientific literature sources is analysed. Therefore, primarily scientific articles, books and
empirical research studies are examined and used in this scientific work for completing the
above-mentioned objectives. According to Greenhoot and Dowsett (2012, p. 3), the analysis
of secondary data includes the utilization and examination of existing data which was collected
in advance. The main objective of a secondary data analysis is to build on previously collected
data and knowledge for addressing newly developed research questions. Ramdhani et al.
(2014, p. 49) state that for providing a reliable systematic literature review, following criteria is
required:
• Formulation of the research question
• Selection and access of the relevant literature
• Analysis, synthesis, and dissemination of the findings
Considering the recommend criteria for a systematic literature review from Ramdhani et al.
(2014), the research questions for this master’s thesis were developed, followed by the
selection of relevant data through the databases provided by the Johannes Kepler University
(JKU) Digital Library. Furthermore, the fundamental literature regarding the definition,
theoretical foundations, motives, formation process and governance forms of strategic
alliances via the different databases provided by the JKU Digital Library, some important
keywords for identifying relevant scientific articles were identified. The keywords are strategic
6
alliances, theoretical foundations of strategic alliances, strategic alliance success factors,
global strategic alliances, innovation and strategic alliances, types of strategic alliances,
strategic alliance formation process, and outcomes of strategic alliances. Most of the scientific
articles were collected through DBIS and EZB eJournals which allocate access to the
databases that are licensed by the JKU. Moreover, databases like EBSCO host, Emerald
Insight, ScienceDirect, LISSS, Econlit, SpringerLink, SAGE Journals and WISO are used for
finding the relevant literature to elaborate the research questions. For accessing scientific
literature, Google Scholar is applied to identify them, where the provided databases of the JKU
are utilized to obtain them.
According to Kelly et al. (2014, p. 228), in order to increase the scientific research quality, a
process called peer review can be applied which aims to ensure that only high-quality research
articles are published in reputable journals. As such, the choice was made to use the peer
review platform VHB in order ascertain the quality of the piece of work based on the review
from the author’s peers. The database of the above-mentioned peer review platform VHB
classifies academic journals into different classifications such as A+, A, B, C, D and some
which have no rating available. In an effort to complement the rankings of the journals that are
missing from the VHB online database, journals rankings from CEFAGE were additionally
used. The other database CEFAGE classifies the academic management literature into AAA,
AA, A, B, C and D. The synthetisation and dissemination of the data proposed by Ramdhani
et al. (2014) will be applied for the conclusion of this master’s thesis at the end of the paper.
1.4 Structure and content
The first chapter covers an introduction to this master’s thesis including the problem statement,
objectives and chosen research method. Furthermore, the first chapter gives an outlook
concerning the content and structure of this master’s thesis. Chapter two illustrates strategic
alliances in more detail and examines theoretical foundations in relation to the rationale of
companies to engage in strategic alliances such as game theory, resource-based view,
dynamic capability view, transaction cost theory, knowledge-based view and the network
theory. A definition of strategic alliances, motives of companies to join strategic alliances,
different governance forms and stages in the strategic alliance formation are further illustrated
in the second chapter. The third chapter covers the management of global and national
strategic alliances including objectives, partner selection process, critical success factors and
challenges. The fourth chapter in this master’s thesis examines the relationship between
strategic alliances and innovativeness including the importance of absorptive capacity for
strategic alliances partners. Furthermore, innovation strategies for strategic alliances for
increasing competitiveness are further discussed. The fifth chapter covers possible outcomes
7
of strategic alliances in relation to competitiveness of participating companies. Possible
outcomes provided in this master’s thesis are interorganizational learning and knowledge
creation, increased innovativeness, and organizational and financial performance outcomes.
Nevertheless, the fifth chapter further provides negative outcomes for companies engaged in
strategic alliances. Finally, a summary and evaluation of the main findings of the theoretical
framework of strategic alliances in relation innovation performance and competitiveness and
some limitations will be given.
2. Definition and strategic alliance formation
The aim of this chapter is providing a detailed theoretical understanding of strategic alliances.
Thus, the following subsection provides a definition of strategic alliances where distinct views
are compared. Theoretical foundations based on the resourced-based view, dynamic
capabilities approach, transaction cost theory, knowledge-based view, network perspective
and game theory are also brought in line with the research topic. Furthermore, in the following
subsections, strategic alliance motives, governance forms and the alliance formation process
provide theoretical understanding of strategic alliances. The following Table 1 states the
primary scientific literature sources applied in this chapter including authors, title, topic, key
findings, and corresponding journal rankings from VBH online, and additionally from CEFAGE.
The journal ranking is provided in the round bracket corresponding to the journal name.
Authors, journal Title of research paper
Topic Key findings
Anand et al. (2010),
Organization Science
(A+)
Alliance Activity as a
Dynamic Capability in
the Face of a
Discontinuous
Technological Change
Dynamic
capabilities
approach
Identification of habitual and
secondary activities to reach
dynamic capabilities in form of:
• Core capabilities
• Complementary
Capabilities
Das and Teng (1998),
Academy of
Management Review
(A+)
Between Trust and
Control: Developing
Confidence in Partner
Cooperation in Alliances
Governance
structure
Comparison of trust, control,
and confidence level in
different strategic alliance
governance forms
8
Authors, journal Title of research paper
Topic Key findings
Das and Teng (2000),
Journal of
Management (A)
Resource-Based Theory
of Strategic Alliances
Resource-
based view
Resource-based theory of
strategic alliances:
• Resource-based rationale
• Alliance formation
• Structural preferences
• Alliance performance
Grant (1996), Strategic
Management Journal
(A+)
Toward a knowledge‐
based theory of the firm
Knowledge-
based view
Relevant characteristics for the
exploration of knowledge to
create value:
• Transferability
• Capacity for aggregation
• Appropriability
• Specialization of
knowledge
Gulati (1998),
Strategic Management
Journal (A+)
Alliances and Networks Network
perspective
Key issues of networks in
strategic alliances:
• Formation process
• Governance mode
• Dynamic evolution
• Performance of alliances
and consequences
Judge and Dooley
(2006), British Journal
of Management (B)
Strategic Alliance
Outcomes: a
Transaction-Cost
Economics Perspective
Transaction
cost theory
Governance mechanisms to
reduce opportunistic behaviour
in strategic alliances:
• Mutual equity investment
• Contractual safeguards
Lew and Sinkovic
(2013), Long Range
Planning (B)
Crossing Borders and
Industry Sectors:
Behavioural
Governance in Strategic
Alliances and Product
Innovation for
Competitive Advantage
Resource-
based view
Governance mechanisms in
technological strategic
alliances to enhance
performance outcomes:
• Process control
• Technological commitment
9
Authors, journal Title of research paper
Topic Key findings
Lin and Wu (2014),
Journal of Business
Research (B)
The alliance innovation
performance of R&D
alliances: The
absorptive capacity
perspective
Dynamic
capabilities
approach
Identification of dynamic
capabilities enabled through
valuable, rare, inimitable, and
non-substitutable resources
McCarter et al. (2011),
Academy of
Management Review
(A+)
Testing the Waters:
Using Collective Real
Options to Manage the
Social Dilemma of
Strategic Alliances
Game theory Identification of a structural
and motivational approach to
reduce social uncertainty in
strategic alliances by collective
real options
Nielson (2007),
International Business
Review (B)
Determining
international strategic
alliance performance: A
multidimensional
approach
Strategic
alliance
formation
Relationship of pre-alliance
and post-alliance formation
factors on strategic alliance
performance outcomes.
Teng and Das (2008),
Management decision
(C)
Governance structure
choice in strategic
alliances: The roles of
alliance objectives,
alliance management
experience, and
international partners
Governance
structure
Conceptualization of strategic
alliance governance forms:
• Joint ventures
• Minority equity alliances
• Contractual alliances
Varadarajan and
Cunningham (1994),
Journal of the
Academy of Marketing
Science (A)
Strategic Alliances: A
Synthesis of Conceptual
Foundations
Strategic
alliance
motives
Underlying motives to
establish strategic alliances:
• New market entry
• Product development
• Resource acquisition
Zaheer et al. (2010),
Academy of
Management
Perspectives (B)
It’s the Connections:
The Network
Perspective in
Interorganizational
Research
Network
perspective
Definition of networks as:
• Resource access
• Source of trust
• Power and control tool
• Signalling mechanism
Table 1 Primary literature findings concerning definition and process of strategic alliances
10
2.1 Definition
The research interest of scholars concerning interorganizational relations between companies
has been increasing since the 1970s, where the emphasis was on extracting monopoly rents
and gaining market power (Koza & Lewin, 1998, p. 255). However, the research interest in
interorganizational relationships has shifted to different forms of global cooperation strategies
between companies in relation to innovative capabilities during the last three decades (Li et
al., 2019, p. 1). According to Parkhe (1993, p. 794), strategic alliances refer to cooperative
interfirm agreements characterized by an inherent instability which might emerge from
uncertainty concerning future behaviour of alliance partners. Furthermore, Gulati (1998, p.
293) states that such a cooperative agreement might involve the sharing, exchange or co-
development of technologies, service, or products. Moreover, Agarwal et al. (2010, p. 413)
emphasise that such cooperative arrangements between two or more companies or
competitors might aim to realize potential value through sharing and generating specific
resources such as knowledge which can be transformed into increased innovative
performance of products or services. Consequently, cooperative relationships between
companies can arise through various motives, goals, and objectives.
Accordingly, Gulati (1998, p. 293) defines strategic alliances as:
“voluntary arrangements between firms involving exchange, sharing, or co-development of
products, technologies, or services”.
In the same regard, Parkhe (1993, p. 795) argues that a strategic alliance might involve
linkages and flows by utilizing resources and governance structures from independent
companies to work collectively to reach the individual goals that are associated to the corporate
mission. Due to the participation in a strategic alliance, Agarwal et al. (2010, p. 414) claim that
a company can engage in an international agreement that consists of multiple exchange
partners to gather and share knowledge, occupy specific resources and participate in value-
creating activities which can create synergies between the resources of exchange partner to
the strategic alliance outcome. Therefore, Ko and Joo (2013, p. 2277) emphasise that a
strategic alliance can be referred to as an efficient method to form a relationship between
different organizations for developing specific ties with common goals.
Correspondingly, Agarwal et al. (2010, p. 414f) highlight that strategic alliances can be
established with the intention that all strategic alliance partners can profit from the collaboration
through creating economic value. However, according to Agarwal et al. (2010, p. 415), strategic
alliances share a pool of resources for collectively creating an economic value which can bear
some potential risks for alliance partners regarding free riding and property rights.
11
Furthermore, Haeussler et al. (2012, p. 218) claim that strategic alliances are established in
an effort to generate and commercialize new improved products by developing new
technology. Hence, Haeussler et al. (2012, p. 219) argue that due to the risks of occupying
firm-specific resources and free riding of strategic alliance partners, companies may require to
monitor strategic alliance partners and to provide for protecting valuable resources, which will
be explained further in the following subchapter of theoretical foundations of strategic alliances.
2.2 Theoretical foundations of strategic alliances
The previous subchapter illustrated different definitions of strategic alliances which are based
on various theoretical foundations. According to Gulati et al. (2012, p. 532) strategic alliances
between companies bear many risks as self-interest seeking of strategic alliance partners
including cheating and stealing among alliance partners, which can lead to failure. In order to
explain the rationale of companies to establish strategic alliances, Muthoka et al. (2016, p. 3)
emphasise that various perspectives can be applied in relation to transaction costs, resource
acquisition, interorganizational learning, collective risk reduction and strategic rationale as
increased competitiveness. Nevertheless, Russo and Cesarani (2017, p. 2) state that
companies engaged in strategic alliances are able to generate value by various sources as
economies of scale, managing risks, minimize costs and interorganizational learning between
alliance partners
Accordingly, Gulati et al. (2012, p. 532) point out that for considering failure of strategic
alliances, sociological and economic studies are applied to expound cooperation issues in
strategic alliances. Furthermore, Gulati et al. (2012, p. 532) stress that strategic alliance
managers might require psychological, political, diplomacy and legal competencies for
collaborating efficiently. In this subsection, various research streams applying diverse
theoretical theories on strategic alliance research will be examined, which are:
• Resource-based view (Wernerfelt, 1984; Das & Teng 2000; Lew & Sinkovics, 2013)
• Dynamic capabilities approach (Teece et al., 1997; Anand et al., 2010; Lin & Wu 2014)
• Knowledge-based view (Grant 1996; Grant & Baden-Fuller 2004)
• Transaction cost theory (Williams, 1981; Judge & Dooley, 2006)
• Network perspective (Powell, 1990; Gulati 1998; Zaheer et al., 2010)
• Game theory (Parkhe, 1993; Argawal et al. 2010; McCarter et al., 2011)
12
2.2.1 Resource-based view
The resource-based view of the firm, developed by Wernerfelt (1984), explains the resource
exploitation of companies in relation to competitiveness in global dynamic markets. Wernerfelt
(1984, p. 172) defines resources as intangible and tangible assets that are tied semi-
permanently to a company such as in-house knowledge of a technology, brand names, trade
contacts, employment of skilled personnel, efficient procedures, capital or machinery. In order
to explain value creation in strategic alliances, Wassmer and Dussage (2011, p. 47) point out
that acquiring and co-developing strategically specific resources in strategic alliances serve a
strategic approach, where companies can generate value. Furthermore, Wassmer and
Dussage (2011, p. 47) state that the resource-based view is applied from researchers as a
critical theoretical construct to examine competitiveness in strategic alliances.
According to Das and Teng (1998, p. 23), through establishing or entering strategic alliances,
companies can acquire firm-specific resources such as technologies or knowledge, which
companies might not be able to access without alliances. Furthermore, Lew and Sinkovics
(2013, p. 15) state that companies who operate in high technology areas tend join global
strategic alliances to obtain complementary resources to increase market share in global
dynamic markets. Hence, Lew and Sinkovics (2013, p. 17) argue that companies can increase
the diversity of its resources through the exchange of complementary technological resources
which other companies. Moreover, Ko and Joo (2013, p. 2277) claim that a company who
concentrates on strengthening its internal resources can distinguish itself from rivals and in
this context entering a strategic alliance might serve as an approach to enhance the internal
resources of a company by acquiring external resources from other companies.
Correspondingly, Das and Teng (2000, p. 33) point out that the resource-based view can be
applied to examine acquired resources of strategic alliance partners concerning
competitiveness in markets. Hence, Das and Teng (2000, p. 33) divide the resource-based
theory based on strategic alliances into four different parts: resource-based rationale, alliance
formation, structural preferences and into alliance performance. The following Figure 1
illustrates the four components of the resource-based view in relation to strategic alliances
provided by Das and Teng (2000, p. 33).
Figure 1 Resource-based rationale of strategic alliances (Das & Teng, 2000, p. 33)
13
Regarding the resource-based view, Das and Teng (2000, p. 37) emphasise that a company
might have two different motives to join a strategic alliance: to access complementary
resources, and to retain and develop their own resources by complementing them with other
resources. Furthermore, Das and Teng (2000, p. 38) state that strategic alliance partners who
occupy specific resources can facilitate the formation process of strategic alliances. Hence,
Das and Teng (2000, p. 40) point out that specific resource characteristics of alliance partners
as imperfect mobility, imitability and substitutability can be prerequisites for the strategic
alliance formation. Imperfect mobility refers to the inability of companies to move resources
from one company to another (Das and Teng, 2000, p. 40). Moreover, Das and Teng (2000,
p. 43) argue that strategic alliance partners have four categories of structural preferences:
• Unilateral contract-based alliances
• Bilateral contract-based alliances
• Equity joint ventures
• Minority equity alliances
According to Das and Teng (2000, p. 43), unilateral contract-based alliances represent a
transfer of property rights as a licensing agreement, R&D contracts or the exchange of
technology for money. On the contrary, Das and Teng (2000, p. 43) state that bilateral contract-
based alliances may be applied when strategic alliance partners have a sustained production
of property rights. Furthermore, Das and Teng (2000, p. 43) highlight that equity joint ventures
are established to integrate collective efforts of the alliance partners through separate entities.
Whereas in minority equity alliances, Das and Teng (2000, p. 46) stress that one or more
strategic alliance partners can take an equity position in another one. Moreover, Das and Teng
(2000, p. 51) emphasise that the resource alignment of strategic alliance partners can affect
the alliance performance through collective strengths and inter-firm conflicts. Thus, Das and
Teng (2000, p. 51) point out that collective strengths through overall resources and
competencies of strategic alliances can increase the alliance performance. However, Das and
Teng (2000, p. 52) argue that inter-firm conflicts can lead to operational conflicts between
alliance partners concerning varying interests, which might harm the overall performance of
strategic alliances.
Complementarily, the research paper from Lew and Sinkovic (2013) aims to correlate strategic
alliance governance mechanisms, firm-level innovation capabilities and possible performance
outcomes in the global computing industry in relation to the resource-based view. Regarding
the resource-based view, Lew and Sinkovic (2013, p. 17f) emphasise that product
development in strategic alliances refers to a complementation of internal existing with external
14
acquired resources. Furthermore, Lew and Sinkovic (2013, p. 18) state that companies which
operate innovation-oriented are able to use product development to increase competitiveness
in global markets. The following Figure 2 exemplifies the relationship between three
dimensions of international technological alliance governance mechanisms, possible
innovation capabilities and the opportunity to increase performance outcomes for global
strategic alliances.
Figure 2 Product and market development capability (Lew & Sinkovics, 2013, p. 18)
According to Lew and Sinkovics (2013, p. 19), governance mechanism in strategic alliances
can promote the development of new products by process control and technological
commitment, which involves a detailed contract among alliance partners. Furthermore, Lew
and Sinkovic (2013, p. 20) stress that through launching and market monitoring, strategic
alliance partners support the enforcement of technological capabilities to create value.
Moreover, Lew and Sinkovic (2013, p. 20) point out that the development capability of new
products of a company can enhance the market development capability to determine new
markets. Accordingly, Lew and Sinkovic (2013, p. 20f) claim that innovation capabilities of
technological-based global strategic alliances can increase sales growth, profitability, and ROI.
In general, the resource-based view is applied in this master’s thesis to explain the rational of
companies to form strategic alliances, and to examine competitiveness through strategic
alliances. However, the following subchapter intents to provide an understanding of how the
dynamic capability approach is related to strategic alliances.
15
2.2.2 Dynamic capabilities approach
After examining the resource-based view regarding formation and competitiveness of strategic
alliances, this subchapter explores the dynamic capabilities approach relating to the
development of capabilities in strategic alliances. The dynamic capabilities approach, which
was defined by Teece et al. (1997), can be referred to as an extension of the resource-based
view. According to Teece et al. (1997, p. 515), the dynamic capabilities approach refers to the
capability of companies to generate, integrate and redesign acquired resources and
competencies for dealing with global dynamic business environments. Hence, the term
dynamic refers to the capability to regenerate competences for reaching a consensus with
global dynamic business environments enabled through specific innovative capabilities (Teece
et al., 1997, p. 515). Furthermore, Teece et al. (1997, p. 515) state that the term capabilities
may underline the main function of the strategic management in integrating, adapting, and
redesigning external and internal resources and competences to adjust the needs of a
changing business environment.
According to Anand et al. (2010, p. 1214), a dynamic capability can be referred to the
establishment and development of a strategic alliances for the purpose of improving the
existing bundle of resources of a company to enter new markets through increased innovative
abilities. Furthermore, Russo and Cesarani (2017, p. 3) argue that companies who operate in
dynamic business environments might integrate, recreate and renew its resource stock in order
to stay competitive, which can be enabled by forming a strategic alliance. Moreover, Russo
and Cesarani (2017, p. 3) state that successful strategic alliances may not only refer to the
relationship between alliance partners, but also to collective established dynamic capabilities
within alliances. Hence, Anand et al. (2010, p. 1215) claim that dynamic capabilities within
strategic alliances can be distinguished between:
• Core capabilities
• Complementary capabilities
Anand et al. (2010, p. 1215) stress that core capabilities of companies refer routines including
specific knowledge, competencies and physical assets that are inherent in the product
development process as technological abilities. Furthermore, Anand et al. (2010, p. 1216) state
companies tend to join strategic alliances to obtain specific resources when technological
changes affect their business operations and when internal development is insufficient through
the acquisition of resources for creating new capabilities. Complementary capabilities,
however, refer, according to Anand et al. (2010, p. 1217), to skills of companies to profit from
core technological capabilities enabled by combining know-how with other capabilities.
16
Moreover, Anand et al. (2010, p. 1218) point out that supplementing complementary
capabilities, concerning strategic alliances, serve as an incentive for companies to form
strategic alliances with the aim of enhancing innovation performance.
At the same time, Lin and Wu (2014, p. 408) state that a company might already possess
internal competencies and abilities while others can be acquired through joining a strategic
alliance. Furthermore, Lin and Wu (2014, p. 409) point out that by integrating internal and
external resources as knowledge, strategic alliance partners can develop new products to
increase competitiveness. Moreover, Lin and Wu (2014, p. 409) emphasise that companies
within strategic alliances can increase their knowledge base by exchanging information.
Hence, Lin and Wu (2014, p. 409) claim that dynamic capabilities might be an intermediary to
transform knowledge into valuable, rare, inimitable and non-substitutable resources (VRIN
resources) for enhancing the performance within strategic alliances, as shown in Figure 3.
Figure 3 Mediating effect of dynamic capabilities (Lin & Wu, 2014, p. 409)
Lin and Wu (2014, p. 409) stress that VRIN resources include for example specialized know-
how, reputation and corporate strategic alliance experience that is above the industry average.
Whereas non-VRIN resources are for example capital, real estate property and equipment of
a company that are above the industry average (Lin & Wu, 2014, p. 409). Consequently, Lin
and Wu (2014, p. 410) point out that VRIN resources positively affect the development of
dynamic capabilities, which can lead to increased performance of strategic alliances.
According to Anand et al. (2010, p. 1214), research literature concerning dynamic capabilities
of companies primarily addresses the development of competencies allowing them to increase
competitiveness. Thus, in this master’s thesis the dynamic capabilities approach is examined
concerning the formation and efficiency of strategic alliances, as Anand et al. (2010, p. 1214)
17
emphasise that companies engaged in strategic alliances are able to enter new markets, face
technological changes and increase competitiveness through acquiring dynamic capabilities
of alliance partners. Nevertheless, the next subchapter emphasises on the knowledge-based
view in line with strategic alliances.
2.2.3 Knowledge-based view
The knowledge-based view of the firm, developed by Grant (1996), aims to provide a
theoretical framework to consider firm-specific knowledge as an essential resource that might
be difficult to imitate which can explain sources of a possible sustained competitive advantage
of a company. Thus, Grant (1996, p. 110) points out that the following characteristics may be
relevant for the exploitation of knowledge within a company to generate value:
• Transferability
• Capacity for aggregation
• Appropriability
• Specialization of knowledge acquisition
According to Grant (1996, p. 111), transferability of knowledge can be critical for of company
to create value as there might be implicit or tacit knowledge in which people possess specific
know-how and explicit knowledge based on facts and theories. Hence, Grant (1996, p. 111)
states that explicit knowledge can be revealed through communicating, whereas tacit
knowledge might be revealed during its application which can be difficult to codify.
Furthermore, Grant (1996, p. 111) points out that capacity for the knowledge aggregation can
be significantly increased through a common language. Moreover, Grant (1996, p. 111)
emphasises that appropriability, which refers to the ability to receive a return similar to the
created value of a resource, where for example a lack of clear property rights and a resulting
ambiguity of the knowledge ownership can decrease the value. Eventually, Grant (1996, p.
112) supposes that effective knowledge generation may require individuals to specialize in
specific knowledge areas during knowledge creation process. Consequently, Grant (1996,
p.114) emphasises that the coordination and integration of specific knowledge can be related
to four mechanisms:
• Rules and directives
• Sequencing
• Routines
• Group problem solving and decision-making
18
Grant (1996, p. 114f) points out that rules and directives such as forecasts, plans, standardized
information and communication systems, policies and procedures, and rules can increase the
quality of created knowledge within a company. Furthermore, Grant (1996, p. 115) stresses
that organizational production activities that each expert may be able to input independently
through a separate time slot by a time-patterned sequence can enhance the generation of
knowledge. Moreover, Grant (1996, p. 115) emphasises that routines are another critical factor
which can support specific tasks of individuals such as the navigation of a ship, the operation
of fast food restaurants or a surgical operating team. However, according to Grant (1996, p.
115), communicating tactic knowledge can bear difficulties when a consensus of decision-
making within a group is not given.
Furthermore, according to Grant and Baden-Fuller (2004, p. 64), in relation to the knowledge-
based view, a company may identify two areas of knowledge management including activities
that increase the stock of knowledge of a company and activities that apply already existing
knowledge for creating value. Thus, Grant and Baden-Fuller (2004, p. 64) emphasise that
activities which increase the knowledge base of companies refer to knowledge exploration or
development. Furthermore, Grant and Baden-Fuller (2004, p. 64) point out that through
activities which apply existing knowledge of companies refer knowledge exploitation.
Moreover, Grant and Baden-Fuller (2004, p. 64) stress that, concerning strategic alliances,
differentiation between knowledge exploitation and knowledge exploration corresponds to a
main distinction on how knowledge can be shared among strategic alliance partners.
Similarly, Grant and Baden-Fuller (2004, p. 64) state that knowledge development and
application in strategic alliances can be distinguished from the manner where knowledge is
shared among partners. Furthermore, Grant and Baden-Fuller (2004, p. 64) stress that
knowledge development supports interorganizational learning in which each partner might
transfer and absorb each other’s knowledge base. Moreover, Grant and Baden-Fuller (2004,
p. 64) emphasise that knowledge application refers to knowledge sharing where alliance
partners intend to exploit complementary knowledge from each other for creating specialized
knowledge. Hence, Grant and Baden-Fuller (2004, p. 67) argue that through strategic
alliances, companies might establish knowledge for developing specialized products and have
divided it into efficiency of:
• Knowledge application
• Knowledge integration
• Knowledge utilization
19
According to Grant and Baden-Fuller (2004, p. 67), efficient knowledge application requires
skills of companies to integrate different knowledge types, and skills for utilizing knowledge
efficiently. Furthermore, Grant and Baden-Fuller (2004, p. 67) state that knowledge can be
integrated efficiently through methods such as direction and routine in which direction can be
related to a cost-efficient communication method to convert specialized knowledge into rules,
operating procedures and directives. Whereas organizational routines are related to
complicated coordination patterns in which experts integrate them into the development of
services and products (Grant & Baden-Fuller, 2004, p. 68). Moreover, Grant and Baden-Fuller
(2004, p. 70) point out that strategic alliances can enhance the utilization of knowledge through
diversifying into additional products and services.
Indradewa et al. (2015, p. 338) point out that organizations from developing countries who form
strategic alliances with other organizations from developing countries may collectively profit
through access to technology, knowledge, and experience to increase research and
development competencies. Thus, Indradewa et al. (2015, p. 340) state that development of
new products refers to exchange of resources by collaborations between organizations
Accordingly, Figure 4, regarding the knowledge-based view, exemplifies the knowledge
management process to manage collectively generated resources from a strategic alliance for
generating value (Indradewa et al., 2015, p. 343).
Figure 4 Framework of knowledge management (Indradewa et al. 2015, p. 345)
According to the results in their qualitative study, Indradewa et al. (2015, p. 346) have observed
that potential strategic alliance partners might be selected due to knowledge-based factors
such as competencies, capabilities, experiences, and expertise. Furthermore, Indradewa et al.
(2015, p. 348) point out that after determining adequate alliance partners, knowledge
management systems might be applied by supporting development, exchange, and application
of knowledge to identify and leverage knowledge for enhancing innovativeness of products.
Moreover, Indradewa et al. (2015, p. 348) emphasise that through knowledge generation in
20
strategic alliances, companies can develop technologies to increase competitiveness from its
innovation. However, Indradewa et a. (2015, p. 348) suggest that newly generated knowledge
and technologies should be carefully protected to prevent possible imitation from other
organizations for maintaining a possible competitive advantage.
Basically, this subchapter aims to examine another perspective in order to explain the rationale
of companies to form strategic alliances in this master’s thesis. According to Meier (2011, p.
1), knowledge might be critical to enhance the innovation performance of products in strategic
alliances to increase competitiveness. Furthermore, Indradewa et al. (2015, p. 342) emphasise
that innovation performance of strategic alliances might correlate with knowledge acquisition
and development among alliance partners. Moreover, Indradewa et al. (2015, p. 343) state
that knowledge refers to an essential source for possible competitive advantages for
companies, which can be generated through a collaboration between companies.
Nevertheless, the next subchapter emphasises on the transaction cost theory for explaining
the rational of companies participating in strategic alliances.
2.2.4 Transaction cost theory
According to Williams (1981, p. 552), the decision of a company to develop technology
internally or to purchase it externally from another organization can be specified through
transaction costs. Furthermore, Russo and Cesarani (2017, p.2) state that in relation to the
transaction cost theory, transaction costs in strategic alliances can occur through:
• Bounded rationality
• Opportunistic behaviour
• Asset specificity
According to Williams (1981, p. 553), bounded rationality refers to behavioural assumptions
on which the analysis of transaction costs is based where human agents are supposed to be
subject to bounded rationality referring to a limitation in solving complex problems and in
handling information. Thus, Russo and Cesarani (2017, p. 2) emphasise that bounded
rationality refers to an inability to anticipate possible situations which might be caused through
environmental uncertainty and complexity. Furthermore, Williams (1981, p. 554) points out that
opportunistic behaviour is related to self-interest seeking with insidiousness, meaning that
alliance partners pursue personal interests at the expense others. Moreover, Russo and
Cesarani (2017, p. 2) state that investments transferred to support transactions refer to assets
specificity in which investments may not produce value outside of it. Hence, Penney and
Combs (2019, p. 4) argue that asset specificity can be characterized through the degree in
21
which investments are specialized to a transaction and which are not applicable again for
another use.
Consequently, Russo and Cesarani (2017, p. 2) point out that companies may form strategic
alliances for minimizing production and transaction costs assuming that alliance partners
behave cooperatively toward their common goals. However, Russo and Cesarani (2017, p. 2)
emphasise that in strategic alliances opportunistic behaviour from alliance partners can
emerge. In order to mitigate opportunistic behaviour of alliance partners, Russo and Cesarani
(2017, p. 2) argue that governance structures as equity joint ventures are useful by sharing
equity which refers to mutual hostage. However, according to Penney and Combs (2019, p.
4), strategic alliance partners from different nations, organizational purposes or industries
might contribute through various types of diversity leading to different relationships regarding
firm performance.
Concerning opportunistic behaviour and strategic alliances, Judge and Dooley (2006, p. 24)
highlight that efficiency in strategic alliances can be improved through governance
mechanisms. However, Judge and Dooley (2006, p. 26) state that the establishment of
strategic alliances can create a relational risk especially regarding the trustworthiness of
partners that may be caused by opportunistic behaviour and a performance risk through
collectively pursued strategic objectives that deviate from usual operations. The Figure 5 below
shows graphically how opportunistic behaviour can negatively affect the outcome of strategic
alliances related to governance mechanisms reducing transaction costs as mutual equity
investment, contractual safeguards and the trust of partners (Judge & Dooley, 2006, p. 27).
Figure 5 Framework of transaction costs theory (Judge & Dooley, 2006, p. 29)
22
According to Judge and Dooley (2006, p. 27), equity investment within a strategic alliance by
all partners can reduce opportunistic behaviour because moral hazard might exist, which can
in turn lead to an alignment of interests by all companies involved. Furthermore, Judge and
Dooley (2006, p. 27) state that contractual safeguards include clearly defined rules and goals
might reduce transaction costs and might increase overall alliances performance. Moreover,
Judge and Dooley (2006, p. 28) emphasise that a high level of trustworthiness among strategic
alliance partners can enhance the communication between alliance partners that might
increase the exchange of information, which can lead to positive impacts on the alliance
performance and to a reduced potential of opportunistic behaviour of strategic alliance
partners. In addition to the above-mentioned governance mechanisms, Judge and Dooley
(2006, p. 28) point out that the lifetime of strategic alliances and asset specificity can enhance
the outcomes of strategic alliances because a longer time period concerning the existence of
an alliance and non-recoverable investments may reduce opportunistic behaviour of strategic
alliance partners. Thus, Penney and Combs (2019, p. 7) argue that governance mechanisms
can increase the overall strategic alliance performance to efficiently manage resources.
Predominantly, this subchapter aims to examine another perspective in order to explain the
rationale of companies to form strategic alliances in this master’s thesis. According to Meier
(2011, p. 1), knowledge might be critical to enhance the innovation performance of products in
strategic alliances to increase competitiveness. Furthermore, Indradewa et al. (2015, p. 342)
emphasise that innovation performance of strategic alliances might correlate with knowledge
acquisition and development among alliance partners. Moreover, Indradewa et al. (2015, p.
343) state that knowledge refers to an essential source for possible competitive advantages
for companies, which can be generated through a collaboration between companies.
Nevertheless, the following subchapter aims to allocate information about the network
perspective of companies for explaining value creation in strategic alliances.
2.2.5 Network perspective
Regarding the network perspective, Gulati (1998, p. 295) emphasises that strategic alliances
are primarily two-sided exchanges between organizations. Furthermore, Gulati (1998, p. 295)
points out that outcomes of strategic alliances might be shaped through social networks in
which alliance partners are embedded. This subchapter examines the network perspective
concerning performance outcomes of strategic alliances, where according to Zaheer et al.
(2010, p. 62) the strength of ties between alliance partners within a network influence
performance outcome for participating companies. Moreover, Zaheer et al. (2010, p. 62) state
that the network perspective assumes that companies access resources by its networks. On
the contrary, Zaheer et al. (2010, p. 62) argue that economic perspectives view companies as
23
separate entities where resources are utilized for competing with other autonomous
companies, whereby different lenses appear in this master’s thesis.
According to Borgatti and Foster (2003, p. 992), a social network refers to a set of actors that
are connected by various ties and actors which are teams, persons, concepts or organizations
Furthermore, Borgatti and Foster (2003, p. 995) emphasise that networks between companies
can be characterized by repetitive exchanges among semi-autonomous companies that rely
on embedded social relationships and trust for reducing costs. Moreover, regarding the
network perspective, Zaheer et al. (2010, p. 62) state that the pattern and strength of ties
among organizations can significantly influence the behaviour of a company which might have
an influence on the overall performance. Thus, Zaher et al (2010, p. 62) argue that companies
strive to access competencies and resources by a network of interfirm linkages with other
companies.
Consequently, according to Powell (1990, p. 324), a strategic alliance might serve as an
adequate form of partnership between companies as it might be a quick repositioning which
can be more successful and might be a less cost intensive solution compared to a merger or
acquisition. Powell (1990, p. 324) states that regarding the network perspective, a strategic
alliance, in order to be sustainable and profitable, can be constructed through three striking
factors:
• Know-how
• Demand for speed
• Trust
Powell (1990, p. 324) state that know-how refers to an essential component concerning the
formation of strategic alliances enabled through an exchange of complementary resources
which in turn may lead to shared values for credible relationships. Hence, Powell (1990, p.
324) points out that exchange of valuable know-how in form of competencies, skills or
knowledge may support the develop common values. Furthermore, Powell (1990, p. 325)
emphasises that the demand for speed refers to intense technological competition and to
reduced costs and risks through strategic alliance partnerships. From this vantage point,
Powell (1990, p. 325) argues that associations and partnerships are less irreversible and more
effective than mergers and acquisition. The third critical component of a network, according to
Powell (1990, p. 326), trust, suggests that in a cooperative relationship such as in strategic
alliances, the participants should have a background that is ethically, ideologically,
24
professionally or geographically similar. For that reason, Powell (1990, p. 326) stresses that
trust can lead to a more sustainable network relationship between alliance partners.
Similarly, according to Gulati (1998, p. 295), the network perspective might correlate with
economic actions that can be affected by social circumstances in which each network member
is embedded. Thus, Gulati (1998, p. 297) state that embedded ties within social networks,
especially within a strategic alliance, can increase the exchange of information between
alliance partners which might increase the efficiency of companies that are entering it.
Consequently, Gulati (1998, p. 298) points out that five key issues can be identified:
• Formation of alliances
• Choice of governance structure
• Dynamic evolution of alliances
• Performance of alliances
• Performance consequences for companies entering alliances
Gulati (1998, p. 299) stresses that the formation of strategic alliances between companies may
be more likely between companies that share the largest interrelationship. Furthermore Gulati
(1998, p. 302) argues that when appropriation worries between partnering companies are high,
a strategic alliance might tend to form a more hierarchical governance structure to organize it.
Moreover, Gulati (1998, p. 305) emphasises that understanding distinctive dynamic
evolutionary paths of strategic alliances can help to manage ties better to enhance the alliance
performance which can be revealed through studies that uncover formal and informal alliance
processes. However, Gulati (1998, p. 307) highlights that performance of strategic alliances is
difficult to measure by financial outcomes because companies may reach its goals while others
could fail to reach them. Eventually, Gulati (1998, p. 310) claims that performance
consequences for companies within strategic alliances in which the partners have close ties
by a large amount of exchanged information and long-range contracts can result in higher
performance benefits participating companies
Complementarily, Zaheer et al. (2010, p. 64) emphasise that in order to explain the network
perspective concerning efficiency in strategic alliances, four terms can be identified:
• Networks as resource access
• Networks as source of trust
• Networks as source of power and control
• Networks signalling mechanisms
25
Regarding the network perspective, Zaheer et al. (2010, p. 65) point out that strategic alliances
are established as sources of resources in form of efficient information transfer that is
strengthened by strong network ties. As mentioned previously, trust is an important element
for strategic alliances to effectively reach determined goals and objectives. Hence, Zaheer et
al. (2010, p. 65) stress that trust in strategic alliances may reduce costs of transactions and
increases efficiency enabled through companies who are embedded in networks where
alliance partners are close to another. Furthermore, regarding to Zaheer et al. (2010, p. 65),
power and control of strategic alliance partners over a focal company can be increased through
the introduction of new strategic alliance partners into the network. Moreover, Zaheer et al.
(2010, p. 65f) highlight that networks can serve as a signalling mechanism to deduct the quality
of an actor from its relationship as for instance through a strategic alliance between
pharmaceutical companies that are established as a sign of quality for a company in the
biotechnology sector.
Generally, this subchapter emphasises on the network perspective of companies for explaining
performance outcomes of companies participating in strategic alliances, which is discussed
further in this master’s thesis. However, the next subchapter provides information concerning
the game theory in line with strategic alliances to explain creation and allocation of value in
strategic alliances.
2.2.6 Game theory
Strategic alliances are, according to Parkhe (1993, p. 794), voluntary collaborative
relationships between organizations involving uncertainty about the behaviour of alliance
partners which can lead to uncertainty. Furthermore, Parke (1993, p. 794) points out that self-
interest seeking of alliance partners might lead to mutual inefficiency in strategic alliances.
Moreover, Agarwal et al. (2010, p. 413) emphasise that companies engaged in strategic
alliances might face difficulties in reaching goals through the issue of cooperation and
competition between alliance partners. Nevertheless, Agarwal et al. (2010, p. 413) state that
executives in strategic alliances face risks arising through free riding or opportunistic behaviour
of alliance partners.
According to Parkhe (1993, p. 796), the incentive of strategic alliance partners to deceive might
arise by maximizing its own advantage at the expense of others. Thus, Parke (1993, p. 796)
stresses that such situations can create instability between strategic alliances partners. In
relation to collaborations between companies, the game theory has been applied by Parkhe
(1993). As mentioned in the subchapter ‘Definition’, a strategic alliance might be established,
regarding to Agarwal et al. (2010, p. 414), with the intention to reach benefits for all exchanging
26
partners through the creation of economic value. However, Agarwal et al. (2010, p. 414f)
emphasise that strategic alliance partners might have an incentive to be in competition with
the other partners to obtain the largest amount of economic value. However, McCarter et al.
(2011, p. 622) point out that social dilemmas can arise which refer to uncooperative behaviour
of alliance partners regarding their own benefit at the expense of the whole strategic alliance,
unless other alliance partners behave uncooperatively too whereby no one would benefit.
Consequently, Parkhe (1993, p. 796) points out that situations of social dilemmas can be
related to a game called prisoner’s dilemma. Regarding game theory, Parke (1993, p. 796f)
argues that a prisoner’s dilemma is a game where two participants are suspected of a crime
such as murder or another serious crime, where they are theoretically arrested and
incommunicado from each other need to decide whether to cooperate or to refuse to do so,
without any information about the other's decision. Furthermore, Parke (1993, p. 797)
highlights that if both refuse to cooperate, they might get a short sentence, which would be a
mutual cooperation payoff. Nevertheless, according to Parke (1993, p. 797), when one
prisoner refuses to cooperate and the other one cooperates to go free, the one who refuses to
cooperate would get long sentence. However, Parke (1993, p. 797) emphasises that instability
and uncertainty regarding the next move of alliance partners can lead to deliberate strategies
which might reshape the structure of a strategic alliance to establish conditions for sustainable
cooperation. Likewise, Parkhe (1993, p. 797) states that two structural dimensions explain why
strategic alliances might be established regarding cooperative strategies including:
• Pattern of payoffs
• Shadow of the future
Parke (1993, p. 797) stresses that companies are able to reduce behavioural uncertainties of
alliance partners and to strengthen robustness of a strategic alliance by valuing the importance
of each alliance partner. Hence, according to Parke (1993, p. 797f), pattern of payoffs can
affect the emergence and maintenance of a strategic alliance because each participant
expects a positive monetary outcome from the collaboration. In relation to the shadow of the
future, Parkhe (1993, p. 799) emphasises that the sustainability and profitability of a strategic
alliance might depend on the repetition of collective planning and the perception of future
outcome. Eventually, Parke (1993, p. 800) points out that strategic alliances should have a
perception of future outcome for maintaining the relationship in the long run.
Correspondingly, concerning social dilemmas in strategic alliances, McCarter et al. (2011, p.
623) provide a structural and a motivational approach for mitigating social uncertainty in
strategic alliances. The main intention of the structural approach is to increase the trust of
27
strategic alliance partners through monetary fines or through disseminating bad reputations of
partners that behave harmful for the collective (McCarter et al., 2011, p. 623). Furthermore,
McCarter et al. (2011, p. 624) argue that the motivational approach strives to enhance trust of
alliance partners through investing collectively for reducing the potential risk that a partner will
defect. Thus, McCarter et al. (2011, p. 624) have introduced a hybrid approach to reduce social
uncertainty in strategic alliances through collective real options. McCarter et al. (2011, p. 625)
state that collective real options can be defined as basic collective investments such as for a
pilot project. The following Figure 6 illustrates a conceptual model of collective real options
regarding the social dilemma of strategic alliance.
Figure 6 Collective real options approach to social alliance dilemma (McCarter et al. 2011, p. 628)
McCarter et al. (2011, p. 626) highlight that collective real options can enable a strategic
alliance to counteract social uncertainty for enabling relational small wins which are concrete
outcomes of a successful cooperation. Furthermore, McCarter et al. (2011, p. 626) stress that
relational small wins can demonstrate the viability and trustworthiness of strategic alliance
partners which can reduce environmental uncertainty. Thus, McCarter et al. (2011, p. 628)
state that a successful cooperation might increase the trust of strategic alliance partners and
might reduce social uncertainty when relational small wins can be created by collective real
options. Moreover, McCarter et al. (2011, p. 629) point out that reduced social uncertainty can
directly lead to decreased perceived vulnerability among strategic alliance partners which
might enhance the willingness of the alliance partners to contribute large-scale resources
toward strategic alliances. Nevertheless, according to McCarter et al. (2011, p. 630), a low
level of exposure, which refers to 10 percent risk taking of the total wealth of a strategic alliance
28
partner, can decrease trust among alliance partners. Eventually, McCarter et al. (2011, p. 631)
claim that missing information concerning reputation of alliance partners can lead to
inefficiency in strategic alliances.
Predominantly, regarding Agarwal et al. (2010, p. 414), an economics-based game theoretical
lens can be applied to explain success in strategic alliances, which is examined in this
subchapter of this master’s thesis. However, for explaining value creation and formation
reasons of strategic alliances, the following subchapter provides a comparison of the
theoretical foundations.
2.2.7 Comparison of the theoretical foundations
In order to explain the rationale of companies to engage in strategic alliances, Anand et al.
(2010, p. 1213f) point out that companies might strive to enhance existing products and to
develop new products through reinforced innovativeness enabled by strategic alliances.
Furthermore, according to the resource-based view, Anand et al. (2010, p.1214) state that
existing valuable resources of companies may influence the formation and governance
structure of strategic alliances. According to Agarwal et al. (2010, p. 414), the game theoretical
perspective of strategic alliances argues that companies might join strategic alliances to create
value for increasing competitiveness. Hence, in order to explain how companies can reach
possible competitive advantages by engaging in strategic alliances, Wassmer and Dussage
(2011, p. 47) emphasise that accessing and developing specific resources might be critical for
creating value in strategic alliances. The following Table 2 in this master’s thesis provides a
comparison of various theoretical foundations in relation to strategic alliances for explaining
the rationale and success of strategic alliances by different angles.
Strategic
Alliance
Resource-
based view
Dynamic
capability
approach
Knowledge-
based view
Transaction
cost theory
Network
theory
Game
theory
Formation
reasons
Access,
retain and
develop
ancillary
resources
Recreate,
improve, and
integrate
acquired
knowledge
Exploration
and
exploitation of
knowledge
Reduction of
production
and
transaction
costs
Access to
know-how
and
exchange of
expertise
Reduction of
instability to
enable
resource
sharing
29
Strategic
Alliance
Resource-
based view
Dynamic
capability
approach
Knowledge-
based view
Transaction
cost theory
Network
theory
Game
theory
Success
factors
Governance
mechanism
and process
control
Exchange of
knowledge
and creation
of ancillary
capabilities
Specialization
in areas of
knowledge
Governance
mechanism,
equity
sharing and
contracts
Building
strong ties
and long-
term
contracts
Collective
real options
and financial
risk taking
Possible
outcomes
Development
of new
products,
services, or
know-how
New
technologies
or products
that are
unique
Value
creation
through
specific
knowledge
Cost
efficiency
and long-
term
commitment
Cost
efficient
exchange of
knowledge
Increased
trust between
partners and
long-term
relationship
Potential
risks
Conflict of
interest,
property
rights and
imitation
Risks of
imitation,
competition,
and property
rights
Ownership
and decision-
making
issues and
imitation risk
Bounded
rationality
and
opportunistic
behaviour
Power and
control of
network and
lack of trust
Opportunism,
social
dilemmas,
and alliance
instability
Table 2 Comparison of the theoretical foundations
Table 2 above outlines the differences and similarities of the theoretical foundations related to
the establishment of strategic alliances in this master’s thesis. Despite that these theoretical
foundations seem to be distinct and independently from each other, they are indeed to a certain
degree linked to one another so that they are built upon another or that they complement each
other. Therefore, Das and Teng (2000) for example, examine strategic alliances concerning
the occupation of valuable resources which has its origin within the resource-based view and
was then related to the dynamic capability approach from Lin & Wu (2014, p. 407f).
Furthermore, the researchers Lin and Wu (2014) state that the dynamic capability approach in
an extension of the resource-based view to examine possible influences caused through
dynamic markets. Moreover, dynamic capability approach stresses the importance of dynamic
capabilities to integrate and reconstruct resources in fast-changing and dynamic environments
to clarify the competitiveness of a company.
In general, this subchapter intends to provide a theoretical framework for the following
subchapters. Furthermore, this subchapter aims to provide meaningful understanding of
strategic alliances concerning competitiveness, where Lin and Wu (2014, p. 407) claim that
30
companies can increase competitiveness by engaging in strategic alliances related to the
accumulation of specific resources. Nevertheless, the next subchapters highlight distinct
motives of companies to engage in strategic alliances by considering the theoretical
foundations.
2.3 Motives for strategic alliances
In relation to the above-mentioned theoretical foundations of strategic alliances, this
subchapter aims to explain various motives of companies to form strategic alliances. Hence,
Todeva and Knoke (2005, p. 127f) state that a company might join a strategic alliance for
different reasons such as enhancing its productive capacities, reducing uncertainties regarding
the external environment and internal structures, gaining competitive advantage for increased
profits or increasing the market share. Furthermore, Todeva and Knoke (2005, p. 128) point
out that companies chose specific types of strategic alliances not only for reaching greater
market control, but also to enable better operational flexibility for increasing market share.
Moreover, Sompong et al. (2014, p. 519) emphasise that due to the participation in strategic
alliances, a company might be able to react to new technological advances through the
establishment of new innovative products and services which can lead to increased
competitiveness.
According to Varadarajan and Cunningham (1995, p. 282), forming strategic alliances may
contain accessing competencies and resources for reaching collective goals. Consequently,
Varadarajan and Cunningham (1995, p. 285f) point out that a company might have various
types of motives to form or join a strategic alliance such as to:
• Enter new markets
• Develop new products
• Reduce potential threat of future competition
• Acquire new resources
Varadarajan and Cunningham (1995, p. 285) state that a company might strive to establish a
strategic alliance with other companies to reduce economic risks of new market entry, which
can be enabled through access to complementary resources and competencies. Furthermore,
Varadarajan and Cunningham (1995, p. 285f) note that companies, in order to protect
competitive positions from future competitors in markets, may joint strategic alliances for
extending product lines by collective product development. To reduce a potential threat of
future competition, Varadarajan and Cunningham (1995, p. 286) emphasise that a company
can establish a strategic alliance to build market entry barriers trough economies of scale.
31
Moreover, Varadarajan and Cunningham (1995, p. 286) highlight that companies participate
in strategic alliances with the aim of inter-organizational learning. Eventually, regarding the
knowledge-based view, Varadarajan and Cunningham (1995, p. 286) argue that companies
engage in strategic alliances for investing in R&D to establish new technologies, services, or
products by accessing resources.
Similarly, Zineldin and Dodourova (2005, p. 461) state that motives to establish strategic
alliances can be explained from various theoretical foundations as the transaction cost theory,
resource-based view, dynamic capability approach or the knowledge-based view. Thus, Chen
et al. (2008, p. 451) emphasise that predominant intentions for companies to found strategic
alliances may include intentions like share development costs, enhance internal technological
development, strengthen the competitiveness and to support the inter-firm learning process
(Chen et al., 2008, p. 451). Consequently, Zineldin and Dodourova (2005, p. 462) have
categorized the motives for companies to form a strategic alliance into four categories shown
in the following Figure 7 including financial, strategic, technological, and managerial motives.
Figure 7 Strategic alliance formation motives (Zineldin & Dodourova, 2005, p. 462)
Financial motives
One of the main intentions of companies forming strategic alliances, according to Chen et al.
(2008, p. 451), might be to share and reduce costs that are required to search for information,
reduce costs and risks of R&D activities, and to cooperate with governmental organizations
concerning tax policy. Thus, Todeva and Knoke (2005, p. 130) argue that government
interventions may provide possibilities and restrictions regarding the establishment of strategic
32
alliances caused by tax incentives and international trade regimes through foreign
governments. Furthermore, Zineldin & Dodourova (2005, p. 462) stress that financial motives
can include collective investments in manufacturing facilities, a reduction of resources for
developing new products and moderate supply prices. Moreover, according to Sompong et al.
(2014, p. 521), the main intention concerning financial motives of forming strategic alliances
might be to generate economies of scale in which companies may expect to invest less money
than they may get in return.
Strategic motives
Todeva and Knoke (2005, p. 131) state that due to increased competition in global dynamic
business environments and the emergence of specific product markets, companies might
compete to gain a greater market share and might cooperate with other companies to achieve
possible strategic advantages. Furthermore, Zineldin and Dodourova (2005, p. 462) point out
that strategic motives of companies to join strategic alliances refer to establishing or protecting
competitive positions in markets enabled by achieving core competencies. Hence, according
to Chen et al. (2008, p. 451), companies tend to form strategic alliances concerning strategic
objectives as increasing market share, preventing fierce competition from strong competitors,
decreasing time to develop technologies and products for a new market entry, and reducing
fluctuation of employees. Moreover, Sompong et al. (2014, p. 521) emphasise that companies
aim to protect the current value of their competitive competencies and resources in which they
might be obliged to adjust capabilities to follow the market demand which can be enabled much
faster through strategic alliances.
Technological motives
In order to react to globalization forces such as increased global competitive pressures,
Todeva and Knoke (2005, p. 132) argue that through fast technological changes and shorter
product life cycles, a company may seek to cooperate with other companies to collectively
develop new technologies. Furthermore, Zineldin and Dodourova (2005, p. 462) point out that
companies strive to join strategic alliances regarding technological motives by collectively
exchanging technological knowledge for establishing new services and products with the aim
of creating value. Hence, Chen et al. (2008, p. 452) emphasise that gaining specific knowledge
and technology through the communication and exchange of technological information and
know-how between strategic alliance partners can reduce time and costs to establish a new
technology. Eventually, according to Sompong et al. (2014, p. 521), specific know-how can
include a highly educated workforce, specific skills and competencies of individuals and
working groups which might be engineers, technical staff, and qualified scientists.
33
Managerial motives
Todeva and Knoke (2005, p. 131) stress that diversity of prospective alliance partners related
to tactical and visible assets, types of ownership, product ranges, market shares and
collaborative histories might affect the tendency of companies to develop or join a strategic
alliance. Accordingly, Zineldin and Dodourova (2005, p. 462) state that another category of
potential motives for companies to form a strategic alliance can include factors as an enhanced
reputation or an increased managerial diversity. Moreover, Todeva and Knoke (2005, p. 135)
note that a collaboration between companies that is established by strong ties between the
partners can serve as an efficient mechanism for enhancing corporate confidence and can
increase the awareness of alliance partners of reputational damages that might arise through
opportunistic behaviour. Nevertheless, Sompong et al. (2014, p. 522) different organizational
cultures and management systems can bear issues concerning varying goals and objectives
which can lead to inefficiency during the collaboration between companies.
Basically, this subchapter intents to explain the rationale of companies to form strategic
alliances, whereby the reader should understand the intentions with which companies engage
in strategic alliances. However, the next subchapter examines the alliance formation process
where various governance structures can be applied. Hence, the alliance formation process
including different governance structures should provide readers with a basic comprehension
of competitiveness through strategic alliances.
2.4 Strategic alliance formation process
In order to explain the formation and performance outcomes of strategic alliances, this
subchapter aims to illustrate the different stages that might arise when companies establish
strategic alliances. Relating to the theoretical foundations of strategic alliances, Lin and Darnall
(2015, p. 550) point out that the appeal of companies to form strategic alliances can be
explained by resource-based and institutional theories. Hence, Lin and Darnall (2015, p. 550)
emphasise that differing intentions of companies to engage in strategic alliances may lead to
essential distinctions concerning structural dimensions. Furthermore, Lin and Darnall (2015, p.
550) argue that during the formation process in strategic alliance, structural dimensions as
alliance partner relations and diversity, organizational learning, and governance structure
might affect outcomes of strategic alliances as examined in chapter 5 in this master’s thesis.
According to Mitsuhashi (2002, p. 112), companies can apply a passive or a proactive
approach to form a strategic alliance. Regarding the passive approach, Mitsuhashi (2002, p.
112) emphasises that the focal company receives emails, phone calls and correspondence
34
from prospective alliance partners in which other companies are expressing collaboration
interests. Concerning the proactive approach, Mitsuhashi (2002, p. 112) stresses that the focal
company identifies and approaches potential partners for a strategic alliance. Furthermore,
Mitsuhashi (2002, p. 112) states that companies might apply the proactive approach to identify
potential future strategic alliance partners with the intention to systematically utilize the
collaboration for reaching strategic goals and objectives. The proactive strategic alliance
formation process, illustrated in the following Figure 8, consists of the five following stages:
defining alliance opportunities, identifying prospective partners, making contracts, due
diligence process and making deals (Mitsuhashi, 2002, p. 112).
Figure 8 Strategic alliance formation process (Mitsuhashi, 2002, p. 113)
Firstly, Mitsuhashi (2002, p. 112) highlights that a company might start defining possible
strategic alliance benefits that can be gained and determine requirements for potential partners
based on their strategic direction and current technical weaknesses and strengths. After
defining possible strategic alliance opportunities, Mitsuhashi (2002, p. 112f) argues that
potential partners that fit the desired prerequisites are identified. Furthermore, Mitsuhashi
(2002, p. 113) states that after identifying possible future partners that meet the prerequisites,
the next step in the strategic alliance formation process is to negotiate initial contracts with
them. After the identification of adequate alliance partners, Mitsuhashi (2002, p. 113) points
out that identified partners and the focal company start with the due diligence process in which
35
they start to exchange information in confidence regarding non-disclosure agreements that are
signed. Moreover, during the due diligence process, Mitsuhashi (2002, p. 113) claims that the
focal company might execute internal research and internal meetings for predicting the value
of the potential strategic alliances where afterwards the compulsory terms are determined.
Eventually, Mitsuhashi (2002, p. 113) emphasise that after the due diligence process, the focal
company and the potential strategic alliance members will discuss the terms of their contract.
Correspondingly, Nielson (2007, p. 339) emphasises that unique characteristics of strategic
alliance partners may influence the alliance formation process. Furthermore, Nielson (2007, p.
339) stresses that forecasting possible benefits by collaborating with alliance partners might
influence the formation process of strategic alliances. Thus, according to Nielson (2007, p.
340), factors which may affect the alliance formation between companies can be distinguished
into pre-alliance and post-alliance formation factors, exemplified in Table 3 below.
Pre-alliance formation factors Post-alliance formation factors
Prior experience with partners Collaborative know-how
Reputation of partners Complementarity
Country risk Cultural distance
Table 3 Influencing strategic alliance formation factors based on Nielson (2007, p. 340)
Nielson (2007, p. 340) states that pre-alliance formation factors include prior experiences with
possible strategic alliance partners, reputation of prospective strategic alliance partners, and
risks in relation to the country where potential strategic alliance partners are operating.
Furthermore, Nielson (2007, p. 341) emphasises the willingness to share resources during a
long-term cooperation can be positively linked to prior experiences from a company with a
partner and might reduce possible conflicts between strategic alliance partners. Thus, Nielson
(2007, p. 341) highlights that a lack of prior experience with a prospective partner might force
the focal company of a strategic alliance to investigate if the company is credible and if the
reputation is positive, which can be positively related to strategic alliance. Moreover, Nielson
(2007, p. 342) stresses that the risk of a country where a prospective strategic alliance partner
operates must be investigated thoroughly and this investigation includes understanding if it is
an impartial and comprehensible legal system for protecting individual rights and property,
stable public institutions, and government policies which promote open markets.
In relation to post-alliance factors, Nielson (2007, p. 343) argues that strategic alliance
formation can be referred to collaborative know-how and the cultural distance of prospective
strategic alliance partners. Collaborative know-how from prior strategic alliances might help to
36
develop collaborative ties and can assist in adopting accurate mechanisms to accumulate and
transfer knowledge within a strategic alliance. Furthermore, Nielson (2007, p. 345) claims that
a complementarity of resources from prospective strategic alliance partners concerning
overlapping knowledge and competencies can influence the formation process and might
enable a more efficient transfer of knowledge through a knowledge base in a similar area.
However, Nielson (2007, p. 346) points out that cultural differences of prospective strategic
alliance partners can cause cultural misunderstandings that might reduce the flow of
information, which in turn can increase the possibility of inefficiency within a strategic alliance.
Predominantly, the provided information in this subchapter concerning the alliance formation
process intents to allocate a basic understanding for the next subchapter. Nevertheless, the
next subchapter emphasises on governance structures of strategic alliances for providing a
comprehension of alliance success and failure.
2.5 Strategic alliance governance structures
Todeva and Knoke (2005, p. 123) claim that business executives should be able to understand
dynamic and development of strategic alliances for determining which factors are crucial for
successful alliance outcomes. Furthermore, Todeva and Knoke (2005, p. 124) emphasise that
issues as trust and knowledge transfer between strategic alliance partners might be crucial for
successful alliance outcomes. Hence, Todeva and Knoke (2005, p. 124) argue that concerning
collective defined goals of strategic alliances, the most suitable type of governance structure
should be applied for reaching the goals. In relation to the in the previous subchapter ‘Stages
of strategic alliance formation process’ in which the decision to select a specific type of contract
or governance type was mentioned, this subchapter aims to classify the different strategic
alliance governance forms.
According to Todeva and Knoke (2005, p. 124), when companies aim to enhance
innovativeness for increasing competitiveness through strategic alliances, several types of
governance structures might be applied. Therefore, Culpan (2008, p. 98) argues that the
structural choice of strategic alliances is primarily divided into equity and non-equity strategic
alliances as illustrated in Figure 9 below.
37
Figure 9 Strategic alliance governance types (Culpan, 2008, p.99)
Culpan (2008, p. 98) states that equity alliances can be referred to joint ventures and equity
participation in which joint ventures can be described as two or more companies that form a
new business entity through the allocation of equity into the new business venture.
Furthermore, (Culpan, 2008, p. 98f) claims that equity participation refers to a company that
buys substantial shares of another company to build a tie between the target companies and
the investor. At the same time, Culpan (2008, p. 99) stresses that non-equity alliances can
include inter-firm partnerships without an investment of equity including licensing, franchising,
joint marketing, research and development agreement, network organization and joint
production which is not exclusive. Eventually, Culpan (2008, p. 99) highlights that non-equity
alliances do not require equity investment, but these types of strategic alliances might require
the commitment of alliance partners to share intangible and tangible resources for gaining
possible collective benefits through the cooperation.
Furthermore, Teng and Das (2008, p. 726) note that strategic alliances might come about in a
diversity of governance structures which can contain for instance extended supplier-buyer
partnerships, code-sharing in the airline industry, joint ventures, joint bidding or minority equity
alliances. Thus, Teng and Das (2008, p. 727) suggest a different approach of dividing
governance structure types and emphasize that the governance structure of a strategic
alliances can be categorized as:
• Joint ventures
• Minority equity alliances
• Contractual alliances
38
Joint ventures
Teng and Das (2008, p. 727) point out that joint ventures may be the most integrative
governance type of strategic alliances because a new entity is required which connects
partnering companies. Accordingly, Uddin and Akhter (2011, p. 45) state that the governance
structure of companies which form together a legally independent company and share their
collaborative resources with the aim of gaining possible competitive advantages in the market
can be referred to a joint venture, which is one type of governance structures of a strategic
alliance. Furthermore, Uddin and Akhter (2011, p. 46) emphasize that through the government
form of a joint venture, a strategic alliance can enhance the exchange of resources because it
might assess important know-how where companies may be able to enter new markets.
Moreover, according to Estelyiova (2012, p. 175), a joint venture may be governed on the
strategic level through a board of directors governed by members from all partnering
companies within a strategic alliance.
Minority equity alliances
Uddin and Akhter (2011, p. 46) emphasise that when a company occupies shares of a newly
generated company through contributing resources with the aim of reaching possible
competitive advantages, a minority strategic alliance is the result in which the percentage of
the ownership may not be equally split. According to Estelyiova (2012, p. 174), the hierarchical
control of an equity alliance can be equivalent to increased control when the equity ownership
leads to greater voting power for a participant. Hence, Estelyiova (2012, p. 174) argues that a
minority equity strategic alliance can have a relatively low rate of strategic flexibility as it
operates without the creation of a join organization and administrative structure Nevertheless,
Globerman and Nielson (2017, p. 451) highlight that equity participation can also create a
governance structure in which the investing companies may be able to monitor the strategic
alliance activities of the board of directors.
Contractual alliances
According to Uddin and Akhter (2011, p. 46), by ensuring a possible benefit for two or more
companies, non-equity alliances can be generated through a contract in which no equity shares
are used. Furthermore, Uddin and Akhter (2011, p. 46) state that the implementation process
of a non-equity strategic alliance can be relatively easy because less experience than in other
governance forms might be required due to a relative low level of commitment and formality.
Accordingly, Estelyiova (2012, p. 174) argues that a contractual strategic alliance in which the
partnering companies work together directly from their own organization without sharing equity
or union ownership can be defined as contractual or non-equity alliances. Moreover, Estelyiova
39
(2012, p. 174) stresses that a non-equity alliance can be a characterized through the flexibility
and sincerity of contracts which allows a company to negotiate the required conditions and
terms between all strategic alliance participants.
Additionally, Das and Teng (1998, p. 497) point out that the variety of strategic alliance
governance structures might differ concerning control, confidence, and trust level in relation to
each strategic alliance governance form. In order to examine competitiveness of strategic
alliances, this master’s thesis exemplifies and compares distinct governance structures. Table
4 illustrates three different governance forms as joint ventures (JV), minority equity alliances
and non-equity alliances concerning their relationship to four different dimensions as object of
control, type of control, manifestation of trust and requisite of confidence level (Das & Teng,
1998, p. 497).
Joint ventures Minority equity
alliances
Non-equity alliances
Object of control JV and partner Partner Partner
Type of control Hierarchical control
and ownership control
Ownership control Contractual control
Manifestation of
trust
Delegation and JV
autonomy
Using equity share as a
distribution mechanism
Contractual flexibility
Requisite
confidence level
High Moderate Low
Table 4 Control, trust and confidence level in different alliance forms based on Das and Teng (1998, p. 498)
Das and Teng (1998, p. 497) emphasise that the object of control in JV covers the joint venture
itself and partnering companies that are involved because JV operate independently from their
parent companies in which the parent companies take over the control. Whereas minority
equity and non-equity alliances, according to Das and Teng (1998, p. 497f) are formed without
an establishment of separate entities where just a contractual and ownership control is applied
to prevent opportunistic behaviour of alliance. Furthermore, Das and Teng (1998, p. 498) argue
that the type of control that might be applied in JV can include hierarchical and ownership
control, which might consist of meetings, policies, staffing and reporting structure. Minority
equity alliances may only require ownership control because no separate entity exists, and
non-equity alliances such as licensing agreements are contract-based which require
contractual control. Moreover, Das and Teng (1998, p. 499) state that trust in JV can be
established to improve delegation and autonomy. Due to the use of equity share. However, in
40
non-equity alliances, Das and Teng (1998, p. 499) claim that trust among strategic alliance
partners might be manifested in contractual flexibility for responding effectively to changes that
can emerge in the business environment.
Mainly, this chapter aims to provide the reader comprehensive information about the rationale
of companies to engage in strategic alliances in relation to theoretical foundations. However,
the next chapter deals with the management of global strategic alliances for explaining success
and failure through a cooperation between companies.
3. Managing national and global strategic alliances
The previous chapter ‘Definition and process of strategic alliances’ analysed various
definitions, theoretical foundations and the process of strategic alliances including the different
motives, governance forms and stages which enables further discussion. This master’s thesis
examines the management of strategic alliances for explaining success and failure of strategic
alliance which is discussed in chapter 5. The following chapter discusses the management of
national and global strategic alliances including the partner selection process, critical success
factors, challenges of strategic alliances in global dynamic markets. According to Hitt et al.
(2016, p. 9), due to an increasing economic interdependence among countries and their
companies which might be reflected through the flow of products, knowledge and financial
capital across country boarders, globalization is emerging. Hence, Lassere (2017, p. 3) claims
that globalization refers to a process where products, people, money, and information is moved
without hindrance across borders.
Consequently, Ungson and Wong (2014, p. 273) emphasis that companies may have an
increasing pressure to establish an international market presence which might be caused by
globalization and tougher competitive conditions in local and global markets. Furthermore,
Ungson and Wong (2014, p. 277) point out that participating in a global strategic alliance can
help a company develop new managerial skills to increase the competitiveness in global
dynamic markets. The following Table 5 states the most relevant scientific literature used in
this chapter concerning the management of national and global strategic alliances including
their key findings and the relevant journal ranking. The journal ranking is provided in the round
bracket corresponding to the journal name.
41
Authors, journal Title of research paper
Topic Key findings
Aggarwal et al.
(2012), Journal of
Banking and Finance
(A)
Gravity and culture in
foreign portfolio
investment
Challenges
in managing
strategic
alliances
Investigation of cultural and
physical distances between
countries regarding the effect on
global strategic alliances
Cummings &
Holmberg (2012),
Long Range
Planning (B)
Best-fit Alliance
Partners: The Use of
Critical Success Factors
in a Comprehensive
Partner Selection
Process
Critical
success
factors
Identification of risks during the
strategic alliance partner
selection concerning
performance, unequal
knowledge sharing, quality, and
competition
Dekker (2004),
Accounting
Organizations and
Society (A)
Control of inter-
organizational
relationships: evidence
on appropriation
concerns and
coordination
requirements
Challenges
in managing
strategic
alliances
Control mechanism for strategic
alliances to mitigate
opportunistic behaviour and
bounded rationality through
increasing trust in capabilities
and goodwill
Doherty (2009),
Journal of Business
Research (B)
Market and partner
selection processes in
international retail
franchising
Partner
selection for
national and
global
strategic
alliances
Conceptual framework for
strategic and opportunistic
market and partner selection
process in international retail
franchising
Doz & Hamel (1998),
Harvard Business
Press
Alliance Advantage: The
Art of Creating Value
Through Partnering
Global
strategic
alliances
Value realization of global
strategic alliances through:
• co-option
• cospecialized resources
• internalized learning
Kang et al. (2014),
International
Business Review (B)
A process leading to
strategic alliance
outcome: The case of IT
companies in China,
Japan and Korea
Challenges
in managing
strategic
alliances
Investigation of the relationship
from benefit and risk perception
to relational outcomes of
strategic alliances
42
Authors, journal Title of research paper
Topic Key findings
Kim & Parkhe
(2009), British
Journal of
Management (B)
Competing and
Cooperating Similarity in
Global Strategic
Alliances: an
Exploratory Examination
Critical
success
factors
Conceptual model based on
competing and cooperating
similarity in global strategic
alliances to determine strategic
alliance performance
Meirovich (2010),
Journal of
Management and
Organization (NR /
CEFAGE: D)
The impact of cultural
similarities and
differences on
performance in strategic
partnerships: An
integrative perspective
Critical
success
factors
Identification of organizational
culture types:
• Clan
• Adhocracy
• Hierarchy
• Market
Spralls et al. (2011),
Journal of Retailing
(A)
Extranet Use and
Building Relationship
Capital in Interfirm
Distribution Networks:
The Role of Extranet
Capability
Critical
success
factors
Development of an inter-firm
distribution network regarding
connectivity of information
through communication quality,
information exchange and trust
Wang et al. (2018),
Journal of Air
Transport
Management (NR /
CEFAGE: C)
A partner selection
approach for strategic
alliance in the global
aerospace and defense
industry.
Partner
selection for
national and
global
strategic
alliances
Illustration of a partner selection
approach for global strategic
alliances through three steps:
• Initializing data
• Prediction
• Decision-making
Table 5 Primary literature findings concerning strategic alliance management
3.1 Global strategic alliances
According to Ungson and Wong (2014, p. 277), companies that join strategic alliances tend to
form partnerships nationally, however, such partnerships can also arise in global markets.
Furthermore, Abdullah et al. (2015, p. 117) state that global strategic alliances refer to
collaborations between companies belonging to different countries where each partner might
add its competences in order to reach similar goals. Moreover, Lasserre (2017, p. 218)
emphasises that operating in an international context and the pressure of globalization may
trigger a company to establish or join a strategic alliance in a global context. Basically, Lasserre
(2017, p. 218) claims that in the global context, different types of strategic alliances can be
43
underlined which depends on the operating scope and on the objectives of a strategic alliance
which are:
• Global reach alliances
• Global leverage alliances
• Learning alliances
Lasserre (2017, p. 218) argues that global strategic alliances might be formed to establish
global market presence by collaborating with strategic partners that operate in the same
industry, with the aim of enhancing geographically reach through global reach alliances.
Furthermore, Lassere (2017, p. 218) points out that global leverage alliances can be applied
for developing new products, technologies, and services where each strategic alliance partner
contribute a specific set of resources and competencies. Moreover, according to Lassere
(2017, p. 218), the third type of global strategic alliances refers to a specific type of agreement
that might enable the exchange of unique knowledge for developing mutually innovative
products, processes or services such as between pharmaceutical and biotech companies.
Consequently, Lasserre (2017, p. 218) stresses that the establishment of global strategic
alliances may have the predominant objective to refine the global competitive capabilities
enabled through global leverage alliances or through a global reach alliance. In contrast,
Lasserre (2017, p. 218) emphasises that local strategic alliances might have the main objective
for a company to gain access to new resources in a specific country through a resource-based
country alliance or to penetrate a local market through a market entry alliance. Hence, Lasserre
(2017, p. 218) highlights that global strategic alliances might be more complicated concerning
their economic and strategic scope than local strategic alliances. Eventually, Lassere (2017,
p. 218) claims that complexity of global strategic alliances might refer to distinct market
mechanisms, legal requirements, and competitive conditions in foreign markets.
Correspondingly, Doz and Hamel (1998, p. 36) claim that if a company aims to concentrate its
operation globally, it might seek for global opportunities as to form a strategic alliance to
increase global market presence, develop experiences about unfamiliar markets in order to
get an insider perspective and to acquire specific skills in another geographic location.
Furthermore, Abdullah et al. (2015, p. 118) emphasise that value creation in global strategic
alliances may refer to benefits resulting from improved productivity, reduced costs and risks,
organizational learning, knowledge transfer and increased profitability. Hence, according to
Doz and Hamel (1998, p. 37), the realization of added value may be essential for companies
to participate in global strategic alliances, where three distinct reasons for creating value are
identified and exemplified in Figure 10:
44
• Gaining competitive strength through co-option
• Leveraging co-specialized resources
• Gaining competence through internalized learning
Figure 10 Logic of global strategic alliance value creation (Doz & Hamel, 1998, p. 37)
Co-option
According to Doz and Hamel (1998, p. 40), by participating in a global strategic alliance in form
of a co-option, a company might strive to reach a global market leadership for seeking a first
mover advantage, which means being the first one to establish new innovative products and
services in the market. In addition to building a critical mass in a global market, Doz and Hamel
(1998, p. 40) state that the co-option alliance can enable a company to become a node in a
network, meaning it may be able to lead the development of new markets. Furthermore,
Lasserre (2017, p. 218) points out that strategic alliance partners global co-option alliances
mostly operate in the same industry and aim to increase the competitiveness in global markets
Tidd and Bessant (2018, p. 399) highlight that in strategic alliances through co-option,
companies may aim to build a critical mass through building strategic alliances with companies,
competitors or customers which possess complementary products, services or technologies to
increase the competitiveness in a global market. Moreover, Tidd and Bessant (2018, p. 399)
45
stress that co-option is more frequent where networks and the sale price play an important role
such as in the aerospace and mobile industry in which for instance Airbus for the most part
established as a response to the dominance of Boeing. Another example for co-option
alliances, according to Tidd And Bessant (2018, p. 399), can be given with Rover and Honda
in which a market presence in Europe was developed to increase international reach.
Co-specialization
The second persuasive logic which can drive the creation of value through a global strategic
alliance, according to Doz and Hamel (1998, p. 45), can be defined as co-specialization.
Furthermore, Lasserre (2017, p. 219) argues co-specialization can be characterized through
the contribution of resources, competencies, or assets of each participating company. Hence,
Lasserre (2017, p. 219) claims that companies participating in such type of global strategic
alliance can acquire various co-specialized resources for developing innovative services and
products. Moreover, Tidd and Bessant (2018, p. 399) state that in a co-specialized global
strategic alliance, the participants might aim to put together their unique competencies for
generating an opportunity to enter new markets and to develop new services or products where
alliance partners are often from different industries. Nevertheless, Tidd and Bessant (2018, p.
400) argue that there can be a risk that a technology of a n alliance partner may become
redundant through a specialization, because in the early stages of an emerging market the
dominant technologies may be still uncertain and the relevant technologies might be defined
better in subsequent stages.
Internalized learning
Another compelling rational which may drive the value creation through a global strategic
alliance for accessing skills that are concentrated in other geographic locations, is termed as
learning alliances by Doz and Hamel (1998, p. 37). Furthermore, Doz and Hamel (1998, p. 38)
point out that global learning alliances might enable companies to internalize new skills which
may in turn support the creation of new competencies for increasing the competitiveness global
markets. According to Lasserre (2017, p. 218f), such global strategic alliances in which the
alliance partners aim to access specific resources refers to an agreement for transferring know-
how between the participants. Moreover, Lasserre (2017, p. 219) emphasise that the global
strategic alliance established between General Motors and Toyota can be an example of a
successful learning alliance. Lassere (2017, p. 219) claims that the main objective for General
Motors was to gain experience in lean manufacturing processes, where Toyota could gain
knowledge in operating in the unionized environment of North America.
46
Basically, the expounded information in this subchapter concerning globalization and
technological drivers, intents to provide an understanding of how global strategic alliances
emerge. Nevertheless, the next sections examine the partner selection process, success
factors and difficulties regarding the management of global strategic alliances. Hence, the
reader should obtain a basic comprehension of how global strategic alliance partners are
selected from companies.
3.2 Partner selection
After analysing the objectives, forms and potential value creation of global strategic alliances,
this subchapter deals with the partner selection process concerning global strategic alliances.
Dacin et al. (1997, p. 4) emphasise that the partner selection process in global strategic
alliances may require an examination of objectives and expectations from prospective partners
which might be cost end time intensive. Furthermore, Sah and Swaminathan (2008, p. 473)
point out that two or more potential alliance partners may be in a collective negotiation to enter
a global strategic alliance, but the final decision for collaborating with partners is usually
initiated by just one company. Cummings and Holmberg (2012, p.137) state that the right
selection of global strategic alliance partners is critical for the development of successful
strategic alliances.
According to Dacin et al. (1997, p. 5), companies might need to select partners for a cross-
border alliance which have suitable goals, subsidiary strategic orientations, adequate skills,
and motivation when operating in global dynamic markets. Furthermore, Dacin et al. (1997, p.
5) claim that the partner selection process in global strategic alliances might be difficult
because companies based in different countries may differ concerning partner selection
criteria. Accordingly, Dacin et al. (1997, p. 5) highlight that such a case can be illustrated
between General Motors from U.S. and Deawoo Motors from Korea in which the companies
faced different strategic goals and orientations which resulted in an incompatibility between
them. In relation to the partner selection in global strategic alliances, Dacin et al. (1997, p. 10f)
has provided the most frequent selection criteria used by Korean and U.S. executives which
they have investigated in their study:
• Korean executives: Technical expertise, industry attractiveness, special skills,
willingness to share expertise and capabilities for providing quality.
• U.S. executives: Financial assets, managerial capabilities, capabilities for providing
quality products and services, complementary of capabilities and unique competencies.
47
Dacin et al. (1997, p. 10f) point out that U.S. executives primarily placed their focus on the
financial strength of a potential strategic alliance partner, whereas the Korean executives
significantly placed their focus on the technical expertise of a potential strategic alliance partner
such as the accomplishment to establish new product or process technologies. Concerning
the top five criteria used by the different executives, Dacin et al. (1997, p. 11) state that only
the criterion of strategic alliance partners concerning capabilities to provide quality products
such as strong manufacturing facilities and low defect rates was applied by both sets of
executives. Hence, Dacin et al (1997, p.11) emphasise that U.S. executives selected strategic
alliance partners who are able to guide a company efficiently and might be interested in special
skills and abilities of a potential partner. On the contrary, Dacin et al (1997, p. 11) argue that
Korean executives were seeking partners which have technical expertise which their company
may not occupy, and they were more interested in partners who are willing to share this
technical expertise.
Corresponding research from Nielson (2003) underlines the decision-making criteria for global
strategic alliances. Thus, Nielson (2003) analysed data from a web survey of Danish
companies operating in global strategic alliances for exploring factors that encourage alliance
formation between companies. The research paper builds on strategic alliance partner
selection criteria containing prior international alliance experience, foreign alliance partner
nationality and motives for alliance formation (Nielson, 2003, p. 302). During the selection
process, Nielson (2003, p. 303) argues that prior experience through international collaboration
from focal companies may influence partner selection as companies tend to seek partners with
experiences regarding cross boarder governments.
Furthermore, Nielson (2003, p. 302) claims that the type of governance structure of global
strategic alliances might influence the criteria for selecting alliance partners. An example,
according to Nielson (2003, p. 304) can be related to equity joint ventures which generally
require substantial managerial time and financial investment. Furthermore, Nielson (2003, p.
305) stresses that an international strategic alliance formation involves the negotiation
between executive directors from different cultures and countries which can lead to cultural
differences, misunderstandings, knowledge transfer problems and poor performance.
Accordingly, Nielson (2003, p. 306) emphasises that companies may join strategic alliances
where partners occupy similar resources for complementing each other’s internal capabilities.
The following Table 6 illustrates partner selection criteria for Danish companies involved in
global strategic alliances.
48
Table 6 Partner selection criteria for international strategic alliances (Nielson, 2003, p. 306)
The corresponding Table 6 involves data from a study of Danish companies operating in
international strategic alliances with partnering companies from North America, Asia, Europe,
and South America (Nielson, 2003, p. 306). Hence, the importance of criteria for global
strategic alliance partner selection was measured with a scale from1 (no importance) to 7
(major importance) and illustrated through mean scores. Consequently, Nielson (2003, p. 309)
points out that trust between top management teams was top ranked (5.60) followed by
relatedness of partner business (5.26). The next frequently ranked criteria, according to
(Nielson, 2003, p. 309), was reputation (5.23), financial status (4.99) and size of a partner
(4.86), which excelled the midpoint measure. Furthermore, Nielson (2003, p. 309) stresses
that the degree of favourable experience in the past with a partner (4.79), access to marketing
and distribution systems (4.52), international partner experience (4.19) and experience in
technological application (3.97) also exceeds the midpoint measure. Thus, (Nielson, 2003, p.
309) argues that companies may depend international partners for accessing international
markets in which legitimacy and the level of trust of the partner can be of great significance.
Consequently, Doherty (2009) combines market and partner selection in international retail
market and distinguishes between strategic and opportunistic selection criteria. Hence,
Doherty (2009, p. 530) claims that opportunistic market and partner selection refers to an
approach in which the franchisor enters a market and a franchise agreement without any
detailed research. Furthermore, Doherty (2009, p. 530) states that the strategic market and
partner selection process, on the contrary, refers to an approach whereby franchisors
investigate explicitly before entering an international market with partners. The following Figure
11 illustrates the market and partner selection processes in international retail franchising
(Doherty, 2009, p. 530).
49
Figure 11 Conceptual framework of alliance partner and market selection (Doherty, 2009, p. 530)
Doherty (2009, p. 530) argues that if a company applies a strategic partner and market
selection approach, the first step might be the market screening regarding demographic criteria
such as population and social structure, and regarding economic criteria such as
unemployment, GDP (Gross domestic product) growth, currency fluctuations and inflation.
After successfully screening markets, Doherty (2009, p. 530) emphasises that some market
attractiveness factors, for instance the retail structure and regulation can affect the process
50
before a company can choose a market. The retail structure, according to Doherty (2009, p.
531), includes a review of the retail market concerning the retail environment, site location or
the potential price positioning of merchandise, competition and the presence of international
retailers to determine the final market selection. An additional factor regarding the market
attractiveness, according to Doherty (2009, p. 531), is the regulation of the retail market in
terms of trade relationships and import duties. After analysing the market attractiveness
factors, the market selection culmination can be achieved. Furthermore, Doherty (2009, p. 531)
states the strategic partner selection process includes the determination of partner
characteristics such as business know-how, financial stability, existence of chemistry between
the partners, local market knowledge and a shared understanding of the brand.
The process of market and partner selection, however, according to Doherty (2009, p. 531), if
an opportunistic partner selection approach is applied varies where primarily the strategic
alliance partner with the most meaningful financial strength is selected. Furthermore, Doherty
(2009, p. 531) stresses that opportunistic partner selection may involve sending out terms and
conditions of a contract for a prospective franchise including a business plan, where the
prospective partners can evaluate if a partnership might fit with their internal objectives or not.
The research paper of Doherty (2009, p. 533) provides insights in the market and partner
selection processes of UK based franchisors that operate internationally in the retail fashion
sector, but the conceptual framework can just be interpreted as an adoption of the perspective
of different investigated franchisors.
Complementarily, Wang et al. (2018) have provided a partner selection approach for global
strategic alliances based on a data envelopment analysis (DEA) in which performance of
alliance decision-making units (DMUs) where measured. The research paper includes
collected data from 35 stable companies that operate worldwide in the aerospace and defence
industry, and the company Airbus was chosen as the target company (Wang et al., 2018, p.
193). In order to measure the efficiency of the potential partnering companies, Wang et al.
(2018, p. 193) point out that four input variables as property plant and equipment, operating
expenses, long term investment and costs of goods sold can be considered. Furthermore,
Wang et al. (2018, p. 193) state that four output variables including net income, gross profit,
retained earnings and common stock were chosen to assist the DMUs to find the right strategic
alliance partner. The following Figure 12 exemplifies a partner selection approach that is
divided into three different stages: initialized data, prediction and decision-making (Wang et
al., 2018, p. 193).
51
Figure 12 Strategic alliance selection approach in the global aerospace industry (Wang et al., 2018, p. 193)
According to Wang et al. (2018, p. 192), the first stage starts with the collection of data, followed
by the selection of input and output factors. After selecting these factors, Wang et al. (2018, p.
192) stress that the prediction stage with the implementation of forecast work is implemented
in which the grey prediction model forecasts the business value for future years. Wang et al.
(2018, p. 192) claim that, for ensuring that forecasts are reliable, an accuracy test is deployed
when error rate excessive, input and output factors are redefined. Before making a final
decision, Wang et al. (2018, p. 192) emphasise that the DEA model is applied for measuring
the efficiency of multiple DMUs through the transformation of multiple inputs to outputs.
Furthermore, (Wang et al., 2018, p. 192f) state that a Pearson correlation test to examine the
correlation values between input and output factors is applied, if they are positive or not,
because when there is a negative coefficient, the factor must be removed. Eventually, Wang
et al. (2018, p. 193) highlight that the next step in the partner selection process is the analysis
before alliance which aims to investigate the rank of the target DMUs and compare them with
52
other ones, followed by the analysis after alliance and the detection of an adequate strategic
alliance partner to select final alliance partners.
In general, this subchapter intends to provide information on how companies which operate in
global dynamic business environments select strategic alliance partners for understanding
which factors in managing alliances are crucial. Therefore, the next subchapter points out
which factors are critical to efficiently manage global strategic alliances in relation to
competitiveness of alliance partners.
3.3 Critical success factors
Following the objectives and value creation in the subchapter ‘Global strategic alliances’, and
the described partner selection of global strategic alliances in the subchapter ‘Partner
selection’, the emphases of this subchapter is placed on critical success factors of global and
local strategic alliances. Thus, the emphasis in this master’s thesis is basically placed outputs
of strategic alliances to increase the competitiveness through innovation. However, Kanungo
(2015, p. 121) claims that a successful and sustainable cooperation might require more than
just an environment of honesty, trust, and harmony in which the employees and the
management strive to increase their overall performance. According to López-Duarte et al.
(2016, p. 512), strategic alliances in a global context might be influenced by the national culture
and cultural distance of the different strategic alliance partners, which may influence the
development and outcomes of alliances. Consequently, Kanungo (2015, p. 123) proposes four
critical success factors for global strategic alliances for reaching collective goals:
• Common culture orientation
• Mutual trust and commitment
• Open and interactive communication
• Collaborating with competitors
Common culture orientation
The first mentioned critical success factor, according to Kanungo (2015, p. 123), treats cultural
values and similarities of alliance partners in determining the formation of efficient global
strategic alliances as cultural compatibility which can positively influence alliance outcomes.
Furthermore, Kanungo (2015, p. 124) notes that cultural orientation can be a crucial factor to
effectively improve the synergy between successful global strategic alliance partners because
once the partners become more familiar with cultural response of each other, the created
synergy of the alliance can grow. Moreover, López-Duarte et al. (2016, p. 516) point out that
cultural differences can exacerbate the communication process, the encouragement of
53
cooperative behaviour, and the ability of the partners to generate and sustain trust within a
strategic alliance.
In addition to national culture, Meirovich (2010, p. 133) emphasises that organizational culture
might also affect performance of global strategic alliances. The following Table 7 identifies four
different organizational culture types: clan, hierarchy, adhocracy, and market.
Table 7 Typology of organizational cultures (Meirovich, 2010, p. 133)
According to Leisen et al. (2002, p. 205), characteristics of a clan culture include a leadership
style such as a mentor or a parental figure in which developing human resources and
commitment is seen as a strategic orientation. Furthermore, Leisen et al. (2002, p. 206) argue
that characteristics of an adhocracy culture are a leadership style such as innovator, risk taker
and entrepreneur in which strategic orientation emphasizes growth, new resources and
innovation. Thus, Meirovich (2010, p. 133) claims that the clan culture can be characterized by
loyalty, teamwork, participation, and cohesiveness, organizational moral and cohesiveness
which might be more important than financial objectives. Moreover, Meirovich (2010, p. 133)
argues that an adhocracy type of organizational culture emphasizes innovation, creativity, and
entrepreneurship. Correspondingly, Meirovich (2010, p. 133) states that the third proposed
type of an organizational culture, the market culture, can be referred to the search for new
markets and strategies for growing through risk taking and increased flexibility which can
increase the effectiveness of an organization. Eventually, Meirovich (2010, p. 134) points out
that the hierarchy culture emphasizes rules, regulations, and order within an organization, and
strives towards stability and accomplishment of clearly defined goals and objectives.
Additionally, Leisen et al. (2002, p. 206) stress that companies that have mechanistic
organizational cultures such as hierarchy and market encourage values of stability and control
in which a hierarchy culture can lead to greater market effectiveness and operational efficiency,
tend to focus on internal coordination Conversely, Leisen et al. (2002, p. 206) highlight that the
market culture has an external focus and might require greater importance on customer issues
from the employees. Furthermore, Leisen et al. (2002, p. 206) argue that organic organizational
54
processes such as adhocracy and clan cultures can lead to enhanced loyalty between
employees and increased flexibility for adapting to market changes and customer needs. Thus,
Meirovich (2010, p. 134) claim that a global strategic alliance between an organic company
that is specialized on R&D and a mechanistic manufacturing company can have an increased
opportunity to be efficient and sustainable if the companies have a similar external orientation.
Mutual trust and commitment
The next critical factor that can lead to success for a global strategic alliance might be trust
and commitment, and according to Kanungo (2015, p. 124), a consensus between the alliance
partners is crucial for maintaining trust and commitments because a consensus can lead to a
final decision. However, Wong et al. (2017, p. 823) emphasise that a global strategic alliance
which operates across cultural boundaries may have to overcome mistrust and
misunderstandings due to cultural varieties and a lack of familiarity which may increase the
transaction costs. Thus, Robson (2019, p. 138) argues that trust among global strategic
alliance partners might help to absorb and provide knowledge of alliance partners for reaching
collective defined goals.
Cullen et al. (2000, p. 223) state that a company should rigorously investigate all potential risks
and financial benefits of the relationship before they engage in a strategic alliance.
Consequently, according to Cullen et al. (2000, p. 229), the development of trust and
commitment in global strategic alliances might involve a sophisticated interaction between trust
and commitment. As an essential factor in a cooperative relationship, credibility trust initiates
the trust and commitment cycle, illustrated in Figure 13 (Cullen et al., 2000, p. 232).
Figure 13 Interplay of trust and commitment in global strategic alliances (Cullen et al., 2000, p. 232)
55
Cullen et al. (2000, p. 232) state that the anchor of a stable relationship between strategic
alliance partners starts with the credibility trust when delivering the contractual agreement by
the agreed date, quality and quantity forms the foundation. Furthermore, Cullen et al. (2000,
p. 232) argue that credibility trust can be defined as the confidence of a partner to fulfil the
obligations and promised contributions to a strategic alliance. Benevolent trust, according to
Cullen et al. (2000, p. 232), can be defined as the persuasion that strategic alliance partners
might operate in favour of the whole alliance and might arise simultaneously with credibility of
trust. Moreover, Cullen et al. (2000, p. 232) emphasise that after the development of trust,
commitment between strategic alliance partners might be essential to create a value
collectively where between attitudinal and calculative commitment can be distinguished. The
attitudinal commitment, in accordance with Cullen et al. (2000, p. 232), can be referred to a
more emotional commitment where partners might be willing to put some extra effort towards
the alliance. Whereas calculative commitment can be related to an opportunity of future
financial benefits for partners through engaging in a strategic alliance (Cullen et al., 2000, p.
232). Consequently, Cullen et al. (2000, p. 233f) claim that trust and commitment of one partner
can generate trust and commitment in another partner which can in turn lead increased
performance as gaining new technical knowledge or increased revenues.
Open and interactive communication
According to Agarwal et al. (2010, p. 419), communication among strategic alliance partners
can help to reduce the costs of coordination and might enable them to address some
management related issues which are caused though decision biases and bounded rationality.
Furthermore, Agarwal et al. (2010, p. 419) emphasise that communication among alliance
partners may lead to success by enabling exchange of information for strengthening causal
connections and actions between group outcomes and actions of individuals. Thus, Kanungo
(2015, p. 419) states that a critical factor for global strategic alliance success refers to open
and interactive communication because reaching the objectives of alliances might also depend
on transparency and openness of communication.
Accordingly, Kauser and Shaw (2004, p. 23) point out that ineffective communication can
generate conflicts between global strategic alliance partners and thus can decrease the
effectiveness of the alliance. Furthermore, Kauser and Shaw (2004, p. 23) claim that three
aspects concerning communication among alliance partners can be critical for success:
• Quality of information
• Information sharing
• Participation
56
Kauser and Shaw (2004, p. 23) argue that quality of information refers to the transmission of
information and may contain factors as timeliness, adequacy, credibility, and accuracy of
interchanged information. Furthermore, Kauser and Shaw (2004, p. 23) point out that high
quality of information provided can strengthen inter-organizational relationships which might in
turn increase the trust between alliance partners and can reduce misunderstandings.
Moreover, Kauser and Shaw (2004, p. 24) emphasise that efficient information sharing within
a global strategic alliance can increase the information value for the participants, reduce inter-
organizational conflicts and can be correlated increased satisfaction among the participants
though a high level of information. Hence, Kauser and Shaw (2004, p. 24) state that defining
collective goals and making decisions together may be essential for successful strategic
alliances, which refers to participation between alliance partners.
Congruent with the resource-based view, Spralls et al. (2011, p. 60) emphasise that the
network of relationships of a company can serve as an important source for creating valuable
resources through a firm’s network of relationships. Furthermore, Sambasivan et al. (2011, p.
549) point out that maintaining a collaborative relationship such as a global strategic alliance
might require a thorough relationship management in order to be sustainable and successful.
An effective and precise exchange of information can improve the market responsiveness and
operational effectiveness, however, according to Sambasivan (2011, p. 550), a vague
exchange of information can lead to ineffectiveness within a strategic alliance. Moreover,
Spralls et al. (2011, p. 59) state that extranet capability, defined as an extended intranet system
that is internet-based for communication with the intention to encourage the cooperation
among employees and strategic alliance partners, can be related to a group of organizations
that are socially and electronically interconnected.
Correspondingly, the following Figure 14 illustrates a model regarding the promotion of a
successful infer-firm distribution network that requires transparency and connectivity of
information, and a high level of relationship resources which can enable strategic alliance
partners to merge their resources for generating value effectively Spralls et al., 2011, p. 61).
57
Figure 14 Extranet capability model of inter-firm distribution network performance (Spralls et al., 2011, p. 61)
Spralls et al. (2011, p. 61) argue that quality of communication, information exchange and trust
can be referred as the fundament in the extranet capability model in which the quality of
communication can be related to information sharing which coordinated in time, appropriately
interpreted and rich in symbolic content. Furthermore, Spralls et al. (2011, p. 62) point out that
exchange of information might be important to reduce uncertainty of strategic alliance partners
through distributing key information content to the alliance partners. Moreover, Spralls et al.
(2011, p. 62) stress that trust within an inter-firm distribution network refers to the extent to
which strategic alliance partners might have confidence in the correctness and trustworthiness
of other members. Accordingly, Spralls et al. (2011, p. 63) claim that quality of communication,
exchange of information and trust positively affect outcomes of strategic alliances resulting
from inter-firm distribution networks. Eventually, Spralls et al. (2011, p. 60) highlight that
possible outcomes strategic alliances can be better responsiveness to changes in the business
environment, increased financial performance for realizing higher profits, superior efficiency
through cost reduction of inputs, increased effectiveness by initiatives to successfully achieve
the stated goals and enhanced innovativeness through increased openness to new ideas of
partners.
58
Collaborating with competitors
Regarding the game theory, Ritala (2012, p. 308) mentions that collaborating with competitors
can be associated to the logic that a company might use this strategy for increasing the market
share, which afterwards might be allocated equally. Nevertheless, Ritala (2012, p. 309)
emphasises that a company may have motives to establish or join a strategic alliance with
competitors such as integrating supplementary resources or enhancing the competitiveness
by a strategic alliance with competitors. Furthermore, according to Ritala (2012, 310),
companies that collaborate with competitors might increase competitiveness though increased
innovation and market performance, enabled through exchanging knowledge and allocating
costs.
Through collaborating with competitors, Kanungo (2015, p. 125) states that companies might
increase competitiveness in dynamic markets, which refers to a strategy termed coopetition.
Furthermore, through collaborating with competitors, Kanungo (2015, p. 126) claims that
various risks can arise such as a loss in organizational independency and decision-making.
Moreover, according to Kanungo (2015, p. 126), coopetition strategy can serve as an effective
approach to internalize and optimize the knowledge base of a company. Moreover, according
to Lascaux (2020, p. 2), trust should be a focal point in developing a reliable relationship
between competitors for successfully achieving the collaborative goals and objectives.
Kim and Parkhe (2009, p. 365) emphasize that performance outcomes of global strategic
alliances between competitors, exemplified in Figure 15, may be shaped through cooperating
and competing simultaneously where cooperating similarity might positively, and competing
similarity negatively influence alliance outcomes.
59
Figure 15 Global strategic alliance outcomes through coopetition (Kim & Parkhe, 2009, p. 365)
Kim and Parkhe (2009, p. 366) stress that global strategic alliances might strive to exploit a
complementarity of contributions, which can arise through a gap between already existing
capabilities and those specific ones a company needs to pursue its strategy. Furthermore, Kim
and Parkhe (2009, p. 366) point out that partners of a global strategic alliances with a high
level of complementary among each other can increase the trust between them. Nevertheless,
Kim and Parkhe (2009, p. 366) state that competing similarity in strategic capabilities between
global strategic alliance partners can erode the alliance outcomes. Moreover, Kim and Parkhe
(2009, p. 366f) argue that cooperating similarity and interfirm diversity through societal culture,
national context, corporate culture, and management practices may negatively impact the
outcomes of global strategic alliances. Accordingly, Kim and Parkhe (2009, p. 367) highlight
that similarity among these environmental and firm-specific factors might be elements for a
successful relationship and cooperation. Hence, Kim and Parkhe (2009, p. 367) claim that
when the cooperating similarity is low and the diversity is high, a company can undertake
relational effort initiatives such as mutual adaptation, cross-cultural training and
communication to improve the alliance outcomes.
Correspondingly, Ritala (2012, p. 308) stresses that companies may engage in strategic
alliances for minimizing costs and risks, regarding the transaction cost theory. Consequently,
60
Cummings and Holmberg (2012, p. 150) point out that there are different risks related to
strategic alliances that can lead to difficulties in collaborating with other companies which are:
• Performance risks
• Relational risks
• Unequally shared risks
• Emergent competition risks
• Quality risks
• Customer relationship risks
Cummings and Holmberg (2012, p. 150) state that performance risks can be related to
strategic alliances that may be established based on unrealistic objectives and performance
goals, which can lead to an alliance failure. Furthermore, Cummings and Holmberg (2012, p.
150) stress that relational risks can arise from an individual firm politics, costs of weak strategic
alliance communication and unanticipated time, which can be a result of strategic changes of
alliance partners. Moreover, Cummings and Holmberg (2012, p. 150) emphasise that
asymmetric knowledge acquisition, where alliance partners acquire resources of focal
companies without being bilateral refers to unequally shared risks. Thus, Cummings and
Holmberg (2012, p. 150) claim that unequally shared risks might lead to emergent competition
risks due to the threat of receiving a competitor. Nevertheless, Cummings and Holmberg
(2012, p. 150) argue that a lack of suitable quality controls such as insufficient training and
implementation strategies can lead to quality risks. Eventually, according to Cummings and
Holmberg (2012, p. 150), customer relationship risks can arise, when customer contacts and
customer service problem solutions are not carefully managed.
However, Das and Teng (1999, p. 56) emphasise that relational and performance risks might
arise during the strategic alliance process consisting of partner selection, alliance structuring,
alliance operation and alliance evaluation, which can in turn effect the overall alliance
performance. According to López-Duarte et al. (2016, p. 516), relational risks can be derived
from the uncertainty of the future behaviour of partners, which might be conditioned by national
cultural differences of managers who come from uncertainty avoidance and power distance
cultures that show a high level of perceptions of relational risk. Thus, Robson et al. (2019, p.
141) claim that implementing diligent management control for mitigating potential relational
risks during the alliance formation process can support the creation of resource compatibilities
for reaching goals in strategic alliances.
61
Accordingly, Das and Teng (1999, p. 57) propose a model that illustrates the management of
some key issues regarding relational and performance risks which can arise during the
different stages of strategic alliances and which might affect the effectiveness of the strategic
alliance performance, shown in Figure 16.
Figure 16 Management of risks during the strategic alliance process (Das and Teng, 1999, p. 57)
During the strategic alliance partner selection, Das and Teng (1999, p. 56) suggest that
strategic alliances between companies with a high degree of interfirm trust and
complementarity of resources tend to be more successful, where is essential to find a fit
between the partnering companies. Furthermore, Das and Teng (1999, p. 58) argue that when
companies during the strategic alliance process are negotiating the governance structure,
different above discussed forms are available depending on specific needs, where structural
flexibility and rigidity should be in equilibrium to perform effectively. After structuring and
establishing a strategic alliance, Das and Teng (1998, p. 58) emphasise that the risk of having
an ineffective cooperation can arise due to a lack of pursuing common interests and self-
interests leading to a weak strategic alliance performance. Eventually, Das and Teng (1998,
p. 59) claim that through evaluating performance of strategic alliances, alliance partners are
able to examine if objectives are reached, whereby alliance partners who follow short-term
relationships can bear risks concerning the sustainable existence of strategic alliances. Hence,
the information stated in this subchapter regarding critical success factors in managing global
62
strategic alliances aims to allocate an understanding of how value can be created through
strategic alliances.
3.4. Challenges in managing strategic alliances
Managing national and global strategic alliances successfully might bear some difficulties and
challenges, which are discussed in this subchapter. According to Owen and Yawson (2013, p.
3890) strategic alliances might have to overcome such difficulties as information costs, tax
regime, and cultural distance. Furthermore, Owen and Yawson (2013, p. 3891) state that
information costs can be a decision factor for a cross-border partner selection and can be
related to information asymmetry. Moreover, Owen and Yawson (2013, p. 3892) point out that
another factor that might bear difficulties in establishing and managing global strategic
alliances is the tax regime in a foreign country as tax rates can vary considerably. Thus, Owen
and Yawson (2013, p. 3893) argue that cultural distance can be related to another challenging
factor facing global strategic alliances as language, legal systems and religious beliefs can
influence the establishment of strategic alliances.
Kang et al. (2014, p. 1127) claim that globalization has been accelerating the competition
among companies forcing them to acquire resources and competencies to compete locally and
globally through forming a strategic alliance with other companies. However, according to
Kang et al. (2014, p. 1127), the failure rate of strategic alliances can be high which can lead to
uncompensated transfers of technology and information, involuntary potential revenue loss,
loss of reputation and operational difficulties. Hence, Kang et al. (2014, p. 1128) stress that
characteristics of strategic alliance objectives can vary between alliance partners regarding
managerial, technological, network or financial gains. Accordingly, Kang et al. (2014, p. 1128)
highlight that perceived benefits and risks when companies engage in strategic alliances can
affect the behavioural direction and the relational outcome of the alliance partners.
Consequently, Kang et al. (2014, p. 1130) propose an illustration of the relationships among
the benefit and risk perception in relation to the behavioural direction and the relational
outcome in strategic alliances as seen in Figure 17 below.
63
Figure 17 Relationships among benefit and risk perception (Kang, 2014, p. 1130)
Kang et al. (2014, p. 1128) argue that perceived benefits of companies engaging in strategic
alliances can involve various improvements such as increased innovativeness or resource
acquisition. However, Kang et al. (2014, p. 1128) state that the establishment of a strategic
alliance can bear risks to partnering companies such as the above-mentioned relational
performance and technological risks because strategic alliance partners can behave
opportunistically. Furthermore, Kang et al. (2014, p. 1128) emphasise that companies may
adjust their participation level in strategic alliances in relation to their behavioural and cognitive
learning process in which behavioural directions based on evaluated benefits and risks are
set. The behavioural direction, according to Kang et al. (2014, p. 1129) can be divided into
active behavioural orientation through active involvement and a secured cooperation and
protective behavioural orientation through defensive cooperation and risk-averse participation.
After the companies have chosen the behavioural directions related to the benefit and risk
perception, Kang et al. (2014, p. 1129) claim that some relational outcomes such as the length,
survival and contractual changes of a strategic alliance relationship can be evaluated which
might lead to a commitment or dissolution of the relationship.
Correspondingly, Elmuti and Kathawala et al. (2001, p. 207) emphasise that strategic alliances
might face various further difficulties that might hinder them reaching defined goals. Factors
that can bear difficulties and can lead to failure of a strategic alliance according to Elmuti and
Kathawala (2001, p. 208f), might include:
• Cross-cultural differences
• Coordination problems and opportunism
• Lack of clear goals
64
Cross-cultural differences
According to Aggarwal et al. (2012, p. 526), national culture, especially cultural distances and
differences, can influence global strategic through cultural traits such as family cohesiveness,
assertiveness, tolerance of inequality, group loyalty, social responsibility and respect for
tradition which can be essential for long-term financial decisions regarding risk, time and return.
Furthermore, Das and Kumar (2010, p. 24) point out that national culture refers to a control
mechanism through defined rules for behaving. Thus, Aggarwal et al. (2012, p. 526) cultural
factors that can lead to differences within global strategic alliance can include the legal system
origin and religion, and dimensions proposed by Hofstede (1994) regarding the degree of
individualism or collectivism, masculinity or femininity, power distance, uncertainty avoidance
and long-term or short-term orientation.
Hofstede (1994, p. 2) states that power distance refers to the scope to which less powerful
organization members are accepting that power within organizations is allocated unequally.
Furthermore, Hofstede (1994, p. 2f) points out that collectivist cultures instead suppose that a
person belongs to at least one group which can be an extended family, organization or a clan
and the society is tightly integrated. In this regard, Hofstede (1994, p. 3) claims that
individualism refers to behaviour of self-interest and the strive to self-actualization might be
dominant. Moreover, uncertainty avoidance, according to Hofstede (1994, p. 4f), can be
referred to the tolerance from of a society concerning unstructured and unpredictable situations
where people are more emotional and risk averse. Hofstede (1994, p. 5) argues that long-term
orientation can be associated with efficiency and perseverance, whereas short-term orientation
might represent values such as respect for tradition, reputation, and social obligations.
Eventually, Aggarwal et al. (2012, p. 527) emphasise that masculinity dominant cultures and
societies tend to reward and emphasize male characteristics such as competition, success,
and assertiveness rather than female characteristics such as support and benevolence.
Accordingly, Elmuti and Kathawala (2001, p. 208) point out that strategic alliances partners
who operate in different countries can face language barriers which can lead to
misunderstandings and to an operating inefficiency. According to Elmuti and Kathawala (2001,
p. 208), companies who operate in the U.S. tend to assess performance regarding the market
share, specific financial benefits and profit, whereas Japanese companies might tend to
assess performance based on how an operation assists co-creation and their strategic position
through an improvement of their skills. Nevertheless, Owen and Yawson (2013, p. 3893)
emphasise that cultural similarity or distance regarding common language, the legal system
and religious values may affect the evaluation of foreign investments and the establishment of
global strategic alliances.
65
For evaluating the cultural dimensions and distance, Aggarwal et al. (2012, p. 529) have
measured these cultural dimensions in a selection of 30 countries from all continents in their
study. According to Aggarwal et al. (2012, p. 529), the United States scored highly on
individualism, whereas Colombia resulted in the least individualistic culture and is the most
collectivist culture from the sample. Furthermore, Aggarwal et al. (2012, p. 530) highlight that
Austria showed the highest level of masculinity, but also the lowest power distance level,
whereas Sweden resulted in the lowest masculinity level and Malaysia in the highest level of
power distance. Moreover, Aggarwal et al. (2012, p. 530) point out that the highest level of
uncertainty avoidance as shown by Japan and the lowest level was found in Singapore.
Consequently, Aggarwal et al. (2012, p. 530) provides an illustration of how cultural distance
might act alongside physical distance to enhance or decrease to overall distance between
different countries. The following Table 8 exemplifies the physical and cultural distances
among 564 country pairs (Aggarwal et al., 2012, p. 531)
Table 8 Physical and cultural distances among different countries (Aggarwal et al., 2012, p. 531)
The greatest physical distances of country pairs, according to Aggarwal et al. (2012, p. 531),
can be related to Spain and New Zealand, Colombia and Malaysia, Brazil and Philippines.
Whereas Belgium and Netherlands, Malaysia and Singapore, France and United Kingdom
show the least physical distance. Furthermore, Aggarwal et al. (2012, p. 531) argue that
between the countries Japan and Sweden, Denmark and Mexico, Austria and Malaysia,
Greece and Singapore the highest level of cultural distance was determined including. Thus,
Aggarwal et al. (2012, p. 531) emphasise that combining physical and cultural distance
columns, Belgium and France, Norway and Sweden, Germany and Switzerland are physically
and culturally close together. Nevertheless, Aggarwal et al. (2012, p. 531) claim that none of
66
the most physical distant country pairs can be identified among the most cultural distant
country pairs. Moreover, Aggarwal et al. (2012, p. 531) stress that Japan and Sweden,
Denmark and Mexico, Austria and Malaysia, Greece and Singapore do have the highest
cultural and physical distance together. Eventually, Aggarwal et al. (2012, p. 537) highlight that
common religion and language between financial trading partners can lead to positive effects
for the establishment of global strategic alliances.
Coordination problems and opportunism
Elmuti and Kathawala (2001, p. 208) emphasise that actions taken by subordinated employees
which are not consistent with top-level management can lead to difficulties, particularly when
a company remains a competitor despite the established strategic alliance and collective
objectives. An additional factor which might lead to strategic alliances failure refers to a lack of
coordination between alliance partners, which according to Agarwal et al. (2010, p. 418) may
be a key success factor among strategic alliance partners if decision makers are equal
regarding perceived strategic alliance benefits. Furthermore, Gulati et al. (2012, p. 537) state
that coordination within strategic alliances might emphasise communication, process
management and organization design in which the strategic alliance partners aim to jointly
achieve predetermined objectives and goals.
Furthermore, Agarwal et al. (2010, p. 418) state that strategic alliance partners might operate
rationally and may understand when coordination problems arise. However, Agarwal et al.
(2010, p. 418) argues that each alliance partner bears the risk of opportunistic behaviour in
strategic alliances. As previously stated, the transaction cost theory notes that for potential
strategic alliance partners, according to Gulati et al. (2012, p. 535), effective responses against
opportunistic behaviour such as partner selection, contractual arrangements, control,
monitoring and formal structures is essential for preventing and regulating the potential risk.
Accordingly, Dekker (2004, p. 28) emphasises that Transaction costs might depend on various
characteristics that arise during the transaction process such as uncertainty, frequency and
asset specificity, and various human characteristics such as opportunism and bounded
rationality. Furthermore, Dekker (2004, p. 35) points out that, in relation to the transaction cost
theory, focal companies in strategic alliances may put in more effort to select adequate
partners for preventing opportunistic behaviour by implementing control mechanisms.
Moreover, Dekker (2004, p. 35) states that companies who put more efforts in selecting the
most appropriate strategic alliance partner can reduce the necessity for a formal control
mechanism. Thus, the following Figure 18 illustrates a control mechanism for strategic
alliances to counteract against these control problems (Dekker, 2004, p. 36).
67
Figure 18 Control mechanism to mitigate potential control problems (Dekker, 2004, p. 36)
As mentioned above, asset specificity, uncertainty and frequency can cause transaction costs,
in addition to task uncertainty and interdependence which, according to Dekker (2004, p. 35),
might rely to two control problems in form of coordination requirements and appropriation
concerns Furthermore, Dekker (2004, p. 35) stresses that coordination requirements and
appropriation concerns require increasing capability and goodwill trust to moderate the efforts
invested in seeking alternative strategic alliance partners. Moreover, Dekker (2004, p. 35)
defines goodwill trust as the expectation that another party does not behave opportunistically,
whereas capability trust is related to expectations from strategic alliance partner competencies
to perform a task to a satisfactory level. Formal control consists of two control mechanisms,
where Dekker (2004, p. 35) highlights that the first being outcome control in which goal setting,
incentives systems and reward structures are used to specify outcomes and for monitoring
achievements. Additionally, Dekker (2004, p. 36) argues that the second behavioural control
mechanism might specify how strategic alliance partners should act and monitor through
planning, rules, and regulations. Thus, Dekker (2004, p. 36) claims that capability and goodwill
trust, can decrease coordination requirements, appropriation concerns and formal controls
concerning alliance partners.
Lack of clear goals
Another factor which might bear challenges and might lead to inefficiency or failure in strategic
alliances, according to Elmuti and Kathawala (2001, p. 208), may be that strategic alliances
partners have unequal and unclear goals. Gulati et al. (2012, p. 535) point out that failures of
strategic alliances can be related to varying and misaligned interest of strategic alliance
68
partners. Furthermore, Russo and Cesarani (2017, p. 5) argue that during the strategic alliance
partner selection, a consensus between the resources, objectives, goals, and strategies
between the partners is essential for sustainable and effective cooperation. Therefore, Russo
and Cesarani (2017, p. 5) emphasise that a strategic fit between strategic alliance partners is
fundamental for long-term success in which partner complementarity, compatibility and
congruence are crucial factors.
Das and Kumar (2010, p. 26) note that due to opportunistic behaviour within strategic alliances,
differences in trust and strategic objectives may occur. Consequently, Russo and Cesarani
(2017, p. 5) claim that complementarity of a strategic alliance partner can be related to a
strategic fit which between them, which might increase when the assimilation of competencies
and resources can be used to fill the gap between partners. Strategic alliance partner
congruence, according to Russo and Cesarani (2017, p. 5), refers to the goals and objectives
alignment between the partners. Furthermore, Russo and Cesarani (2017, p. 5) argue that the
compatibility of strategic alliance partners can be referred to a fit between the partners in which
a cultural similarity might help to find an integration between the cultural distance and an
organizational fit, which can be related to the willingness of strategic alliance partners to adapt
the organizational culture, procedures and management practices of each other.
In general, this chapter intents to provide a basic understanding on how partners for global
strategic alliances are selected and which factors in managing strategic alliances can lead to
success and which challenges might emerge. Nevertheless, the following chapter emphasises
the importance of innovation for competitiveness in strategic alliances in line with performance
outcomes for companies engages in strategic alliances.
4. Increasing innovativeness through strategic alliances
After analysing the management of local and global strategic alliances, this chapter
emphasizes the relationship between increased innovativeness and strategic alliances.
Therefore, the following subsection exemplifies how strategic alliances can strengthen
innovativeness through different strategic alliance forms and motives. In addition to the
different opportunities for strategic alliances to enhance their innovativeness, the absorptive
capacity theory is provided to illustrate the process of knowledge acquisition and innovation
performance of strategic alliances in which differentiation of exploitative and explorative
innovation is argued. Finally, innovation strategies for strategic alliances are identified for
increasing corporate innovation performance as open innovation and coopetition. The
following Table 9 comprises of the primarily applied research literature regarding innovation
69
through strategic alliances including their journal ranking. The journal ranking is provided in
the round bracket corresponding to the journal name.
Authors, journal Title of research paper
Topic Key findings
Cui & O’Connor
(2012), Journal of
Marketing (A+)
Alliance Portfolio
Resource Diversity and
Firm Innovation
Types of
strategic
alliances for
innovation
Illustration of the relationship
between strategic alliance
portfolio resource diversity with
environmental and structural
factors for innovation
performance
Felin & Zenger
(2014), Research
Policy (A)
Closed or open
innovation? Problem
solving and the
governance choice
Open
innovation
Identification of different
governance forms of open
innovation:
• Markets and contracts
• Partnerships and corporate
venture capital
• Contests and innovation
platforms
• User communities
Haeussler et al.
(2012), Journal of
Business Venturing
(A)
Strategic alliances and
product development in
high technology new
firms: The moderating
effect of technological
capabilities
Types of
strategic
alliances for
innovation
Identification of different
strategic alliance types for new
product development:
• Vertical upstream alliances
• Horizontal downstream
alliances
• Vertical downstream
alliances
Lichtenthaler (2011),
Academy of
Management
Perspectives (B)
Open Innovation: Past
Research, Current
Debates, and Future
Directions
Open
innovation
Description of knowledge
inflows and outflows for
increased an innovation
performance of companies
through:
• Inbound open innovation
• Outbound open innovation
70
Authors, journal Title of research paper
Topic Key findings
Saebi & Foss (2015),
European
Management Journal
(B)
Business models for
open innovation:
Matching
heterogeneous open
innovation strategies
with business model
dimensions
Open
innovation
Categorization of innovation
strategies for strategic alliances:
• Market-based strategy
• Crown-based strategy
• Collaborative strategy
• Network-based strategy
Zahra & George
(2002), Academy of
Management Review
(A+)
Absorptive Capacity: A
review,
reconceptualization, and
extension
Absorptive
capacity
Identification of external
knowledge sources to increase
innovativeness:
• Potential absorptive
capacity
• Realized absorptive
capacity
Zang et al. (2010),
Journal of
International
Marketing (B)
Managing Knowledge
for Innovation: The Role
of Cooperation,
Competition, and
Alliance Nationality
Coopetition
for innovation
Conceptual framework
regarding the interplay of
cooperation and competition
between strategic alliance
partners for enhancing
innovation performance
Table 9 Primary literature findings concerning innovation through strategic alliances
4.1 Strategic alliances to enhance innovation
According to Nasser and Abuzaid (2014, p. 79), the expression innovation refers to the
development of creative ideas which can be turned into new products, services, and processes
for increasing competitiveness. Furthermore, Nasser and Abuzaid (2014, p. 79) point out that
innovation can be classified into incremental and radical innovation. Moreover, Nasser and
Abuzaid (2014, p. 79) define incremental innovation as products and service improvements
through new features for the existing technology in the existing market, whereas radical
innovation can be defined as product or service innovations which provide new technology
resulting in new market infrastructure. Eventually, Li et al. (2019, p. 5065) argue that many
technological companies may have expanded their innovative abilities during the last 20 years
due to globalization and technological development, which may have been enabled by access
to new knowledge and technology through cooperating with other organizations or companies.
71
Accordingly, Lew and Sinkovics (2013, p. 14) emphasise that an international strategic alliance
may enable a company to expand its resource basis for establishing technologically innovative
services or products. Furthermore, Li et al. (2019, p. 5066) state that the conglomeration of
technology might foster the establishment of strategic alliances through exploring technological
fields and through producing innovations in technological fields. Additionally, Choi (2020, p.
26) states that regarding the knowledge-based view, knowledge can serve as an essential
resource for enhancing innovation, however, many companies may not be able to occupy
sufficient knowledge abilities that are required on the basis of radically changing technology.
Hence, Choi (2020, p. 27) claims that companies might strive to join strategic alliances in
research and development to gain an access to a complementary knowledge base which might
enable them to utilize external knowledge to enhance their innovation performance.
Correspondingly, Haeussler et al. (2012, p. 217f) point out that developing new products and
expanding to new markets may be crucial for companies that operate in dynamic and high
technology markets, given that different types of strategic alliances may lead to different
outcomes. According to Choi (2020, p. 27), strategic alliances between national and global
partners may allow companies to adapt external knowledge to improve their innovation
performance in which knowledge diversity might be essential for an efficient outcome. Thus,
Choi (2020, p. 27) argues that diversity of knowledge from alliance partners may include
technology base diversity which refers to a variety of technology, and a diversity in the R&D
process.
At the same time, Haeussler et al. (2012, p. 218) emphasise that strategic alliances for
enhancing innovativeness to create new products can be classified into vertical alliances that
are upstream or downstream, and horizontal downstream alliances. Furthermore, Haeussler
et al. (2012, p. 218) state that for evaluating possible interdependencies between the
specialization of a company’s new technological capabilities and different strategic alliances
types for new product development, the classification was provided. The following Figure 19
exemplifies different strategic alliance types for enhancing new product development
(Haeussler et al., 2012, p. 220).
72
Figure 19 Types of strategic alliances for new product development (Haeussler et al., 2012, p. 220)
Haeussler et al. (2012, p. 220) claim that vertical upstream alliances are cooperative
relationships that companies can establish with other organizations upstream in their value
chain through interacting with public research institutions and universities for instance which
perform fundamental research. Furthermore, Haeussler et al. (2012, p. 220) argue that
upstream alliances can enable companies to gather valuable specialized technological
knowledge for developing new products. Moreover, Haeussler et al. (2012, p. 221) state that
horizontal strategic alliances might be founded to collaborate with other organizations at a
similar value chain level through gathering knowledge of the partners in design, testing,
prototyping and commercialization to establish new products. However, Haeussler et al. (2012,
p. 221) stress that horizontal alliances are not completely collaborative, but rather they can be
defined as mechanisms for coopetition. Eventually, Haeussler et al. (2012, p. 222) emphasise
that vertical downstream alliances refer to cooperative relationships between companies who
operate downstream their value chains for gaining access to complementary resources as
regulatory and legal competence, distribution, and manufacturing capabilities.
In a similar regard, Cui and O’Connor (2012, p. 26) note that a variety of environmental and
structural factors can affect the resource and information exchange within strategic alliances
and consistently the relationship between the strategic alliance portfolio resource diversity and
the company innovation. The following Figure 20 illustrates the relationship of strategic alliance
portfolio diversity to gain innovation performance consisting of the strategic alliance
73
composition, alliance management and environmental characteristics such as market
uncertainty (Cui & O’Connor, 2012, p. 26).
Figure 20 Strategic alliance portfolio resource diversity and firm innovation (Cui & O’Connor, 2012, p. 26)
Cui and Connor (2012, p. 26) state that the strategic alliance portfolio composition consists of
functional heterogeneity and national dispersion. Furthermore, Cui and Connor (2012, p. 26)
point out that strategic alliances in a portfolio are embedded in similar or different activities as
manufacturing, strategic management, marketing, or R&D which refer to the degree of
functional heterogeneity. Moreover, Cui and Connor (2012, p. 27) emphasise that national
dispersion is related to the degree to which strategic alliance partners within an alliance
portfolio are allocated across a great amount of countries. Another critical factor, according to
Cui and Connor (2012, p. 27), is the ability companies to manage strategic alliances where the
majority control and presence of an alliance management function is identified. Nevertheless,
Cui and Connor (2012, p. 28) argue that the majority control of a company might have an
influence on the activities of strategic alliance partners and the cooperation can be managed
more efficiently to reach its own goals and objectives. Additionally, Cui and Connor (2012, p.
28) highlight that the alliance management function is crucial to establish a dedicated
organizational unit that is responsible to coordinate and manage the activities related to the
strategic alliance. Eventually, Cui and Connor (2012, p. 28) claim that when a market is highly
74
uncertain, resources and information may lose their importance due to unexpected and
frequent changes.
However, Choi (2020, p. 27) stresses that due to a diversity of knowledge between strategic
alliance partners such as research institutes, universities and international partners, some
challenges can arise concerning the complexity in adjusting and recombining distinct
knowledge which can lead to costs of coordination. Furthermore, according to Choi (2020, p.
27), additionally to coordination difficulties, task complexity might increase the risk of
opportunistic behaviour from alliance partners which can negatively affect the overall
performance outcomes of strategic alliances. Moreover, Choi (2020, p. 29) points out that the
construction of a strategic alliance governance structure might reduce coordinating and
collaborating difficulties such as equity-based alliances to mitigate opportunistic behaviour and
to reduce coordination difficulties through a monitoring mechanism. Hence, Choi (2020, p. 31f)
claims that companies that possess unique technologies can limit the access and utilization of
their internal technologies for strategic alliance partners to prevent occupation through specific
safeguards and contractual alliance mechanisms such as.
• No other rights clause
• Steering committee clause
• Assistance clause
• Warranty clause
• Advisory board
Choi (2020, p. 32) argues thar the safeguard clause “no other rights” limits the right of strategic
alliance partners to use internal technologies. Furthermore, Choi (2020, p. 32) states that the
steering committee clause can be referred to an administrative control for monitoring a possible
opportunistic behaviour of alliance partners. Another clause that might support to ensure a
specific level of assistance from strategic alliances to mitigate concerns of alliance partners
regarding technology asymmetry, according to Choi (2020, p. 32) can be related to an
assistance clause. Moreover, Choi (2020, p. 32) emphasises that a warranty clause can
stimulate strategic alliance partners to cooperate during a research and development project
and might ensure to get an access to specific knowledge and know how. Eventually, Choi
(2020, p. 32) claims that an advisory board can enable strategic alliances to evaluate the
dedication and effectivity of alliance partners to prevent free riding.
Predominantly, the stated information in this subchapter concerning types of strategic alliances
for innovation aims to allocate fundamental understanding on how strategic alliances influence
75
innovativeness. However, the next subchapter emphasises on the absorptive capacity for
explaining the innovation process in strategic alliances through which competitiveness of
companies engaged in strategic alliances is examined further on in this master’s thesis.
4.2 Absorptive capacity
After discussing the different types of strategic alliances, the concept of coopetition and open
innovation to enhance the innovative performance of a company through engaging in strategic
alliances, this subchapter deals with the absorptive capacity theory and is going to illustrate a
differentiation between exploitative and exploratory innovation. Absorptive capacity emerged
first by John Hans Adler in the 1960s as a macro-economic concept determining the ability of
the economy to deploy and absorb resources and information externally. However, Cohen and
Levinthal first came up in 1989 with the absorptive capacity at the firm level and revisited it in
1990. According to Cohen and Levinthal (1990, p. 128), external knowledge sources can be
essential for enhancing the innovative performance of a company including the ability to exploit
external knowledge to generate innovative capabilities. Furthermore, Cohen and Levinthal
(1990, p. 128) argue that external acquired knowledge can transmit an ability for recognizing
a value through new information, which can be adapted and applied for commercializing it.
Thus, Cohen and Levinthal (1990, p. 128) claim that the ability of companies applying and
adapting information for commercializing is termed absorptive capacity.
Correspondingly, Zahra and George (2002, p. 186) emphasise that absorptive capacity is built
upon four organizational routines and processes where companies may acquire, assimilate,
transform, and exploit knowledge for achieving various organizational outcomes. Furthermore,
Zahra and George (2002, p. 189) stress that acquisition refers to the ability of companies for
identifying and acquiring information, whereas assimilation refers to the analysation and
interpretation of information. Moreover, Zahra and George (2002, p. 190) state that
transformation is related the combination of existing and acquired knowledge, whereas
exploitation refers to the integration of knowledge into internal operations. Hence, Lichtenthaler
and Lichtenthaler (2009, p. 1319) point out that absorptive capacity, in relation to knowledge
management in strategic alliances, might refer to the assimilation of the acquired knowledge
to incorporate it into the knowledge base of alliance partners, where some prior knowledge
may be required for recognizing absorbed knowledge.
According to Zahra and George (2002, p. 189), the four above-mentioned dimensions can be
built into two subsets termed potential and realized absorptive capacity. Furthermore, Zahra
and George (2002, p. 190) claim that potential absorptive capacity might lead to increased
receptiveness of a company to acquire and assimilate external knowledge, whereas realized
76
absorptive capacity refers to transformation and exploration abilities of companies to leverage
absorbed knowledge. Thus, Zahra and George (2002, p. 191f) argue that experience and
external knowledge might influence absorptive capacity, and that through realized absorptive
capacity companies can reach competitive advantages, illustrated in Figure 21.
Figure 21 Potential and realized absorptive capacity (Zahra & George, 2002, p. 192)
Accordingly, Zahra and George (2002, p. 193) stress that activation triggers might influence
the absorptive capacity progress through external knowledge, which can be distinguished into
internal and external triggers. Furthermore, Zahra and George (2002, p. 193) emphasise that
internal triggers might be organizational crises as inefficient performance or events as mergers
that redefine the strategy of a company, whereas external triggers can be referred to events
which might affect the future of an industry where a company is operating. Moreover, Zahra
and George (2002, p. 193) point out that activation triggers can dispose or reinforce the efforts
of a company seeking an external knowledge. Therefore, Zahra and George (2002, p. 194)
claim that the social integration mechanism might enable the allocation and exploitation of
knowledge, where it can contribute to the assimilation of knowledge informally through social
networks or formally through coordinators.
However, Zahra and George (2002, p. 196) highlight that the regime of appropriability might
influence competitiveness in strategic alliances relating to increased strategic flexibility and
innovativeness. The regime of appropriability, according to Zahra and George (2002, p. 196),
refers to dynamics which might affect the ability of companies defending advantages of new
established processes and products in competitive markets. Eventually, Kocoglu and Keskin
(2015, p. 112) argue that by strong regimes of appropriability companies might covenant
77
knowledge protection for translating it into value, whereas by weak regimes of appropriability
knowledge protection can be more difficult.
Basically, this subchapter intents to provide a comprehension concerning the importance of
absorptive capacity of alliance partners in line with innovation within strategic alliances which
is considered in the following section. Nevertheless, the next subchapter emphasises on
innovation strategies for strategic alliances in relation to the competitive ability of companies
engaged in strategic alliances.
4.3 Innovation strategies for strategic alliances
Based on the above-mentioned types and mechanisms of cooperation to enhance the
innovative performance of a company, this subchapter provides possible innovation strategies
for strategic alliances to increase the competitiveness of a company. Huang and Rice (2009,
p. 202) point out that open innovation strategies can be related to a source of a possible
competitive advantage through an efficient integration of the external generated knowledge to
establish advantages that might be difficult to imitate. Hence, according to Huang and Rice
(2009, p. 202), innovation can be determined as a possible outcome of successful external
and internal research and development process with the acquisition of financial benefits
resulting from the development or improvement of a product of service. Furthermore, Saebi
and Foss (2015, p. 201) state that integrating external knowledge sources into their innovation
processes might require organizational flexibility and readiness of a company to reorganize
the existing strategic orientation for implementing open innovation strategies.
Correspondingly, Bianchi et al. (2011, p. 22) emphasise that companies might invest in R&D
activities to improve existing products, processes, and services, as well as developing new
innovative ones. Furthermore, Bianchi et al. (2011, p. 22) claim that closed approaches for
generating own ideas to develop specific knowledge and to increase the innovative
performance of products, processes and services can limit the success of a company.
Basically, Bianchi et al. (2011, p. 23) state that companies, regarding strategic alliances, can
utilize two types of innovation strategies to exchange knowledge and technologies to increase
the innovative performance of its products, processes, and services through:
• Open innovation
• Coopetition
78
4.3.1 Open innovation
According to Lichtenthaler (2011, p. 75), companies might develop their new technological
achievements for their products and services internally through closed innovation strategies
with a minimum of interactions with the outside environment, whereas several companies seek
external partners to use their technological knowledge. Furthermore, Bianchi et al. (2011, p.
23) argue that the emergence of open innovation can be detected primarily in areas of high
technology where companies such as IBM, Intel or Millennium Pharmaceuticals operate.
Moreover, Saebi and Foss (2015, p. 201) emphasise that open innovation approach can
leverage inputs of external knowledge for enhancing the internal innovation of companies and
for expanding markets to use innovation externally.
Accordingly, Lichtenthaler (2011, p. 76) claim that open innovation can be defined as the use
of dedicated knowledge inflow and outflow to expedite the internal innovation performance in
which two dimensions can be identified:
• Inbound open innovation
• Outbound open innovation
Bianchi et al. (2011, p. 24) emphasise that inbound open innovation might refer to an approach
for leveraging technologies of alliance partners by developing relationships with other
organizations for collecting scientific and technical competencies. According to Lichtenthaler
(2011, p. 76), inbound open innovation can be applied for the utilization of knowledge inflows
and outflows to enhance the internal innovation performance of strategic alliance partners and
to expand markets for the external innovation use. Thus, Lichtenthaler (2011, p. 76) stresses
that inbound open innovation may refer to an outside-in approach that includes the exploration
and acquisition of knowledge from external partners. In contrast, Bianchi et al. (2011, p. 24)
argue that outbound open innovation can be referred to the establishment of relationships with
external organizations for transferring proprietary knowledge or technologies to exploit them
commercially. Eventually, Lichtenthaler et al. (2011, p. 76) claims that outbound open
innovation can be applied as an inside-out approach including knowledge exploitation and
commercialization.
Consequently, Saebi and Foss (2015, p. 204) emphasise that inbound open innovation, which
refers to internal knowledge use, might be applied as an open innovation strategy, which
require various business models. Thus, Saebi and Foss (2015, p. 206) provide a classification
of inbound open innovation strategies which are:
79
• Market-based innovation strategy
• Crowd-based innovation strategy
• Collaborative innovation strategy
• Network-based innovation strategy
Saebi and Foss (2015, p. 206) highlight that market-based innovation strategies are
characterized through knowledge inputs obtained by markets for enhancing innovativeness of
companies with low diversity of external resources. Furthermore, Saebi and Foss (2015, p.
206) argue that representative market-based innovation refers to the acquisition of small
innovative start-ups and R&D outsourcing, where companies are able to profit from existing
innovations and complementary resources. In this regard, according to Saebi and Foss (2015,
p. 206), an example can be given concerning the acquisition of Skype by Microsoft for
accelerating innovation in communications of Microsoft. Moreover, Saebi and Foss (2015, p.
206) claim that another possible innovation strategy can be a crowd-based innovation strategy,
where the required knowledge might be acquired by sources from many actors through get an
access to a distributed knowledge of a community or external individuals and in which crowd-
sourcing can be referred to innovation contests or the engagement with user communities.
Felin and Zenger (2014, p. 918) argue that through a collaborative innovation strategy with
external partners, transfer of knowledge through alliances with other organizations or
competitors can enable the generation and recombination of specific knowledge to enhance
the innovative performance of a company. Furthermore, Saebi and Foss (2015, p. 206) point
out that when a company engages into a collaborative agreement with various knowledge-
tensive partners such as universities, research institutes or other companies, a collaborative
innovation strategy might be applied. Hence, Saebi and Foss (2015, p. 207) claim that
complementarily to a collaborative innovation strategy, a company can apply a network-based
innovation strategy that integrates the external partners for developing collectively knowledge
from variety of external communities, organizations and individuals.
Correspondingly, Felin and Zenger (2014, p. 919) highlight that through open innovation,
companies can exploit knowledge from the market, which can be categorized through four
different open innovation governance types such as:
• Markets and contracts
• Partnerships and corporate venture capital
• Contests and innovation platforms
• User communities
80
According to Felin and Zenger (2014, p. 920), through contractual or market governance types
of open innovation, companies might be able to access specific knowledge or technology by
the exchange of property rights to transfer completed solutions that can be submitted for sale.
Furthermore, Felin and Zenger (2014, p. 920) argue that partnerships such as strategic
alliances and corporate venture capital involve a type of governance for solving issues of
intermediate complexity through a collaborative governance form where external partners
might be more open to share knowledge with the focal company, Moreover, Felin and Zenger
(2014, p. 921) state that contests and innovation platforms can be related to governance types
for accessing solutions for issues with a wide range of companies or individuals through
communication channels and property rights, which can lead to a cost saving for mutual
generated solutions. Hence, Felin and Zenger (2014, p. 922) claim that user communities
provide another open innovation governance form through discussions where users can
develop solutions that can be adopted from companies, where the benefits might be shared
by the whole community by enhanced product features.
4.3.2 Coopetition
According to Zhang et al. (2010, p. 75), interfirm competition and cooperation might be two
corresponding aspects of strategic alliances that differ in their impact on the acquisition of
knowledge. Furthermore, Ritala (2012, p. 307) points out that value creation within a strategic
alliance might depend on the acquisition of specific knowledge and resources which
companies can obtain through different forms of interfirm partnerships in which they can
collaborate and where they compete with certain stakeholders simultaneously. Hence,
Bouncken and Kraus (2013, p. 2060) argue that the interplay of competition and collaboration
is termed coopetition and can help a company in a dynamic business environment to divide
research and development costs, share economies of scale, seek for complementary
resources, allocate risks and utilize synergistic effects through the bundling of resources.
Moreover, Ritala (2012, p. 309) claims that the main motives for companies to engage in a
collaboration with competitors may be cost and risk sharing, to integrate complementary
resources and to increase the competitiveness.
Correspondingly, Zhang et al. (2010, p. 75f) emphasise that interfirm learning in strategic
alliances can enhance efficiency by internalizing acquired knowledge in which knowledge can
be gained through learning. Furthermore, Bouncken and Kraus (2013, p. 2061) argue that
increasing the innovativeness might require the transformation of gathered knowledge into new
processes, services and products including the dissemination of these inventions into a
market. Hence, Bouncken and Kraus (2013, p. 2062) point out that acquisition of specific
knowledge may be crucial for the development and sophistication of new ideas to develop
81
specific knowledge about technological advancements or customer needs regarding the
above-mentioned knowledge-based view.
Accordingly, the following Figure 22 illustrates the interplay of cooperation and competition
between companies within strategic alliances to increase innovation performance (Zhang et
al., 2010, p. 76).
Figure 22 Cooperation and competition to increase innovation performance (Zhang et al., 2010, p. 76)
Zhang et al. (2010, p. 78) state that interfirm cooperation and interfirm competition can both
be positively related to knowledge acquisition and to the creation of knowledge for enhancing
innovation performance. Furthermore, Zhang et al. (2010, p. 81) stress that interfirm
cooperation is defined as a cooperative relationship to reach determined strategic goals,
whereas interfirm competition is the overlapping among strategic alliance partners regarding
resource and product market. In this regard, Zhang et al. (2010, p. 81) argue that acquisition
of knowledge can be defined as the scope to which a company can gain innovation related
knowledge from strategic alliance partners. Moreover, Zhang et al. (2010, p. 81) highlight that
new knowledge might afterwards be created as new knowledge-based elements from strategic
alliances can improve the innovative outcomes of a company. Thus, Zhang et al. (2010, p. 85)
claim that nationality of alliance partners might influence innovative performance. According to
Zhang et al. (2010, p. 85), innovative performance may be greater among national strategic
alliances partners than among global ones.
In general, the stated information in this chapter intents to provide an understanding on how
innovation strategies are related to competitiveness in strategic alliances. However, for
enabling research into competitiveness of strategic alliances, absorptive capacity and
innovation strategies are brought in line with distinct types of strategic alliances. Hence, the
following chapter emphasises on competitiveness of companies engaged in strategic alliances.
82
5. Competitiveness of companies participating in strategic alliances
After the development and exchange of knowledge to enhance innovative performance,
possible outcomes of strategic alliances in a global dynamic business environment are
analysed and described in this chapter. Sambastivan et al. (2011, p. 549) argue that through
engaging in strategic alliances, companies might achieve various performance outcomes in
the form of acquisition of critical resources, enhancement of the market power or an increased
profitability. Hence, this chapter displays possible outcomes for companies through the
participation in strategic alliances, which are distinguished, according to Kohtamäki at al.
(2018, p. 196), into organizational outcomes and financial performance outcomes. Additionally,
this master’s thesis further examines negative outcomes of companies engaged in strategic
alliances. Hence, Table 10 expounds the primarily applied research literature in this
subchapter including their journal ranking. The journal ranking is provided in the round bracket
corresponding to the journal name. The journal ranking is provided in the round bracket
corresponding to the journal name.
Authors, journal Title of research paper
Topic Key findings
Boone and Ivanov
(2012), Journal of
Financial Economics
(+A)
Bankruptcy spillover
effects on strategic
alliance partners
Negative
outcomes of
strategic
alliances
Investigation of spillover effects
of strategic alliance partners on
other alliance partners
concerning performance.
Cheng et al. (2016),
Journal of
Engineering and
Technology
Management (C)
Effects of open
innovation and
knowledge-based
dynamic capabilities on
radical innovation: An
empirical study
Innovation
performance
Examination of the effectiveness
of open innovation inbound and
outbound activities of strategic
alliances on the radical
innovation performance
Christofferson
(2013), International
Journal of
Management
Reviews (B)
Review of Antecedents
of International Strategic
Alliance Performance:
Synthesized Evidence
and New Directions for
Core Constructs
Sales level
and
efficiency
Identification of strategic alliance
performance outcome
measures:
• Subjective measures
• Accounting measures
• Cumulative abnormal return
83
Authors, journal Title of research paper
Topic Key findings
Fernandez et al.
(2018), Long Range
Planning (B)
Implementing the right
project structure to
achieve coopetitive
innovation projects
Innovation
performance
Identification of partner
characteristics, organizational
design, and benefits of radical
and incremental innovation
projects from strategic alliances
between competitors
Forés & Camisón
(2016), Journal of
Business Research
(B)
Does incremental and
radical innovation
performance depend on
different types of
knowledge accumulation
capabilities and
organizational size?
Innovation
performance
Classification of innovation
performance outcomes of
strategic alliances:
• Incremental innovation
• Radical innovation
Ho et al. (2019),
Management
International Review
(B)
Knowledge Acquisition
in International Strategic
Alliances: The Role of
Knowledge Ambiguity
Knowledge
management
Examination of knowledge
ambiguity for international
knowledge acquisition in
international strategic alliances
through:
• Institutional distance
• Relational capital
Huang (2009),
Knowledge
Management
Research and
Practice
(NR/CEFAGE: C)
Knowledge creation in
strategic alliances based
on an evolutionary
perspective: a
mathematical
representation
Knowledge
management
Identification of a knowledge
creation process through:
• Socialization
• Externalization
• Combination
• Internalization
Kohtamäki et al.
(2018), Industrial
Marketing
Management (B)
Alliance capabilities: A
systematic review and
future research
directions
Knowledge
management
Illustration of knowledge
management process in
strategic alliances through:
• Knowledge creation
• Knowledge transfer
• Knowledge acquisition
• Knowledge articulation
84
Authors, journal Title of research paper
Topic Key findings
Lambe et al. (2002),
Journal of the
Academy of
Marketing Science
(A)
Alliance Competence,
Resources, and Alliance
Success:
Conceptualization,
Measurement, and Initial
Test
Resource
accumulation
Examination of joint senior
management commitment and
joint alliance competence to
generate idiosyncratic resources
and to acquire complementary
resources for a joint strategic
alliance success
Ma et al. (2012),
Industrial Marketing
Management (B)
The effect of strategic
alliance resource
accumulation and
process characteristics
on new product
success: Exploration of
international high-tech
strategic alliances in
China
Resource
accumulation
Investigation of relationship
between strategic alliance
resource accumulation on new
product development to
enhance innovativeness, speed
to market and market
performance
Marciukaityte et al.
(2009), Journal of
Business Research
(B)
Strategic alliances by
financial services firms
Profitability Investigation of profitability and
efficiency increasement through
strategic alliances among
financial service companies,
where no significant effects
were detected
Min & Joo (2016),
Journal of Air
Transport
Management
(NR/CEFAGE: C)
A comparative
performance analysis of
airline strategic alliances
using data envelopment
analysis
Sales level
and
efficiency
Investigation of operational
efficiency from three well-known
airlines before and after joining
strategic alliances
Varma et al. (2015),
Asia Pacific Business
Review (C)
Cultural determinants of
alliance management
capability: an analysis of
Japanese MNCs in India
Negative
outcomes of
strategic
alliances
Examination of cross-border
strategic alliances concerning
alliance outcomes and alliance
failure
85
Authors, journal Title of research paper
Topic Key findings
Wang et al. (2015),
Journal of Business
Research (B)
The effects of firm
capabilities on external
collaboration and
performance: The
moderating role of
market turbulence
Market
performance
Development of a conceptual
framework for market and
financial performance
comprising of external
collaboration effectiveness
through innovation, information,
and relational capability
Wittmann et al.
(2009), Industrial
Marketing
Management (B)
Explaining alliance
success: Competences,
resources, relational
factors, and resource-
advantage theory
Resource
accumulation
Identification of different types of
resources from strategic alliance
partners for alliance success:
• Complementary resources
• Idiosyncratic resources
Table 10 Primary literature findings concerning possible outcomes of strategic alliances
5.1 Organizational outcomes of strategic alliances
By engaging in cooperation with other companies in form of a strategic alliance, Zhang et al.
(2010, p. 81) claim that companies aim to achieve defined strategic goals which can be
enabled through acquiring external knowledge to develop new products and services for
increasing competitiveness. In order to reach its strategic goals, Kohtamäki at al. (2018, p.
190) emphasise that a company might search for strategic partners that share complementary
and specific resources to utilize. Furthermore, Zhang et al. (2010, p. 81) argue that through
generating specific knowledge, strategic goals can be achieved in relation to the development
of new ideas, processes, or technologies to improve products or services. Moreover,
Kohtamäki at al. (2018, p. 194) stress that a strategic alliance can assist a company to increase
its innovative performance which might be facilitated through a learning process between
strategic alliance partners and the exchange of knowledge.
According to Meier (2011, p. 2), intangible resource sharing in a cooperation between
companies such as specific competences or knowledge can increase the competitiveness of
a company in a dynamic business environment in which the creation of knowledge can be
related to a collective development of new knowledge by strategic alliance partners.
86
Consequently, Kohtamäki et al. (2018, p. 196) classifies organizational outcomes of strategic
alliances as:
• Resource accumulation
• Knowledge generation
• Innovation performance
5.1.1 Resource accumulation
Wittmann et al. (2009, p. 743) argue that companies that aim to establish strategic alliances
might pursue strategies that contain the extension of their stock of resources to increase the
profitability and efficiency in a company. Thus, Wittmann et al. (2009, p. 744) state that a
company can apply different approaches for gaining access to resources by developing them
alone or together with other companies through strategic alliances. As mentioned previously
in the subchapter of the theoretical foundations of strategic alliances, resources can be,
according to Lew and Sincovics (2013, p. 14), intangible or tangible such as assets,
competencies, or specific skills. Furthermore, Lew and Sincovics (2013, p. 14) claim that such
resources can be incorporated in specific services or products which might promote value
creation and competitiveness of a company.
Apart from the classification of intangible and tangible resources, Wittmann et al. (2009, p.
744f) emphasise that resources of strategic alliance partners might be similar to both partners
and specific to a particular partner, which can be termed as:
• Complementary resources
• Idiosyncratic resources
According to Lambe et al. (2002, p. 144), complementary resources refer to the degree to
which companies in strategic alliances are able to redress shortcomings in each other’s
resource base for achieving strategic goals. Furthermore, Wittmann et al. (2009, p. 745)
emphasise that complementary resources accessed by strategic alliance partners can mitigate
difficulties in global dynamic markets through collaborating. In addition to complementary
resources, Wittmann et al. (2009, p. 745) claim that strategic alliance partners can generate
resources during the strategic alliance lifetime by integrating respective resources of alliance
partners which refers to idiosyncratic resources. The following Figure 23 exemplifies the
relationship between idiosyncratic and complementary resources with regard to the
performance of strategic alliances (Lambe et al., 2002, p. 143).
87
Figure 23 Strategic alliance competence model of resources (Lambe et al., 2002, p. 143)
Lambe et al. (2002, p. 143) argue that joint strategic alliance competence might be crucial for
reaching goals in strategic alliances by acquiring complementary resources and by generating
idiosyncratic resources (Lambe et al., 2002, p. 143). Complementary resources, according to
Lambe et al. (2002, p. 143), can support the establishment of idiosyncratic resources by
encouraging strategic alliance partners to concentrate on potential strategic outcomes. Hence,
Lambe et al. (2002, p.144) note that a high level of idiosyncratic resources in a strategic
alliance can increase mutual success. Furthermore, Lambe et al. (2002, p. 145) point out that
previous experience of executives concerning strategic alliances and competent alliance
executives can enhance alliance competence which in turn might support the generation of
idiosyncratic resources. Nevertheless, Lambe et al. (2002, p. 147) claim the commitment of
the senior management from all partnering might be required alternative to achieve goals might
be required to facilitate an alliance competence as the strategic direction of companies often
is driven by senior management.
Wassmer and Dussage (2011, p. 49) emphasise that combining resources within strategic
alliances can enable partnering companies to reduce costs through operational effectivity for
increasing value creation enabled by additional services and products. Furthermore, Ma et al.
(2012, p. 470) argue that concerning the resource-based view, acquired resources might
enable strategic alliances to enhance flexibility and effectiveness of strategic business
processes for developing new products. Moreover, according to Ma et al. (2012, p. 470), two
factors may contribute to product and service development in strategic alliances which might
be marketing and technology resources. Hence, Ma et al. (2012, p. 470) point out that
88
marketing resources refer to customer relationship development, investigation of customer
preferences and needs, and to collection of specific market data. At the same time, Ma et al.
(2012, p. 470) state that technological resources include R&D activities, engineering
management, competencies of employees, and specific equipment.
Correspondingly, Wassmer and Dussage (2011, p. 52) stress that interdependencies between
resources of strategic alliance partners can positively affect the value creation related to the
stock of resources of a company. Thus, Ma et al. (2012, p. 471) claim that two characteristics
might be significant to the integration and establishment of resources in new product
development process of strategic alliances, partner interdependence and task
interdependence. This point is shown in Figure 24 below.
Figure 24 Resource accumulations, process characteristics and performance outcomes (Ma et al., 2012, p. 472)
According to Ma et al. (2012, p. 471), partner interdependence in strategic alliances might
enable resource integration referring to the scope to which completion of particular tasks
depend on alliance partner interaction. Furthermore, Ma et al. (2012, p. 471) argue that high-
level of partner interdependence might lead to greater resource integration between alliance
partners which can enhance deployment of resources for developing new products. Moreover,
Ma et al. (2012, p. 471) point out that task interdependence in strategic alliances might refer
to the extent to which functions which are related to marketing and technology depend to one
another for finishing each development task. Hence, Ma et al. (2012, p. 471) emphasise that
task interdependence might emerge for instance after the finalization of the development of a
89
prototype in which a task related to technology depends on the interaction with market testing
and analysing. Eventually, Ma et al. (2012, p. 473) claim that a high degree of partner and task
interdependence might improve development of products which can result in enhanced market
performance.
Basically, the information stated in this subchapter emphasises a type of organizational
outcome of strategic alliances to enable further examination with regard to competitiveness of
companies engaged in strategic alliances. However, information of this subchapter is
necessary since the main purpose of this master’s thesis is to examine strategic alliances
concerning competitiveness in line with innovation. Thus, the following subchapter aims to
provide an understanding of knowledge generation within strategic alliances.
5.1.2 Knowledge generation
In relation to the accumulation of resources through strategic alliances, the management of
knowledge, according to Meier (2011, p. 1), might appear as an essential type of resource to
establish capabilities, services and products for increasing the competitiveness of a company.
Furthermore, Jiang et al. (2016, p. 103) claim that there are two knowledge management
methods, acquisition of valuable knowledge from strategic alliance partners and collective
creation of new knowledge, which can serve as an intermediary process for partnering
companies of strategic alliances to enhance their innovativeness and financial outcomes.
Moreover, Jiang et al. (2016, p. 103) point out that companies engaged in strategic alliances
might be committed to share knowledge with each other to develop heterogeneous
competencies to achieve their strategic objectives. Nevertheless, Jiang et al. (2016, p. 103)
emphasise that companies may be obliged to combine their existing knowledge to establish
new knowledge for exploiting the competencies to develop products and generate value.
Consequently, Kohtamäki et al. (2018, p. 191) argue that the management of knowledge within
strategic alliances can be divided into four groups:
• Knowledge creation
• Knowledge transfer
• Knowledge acquisition
• Knowledge articulation
Knowledge creation and transfer
As mentioned in the subchapter ‘Motives for strategic alliances, according to Meier (2011, p.
1), companies can have distinct motives to enter strategic alliances as increasing market
share, profitability or exchanging knowledge. Thus, Meier (2011, p. 2f) argues that in a global
90
dynamic business environment with knowledge-based competition, strategic alliances can
serve as an essential approach for voluntary arrangements between companies to collectively
create, transfer or utilize knowledge commercially. Furthermore, Jiang et al. (2016, p. 106)
claim that the creation of new knowledge can enhance innovation activities of companies which
might enable companies to enter new markets, introduce new services or products and to
increase their profitability.
Accordingly, Huang (2009, p. 55) notes that knowledge creation in strategic alliances can be
enabled through dynamic interactions between individuals in organizations. Furthermore,
Huang (2009, p. 55) emphasise that knowledge can be classified into explicit and tactic
knowledge in which explicit knowledge refers to transmitted and stored data, manuals, and
scientific formulas. In contrast, Feller et al. (2013, p. 316) point out that tactic knowledge can
be described as difficult to communicate, formalize and share with others in form of shared
collaborative experiences, routines and culture of a company, and mutual mental models.
Consequently, Huang (2009, p. 56) argues that knowledge creation in strategic alliances can
be related to a spiralling process in which strategic alliance partners provide tactic and explicit
knowledge by repetitive interactions with one another. The Figure 25 below illustrates the
socialization, externalization, combination, and internalization (SECI) process of knowledge
creation in strategic alliances. The SECI knowledge creation model, according to Huang (2009,
p. 56), can be explained as a socialization of tactic knowledge, an externalization of tactic to
explicit knowledge, a combination of explicit knowledge, and an internalization of explicit
knowledge for creating implicit knowledge.
Figure 25 Knowledge creation in strategic alliances (Huang, 2009, p. 56)
91
According to Feller et al. (2013, p. 316), socialization can be related to interactions between
strategic alliance partners in which mental models, skills and experiences are mutually
exchanged to create sympathized knowledge. Furthermore, Feller et al. (2013, p. 316) state
that externalization refers to the articulation of tactic knowledge to an explicit one through
concepts, images or words which might be released through a mutual reflection between
strategic alliance partners. Moreover, Feller et al. (2013, p. 316) highlight that knowledge
combination through combining new explicit knowledge and existing one from several partners
to implement them into new products or services might be another important aspect in the
knowledge creation process. Eventually, Feller et al. (2013, p. 320) claim that the process of
internalization converts explicit into tactic knowledge in which knowledge can be absorbed to
implement it into business practices.
In relation to the knowledge creation process within strategic alliances, Meier (2011, p. 4)
emphasises empirical evidence of knowledge management outcomes in strategic alliances
concerning knowledge creation, transfer and application exemplified in Table 11 below. In
order to develop specific knowledge management outcomes, 81 relevant scientific studies
were briefly reviewed in relation with knowledge management outcome determinants such as
knowledge characteristics, partner characteristics and partner interaction in which primarily
studies concerning the knowledge transfer within strategic alliances were identified (Meier,
2011, p. 4).
Knowledge management outcomes Creation Transfer Application
Knowledge characteristics Tacitness Complexity Specificity
Partner characteristics Size of company Nationality Learning intention
Partner interaction Competitive
overlap
Trust Prior ties
Table 11 Determinants of knowledge management outcomes based on Meier (2011, p. 4)
The identified knowledge characteristics from Meier (2011, p. 5), which can serve as sources
for increased competitiveness are tacitness, complexity and specificity in which tacitness may
serve to facilitate knowledge transfer. Furthermore, Meier (2011, p. 7) claims that complexity
can in strategic alliances can arise when a large amount of knowledge is incorporated into
technologies and organizational routines, whereas specificity can refer to investments in
resources and competencies which in turn can enhance knowledge transfer. Moreover, Meier
(2011, p. 7) argues that characteristics of strategic alliance partners which might influence
92
knowledge management outcomes can be company size, nationality or learning intention.
Accordingly, Meier (2011, p. 11f) highlights that openness for interaction between strategic
alliance partners can affect knowledge management outcomes which might be determined by:
• Competitive overlap
• Trust
• Prior ties
Meier (2011, p.12) stresses that a high-level of a competitive overlap between strategic alliance
partners can prompt companies to be more reserved about their own knowledge, since an
unwanted transfer of knowledge to other strategic alliances partners can compromise their own
competitiveness, which in turn can hinder the knowledge transfer between competitors.
Furthermore, Meier (2011, p. 12) argues that another factor which may contribute to openness
between strategic alliance partners which can be referred to trust. Trust between alliance
partners, according to Meier (2011, p. 12), can mitigate opportunistic behaviour and a negative
competitive overlap influence, and might facilitate to them for interacting more closely, which
in turn can positively effect transfer of knowledge. Moreover, Meier (2011, p. 13) claims that a
previous relationship between strategic alliance partners, and hence prior ties between them,
can enhance the collective knowledge creation and transfer.
Concerning knowledge transfer in strategic alliances, Tsang (2008, p. 8) emphasises that
knowledge transfer refers to a process where strategic alliances might recreate complicated
routines and processes into new ones. Therefore, Tsang (2008, p. 8) argues that knowledge
transfer in strategic alliances can be distinguished into various stages:
• Initiation
• Implementation
• Ramp-up
• Integration
The first mentioned stage within the knowledge transfer process, according to Tsang (2008, p.
8), refers to the initiation in which opportunities are identified for transferring specific
knowledge. After the identification of specific knowledge, Tsang (2008, p. 12) states that the
implementation stage might start with the decision to carry out this specific knowledge transfer
in which strategic alliance partners might need to develop proof that the new knowledge is
superior to the old one. Furthermore, Tsang (2008, p. 14) points out that after implementing
the specific knowledge in the organizational routines, the ramp-up stage starts when strategic
alliance partners use the transferred knowledge and when unexpected issues can arise from
93
utilizing new routines. Eventually, Tsang (2008, p. 17) claims that the integration stage is when
stepwise institutionalization of new routines occurs and when strategic alliance partners are
satisfied with the results.
Knowledge acquisition and articulation
Regarding the knowledge-based view, Jiang et al. (2016, p. 105) state that identifying and
acquiring external knowledge from other companies can be essential for learning from one
another and for minimizing operation costs for increasing competitiveness. Hence, Ho et al.
(2019, p. 439) claim that acquisition of knowledge through national or international strategic
alliances can encourage companies to establish new capabilities which might serve as a
foundation for enhanced innovative performance and increased competitiveness for
companies. Furthermore, Ho et al. (2019, p. 439) argue that during this specific type of inter-
organizational learning between strategic alliance partners, various types of knowledge can be
acquired such as managerial, technological, manufacturing, marketing and new product
development competencies, and professional expertise.
However, Liu et al. (2010, p. 237f) point out that relational capital in strategic alliances might
be essential for a successful knowledge acquisition process. Thus, Liu et al. (2010, p. 238)
state that relational capital in strategic alliances might refer to a relational rent that is created
in an exchange relationship between alliance partners in which three key dimensions might
affect the knowledge acquisition and organizational learning on alliance outcomes:
• Trust
• Transparency
• Interaction
According to Liu et al. (2010, p. 239f), trust during the knowledge acquisition process in
strategic alliances refers to expectations of strategic alliance partners that all will behave
toward an efficient cooperation which can be referred to as competence trust and goodwill
trust. Furthermore, Liu et al. (2010, p. 240) state that competence trust refers to expectations
concerning the performance of technical experts, whereas goodwill trust is the moral obligation
that partners expound a worry for the interest of other partners before their own. Moreover, Liu
et al. (2010, p. 240) point out that transparency between partners, especially during the
acquisition of knowledge in strategic alliances, might refer to the openness and willingness of
partners to share required information. Hence, Liu et al. (2010, p. 240) claim that interaction
between alliance partners might facilitate exchange of information exchange which in turn can
enhance trust between the partners.
94
Ho et al. (2019, p. 440) emphasise that international strategic alliances might face difficulties
in acquiring desirable knowledge through strategic and institutional differences between
strategic alliance partners. Furthermore, Ho et al. (2019, p. 440) argue that strategic alliances
might face issues concerning the protection of knowledge of partners due to institutional
distance between partners mitigated through relational capital to enhance the absorptive
capacity and the strategic alliance performance. Therefore, the Figure 26 below exemplifies
the role of knowledge ambiguity in relation to the acquisition of knowledge in international
strategic alliances, where according to Ho et al. (2019, p. 442), two perceived issues as
institutional distance and relational capital can affect the knowledge acquisition.
Figure 26 Knowledge ambiguity and international knowledge acquisition (Ho et al., 2019, p. 443)
Ho et al. (2019, p. 444) point out that international strategic alliance partners from different
countries can be institutionally distant meaning they are dissimilar concerning normative,
cognitive and regulatory institutions between countries of origin making knowledge transfer
and acquisition a difficult task and can lead to knowledge ambiguity. Thus, Ho et al. (2019, p.
445) emphasise that relational capital in strategic alliance, as above stated, can positively
affect the relationship between strategic alliance partners and might negatively influence
knowledge ambiguity and enhance the acquisition of knowledge within international strategic
alliances. However, Ho et al. (2019, p. 446f) highlight that the absorptive capacity of strategic
alliance partners, might be crucial in international high-tech strategic alliances to better
understand and evaluate the acquired knowledge. Eventually, Ho et al. (2019, p. 447) argue
that a high-level of absorptive capacity of international strategic alliance partners can reduce
knowledge ambiguity during the acquisition of knowledge alliances.
After acquiring specific knowledge within strategic alliances, Lee et al. (2011, p. 2224) note
that the articulation of knowledge might be essential to establish dynamic capabilities.
Nevertheless, Lee et al. (2011, p. 2226) point out that the integration power of managers in
95
strategic alliances between service companies concerning previous service experience might
be crucial to facilitate the articulation of knowledge for companies. Furthermore, Lee et al.
(2011, p. 2227) claim that a company can enhance the establishment of knowledge within a
strategic alliance when other partners occupy specific knowledge through external linkages
with other organizations or networks. Consequently, Lee et al. (2011, p. 2230) emphasise that
knowledge articulation, illustrated in the Figure 27 below, might convert dynamic learning
within strategic alliances into dynamic capabilities which in turn can facilitate competitive
scanning and quality management capabilities.
Figure 27 Drivers of dynamic learning for dynamic knowledge articulation (Lee et al., 2011, p. 2230)
In addition to manager integration power, external linkages and previous experience, Lee et
al. (2011, p. 2230) state another driver for dynamic learning in strategic alliances as repeated
practice can be mentioned. Repeated practice, according to Lee et al. (2011, p. 2231), refers
to the ability of strategic alliance members to review previous failures and record previous
experience to create a learning system. Furthermore, Lee et al. (2011, p. 2231) argue that the
codification of experience might be necessary to review and analyse the routines of processes
of a company. Moreover, Lee et al. (2011, p. 2231) emphasise that knowledge ambiguity might
96
be an essential factor to absorb knowledge in strategic alliances which can support the
dynamic learning process of knowledge accumulation. Thus, Lee at al. (2011, p. 2231f) point
out that codifiability, teachability and observability can enhance the dynamic knowledge
articulation process in strategic alliances in which codifiability can be related the ability to
encode specific knowledge. Eventually, Lee et al. (2011, p. 2232) stress that teachability refers
to the extent to which employees are trained for performing tasks, whereas observability is
related to the scope to which employees may adopt organizational routines.
Principally, the information stated in this subchapter concerning the generation of knowledge
in strategic alliances intends to provide a basic understanding of how companies can profit by
engaging in strategic alliances. However, the following subchapter notes innovation
performance in relation to competitiveness of companies participating in strategic alliances.
Thus, the third mentioned type of organizational outcome in strategic alliances is examined in
the next subchapter which should enable a reader to understand value creation in strategic
alliances.
5.1.3 Innovation performance
According to Forés and Camisón (2016, p. 831), innovation performance can serve as an
outcome of the creation, accumulation, and implementation of new knowledge for companies
participating in strategic alliances. Furthermore, in relation to the transaction cost theory,
Fernandez et al. (2018, p. 384f) emphasise that companies might join strategic alliances for
utilizing acquired knowledge from alliance partners to enhance innovativeness of products and
services. Moreover, Fernandez et al. (2018, p. 386) claim that a cooperation between
competitors might be applied as a strategy for enhancing innovation through complementary
knowledge exchange allowing companies occupying specific resources. Accordingly, Forés
and Camisón (2016, p. 832) note that innovative performance outcomes of strategic alliance
can be classified in to two groups:
• Radical innovation
• Incremental innovation
Radical innovation, according to Cheng et al. (2016, p. 79), can be defined as completely newly
generated skills in new services or products that might modify consumption, delivery and
purchasing patterns such as Amazon which utilizes specific technologies to regenerate
delivery and purchasing processes. Furthermore, Cheng et al. (2016, p. 79) state that electric
cars, optical fibres, smart phones or computerized tomography scanners can be related to
radical innovation which can facilitate a company to establish new market opportunities and to
97
increase their market share. Moreover, Forés and Camisón (2016, p. 833) highlight that radical
innovation performance can produce fundamental changes for strategic alliance participants
concerning their processes, methods, organizational structure, technologies which might force
companies to reshape their business activities. On the contrary, Forés and Camisón (2016, p.
833) emphasise that incremental innovation performance of strategic alliances can be related
to an improvement of existing technologies, processes, methods, services, and products.
Nevertheless, Fernandez et al. (2018, p. 389) stress that incremental innovation refers to
innovations which require less modifications and changes of organizational, however,
processes, structures, and technologies.
According to Forés and Camisón (2016, p. 834), a company can forfeit a wide range of
opportunities that fall outside the usual business activities which might require the acquisition
of external technologies and competencies. Relating to possible innovative performance
outcomes of strategic alliances, Cheng et al. (2016, p. 79) argue that open innovation might
enable companies to develop radical innovation within strategic alliances. Furthermore, Forés
and Camisón (2016, p. 835) claim that open innovation might require absorptive capacity of
strategic alliance partners for radical innovation performance in a global dynamic environment.
Consequently, Cheng et al. (2016, p. 79) point out that open innovation can be related to
inbound and outbound activities. Inbound activities refer to the exploration and implementation
of external technological sources from alliance partners. In contrast, Cheng et al. (2016, p. 79f)
state that outbound activities refer to the exploitation of technological competencies by
commercializing internal technological skills and abilities. Therefore, Cheng et al. (2016, p. 80)
stress that strategic alliance partners might require knowledge sharing and acquisition
capabilities, which is exemplified in the Figure 28 below, and in turn can enable companies to
generate radical innovation
Figure 28 Open innovation activities for radical innovation (Cheng, 2016, p. 80)
98
For developing radical innovations within strategic alliances, Cheng et al. (2016, p. 82f) argue
that companies might require the establishment of pioneering ideas through open innovation
inbound activities in which knowledge acquisition capabilities can reinforce inbound activities
to enhance the radical innovation performance, Furthermore, according to Cheng et al. (2016,
p. 83), when companies within strategic alliances perform open innovation outbound activities,
companies with a high-level of knowledge acquisition capabilities might be able to identify
valuable market information and expertise which can facilitate the development of radical
innovation. In relation to the knowledge-based view, Cheng et al. (2016, p. 87) claim that
knowledge acquisition and sharing capabilities might be crucial to improve radical innovation
through strategic alliance open innovation activities.
Along that same line, Fernandez et al. (2018, p. 388) have provided a classification concerning
innovation project where competing companies cooperate to reach market breakthrough
innovations. Thus, Fernandez et al. (2018, p. 388) have investigated the degree of innovation
for different innovation project types including potential risks through coopetition strategies.
The following Table 12 illustrates radical and incremental coopetive innovation projects related
to characteristics of strategic alliance partners, organizational design and to benefits
concerning the organizational design (Fernandez et al., 2018, p. 388).
Radical innovation Incremental innovation
Partner characteristics High innovation degree,
high risks and costs
Low innovation degree, low
risks and costs
Organizational design Coopetive project team Separated project team
Benefits of organizational design High knowledge sharing,
but opportunism risk
Low knowledge sharing, low
opportunism risk
Table 12 Types of coopetive innovation projects based on Fernandez et al. (2018, p. 390)
Radical coopetive innovation projects, according to Fernandez et al. (2018, p. 389), can be
applied strategies for containing higher learning potential between competitors compared to
strategic alliances by exchanging complementary resources and knowledge. However,
Fernandez et al. (2018, p. 389) claim that radical innovation projects might be more costly and
risky. Furthermore, Fernandez et al. (2018, p. 389) point out that the organizational design in
radical innovation projects consists of various project managers that operate together in a
coopetive project team in which the risk of opportunism might be high. On the contrary,
Fernandez et al. (2018, p. 389) highlight that incremental coopetive innovation projects might
99
involve less technological adaptations than radical ones and might involve less costs and risks
caused through a lower level of complexity and knowledge exchange. Nevertheless,
Fernandez et al. (2018, p. 389) argue that incremental innovation projects may not require
partnering companies to co-develop innovation capabilities together and therefore, they might
be able operate through separate project teams which can lead to a low level of opportunistic
behaviour between alliance partners.
In general, the provided information in this subchapter concerning organizational outcomes of
strategic alliances as antecedents for value creation of companies engaged in strategic
alliances. Nevertheless, the following sections stress financial performance outcomes in line
with competitiveness of companies participating in strategic alliances including market and
efficiency related performance measurements.
5.2 Financial performance outcomes of strategic alliances
Apart from possible organizational outcomes of strategic alliances as acquisition of specific
resources, knowledge development, inter-organizational learning and increased innovation
performance, according to Kohtamäki et al. (2018, p. 196), a company can gain market and
financial performance outcomes which is discussed in this subchapter. Furthermore, Jiang and
Li (2008, p. 367) argue that inter-organizational learning within strategic alliances can support
interfirm knowledge exchange between partners which might in turn improve the financial
performance of partnering companies. Moreover, Jiang and Li (2008, p. 372) point put that
inter-organizational learning between alliance partners can facilitate the development of
products and technologies, manufacturing processes or market competencies. Hence, Jiang
and Li (2008, p. 373) claim that through inter-organizational learning between companies in
strategic alliances, the sales, efficiency, and profitability of companies can be increased.
Accordingly, Liu et al. (2010, p. 237) emphasise that the development of knowledge which
was gathered from strategic alliance partners can support the growth of a company in forms
of enhanced market performance and increased financial performance. In this regard,
Kohtamäki et al. (2018, p. 196) argue that possible financial performance outcomes of strategic
alliances can be classified into:
• Market performance (Ritala 2012; Wang et al., 2015)
• Sales level (Christofferson 2013; Min & Joo 2016))
• Profitability (Marciukaityte et al., 2009; Callahan et al., 2013)
100
5.2.1 Market performance
Ritala (2012, p. 309) emphasises that a company might aim to enhance the performance of
the current market or generating new markets through forming a strategic alliance with
competitors, which can be enabled through developing incremental or radical innovations
together. According to Wang et al. (2015, p. 1929), through integrating technological and
intellectual resources from alliance partners, innovation capabilities can be developed for
improving market performance. Consequently, concerning the dynamic capability view, Wang
et al. (2015, p. 1929) argue that three dynamic capability resources can facilitate external
collaborations for enhancing market performance of companies:
• Innovation capability
• Information capability
• Relational capability
Mishra and Shah (2009, p. 328) state that new product development in strategic alliances can
increase competitiveness and market performance of products. Furthermore, Mishra and Shah
(2009, p. 328) claim that the company Boeing, for instance, has collaboratively developed their
airplane Boeing 787 Dreamliner through an alliance with at least 50 partners which has led to
an increased market performance. Hence, Kotha and Srikanth (2013, p. 47) argue that the
company Boeing decided to seek strategic alliance partners to share risks through financial
support to establish and market the airplane and they only paid their partners after delivering
the airplanes to its customers. Moreover, according to Kotha and Srikanth (2013, p. 47), risk-
sharing among the alliance partners from Boeing might have increased the incentives of the
partners to finish their tasks effectively and to support Boeing to sell the 787 Dreamliner in their
respective markets. Eventually, Kotha and Srikanth (2013, p. 47) stress that the company
Boeing provided each alliance partner with specifications concerning performance metrics
which they were requested to meet where the alliance partners became a direct responsibility
to finish the tasks efficiently.
Correspondingly, Ritala (2012, p. 313) emphasises that strategic alliances with competitors
might require a coopetition strategy to mitigate a potential risk of strong competition between
rivals. An example where such a situation emerged, according to Ritala (2012, p. 313), can be
given by the company Sony with their Blue-Ray consortium faced a conflict with Toshiba that
led the HD-DVD industry. Ritala (2012, p. 313) claim that the strategy of Sony was to
collaborate with various competing companies such as Samsung, Hitachi and Phillips to
develop a Blue-Ray solution at an industry standard which enabled them to enhance their
market performance by combining their knowledge base with specific external knowledge to
101
their increase innovation performance. Thus, Ritala (2012, p. 315f) argues that companies who
are sharing costs and risks with strategic alliances partners which are competitors can enhance
the collective innovation performance and can reach a higher market share.
Consequently, Wang et al. (2015, p. 1929f) state that the innovation capability of companies
might support the evaluation and absorption process of external resources from strategic
alliance partners for increasing efficiency strategic alliances. Furthermore, Wang et al. (2015,
p. 1930) claim that external strategic alliance partners might require an information
infrastructure to access qualitative data for the collaboration to ensure information sharing for
an effective collaboration and market performance. Moreover, Wang et al. (2015, p. 1930)
emphasise that to generate protection against opportunism, relational capability can enable
the exchange of specific tactic knowledge between companies to guarantee an efficient and
fair collaboration. Thus, Wang et al. (2015, p. 1931) point out that market performance of
strategic alliances can be related to the penetration and generation of markets, improvement
in quality of products or services, and increased satisfaction of customers. Eventually, Wang
et al. (2015, p. 1931) argue that from newly generated markets or products, the market share
of collaborating companies can be increased through greater customer loyalty and satisfaction,
which might in turn also increase sales and can decrease costs for customer retention and
acquisition.
Basically, this subchapter intends to allocate a basic comprehension for a reader on how
organizational outcomes are coherent with market performance of companies engaged in
strategic alliances. However, the next subchapter emphasises on the sales level of companies
participating in strategic alliances as a performance outcome related to competitiveness as the
main intention of this master’s thesis.
5.2.2 Sales level
Min and Jo (2016, p. 101) claim that strategic alliances might be formed to mitigate potential
risk and introduce cost savings through shared operating, maintenance and marketing costs
in which companies can increase their sales through a high-level of cooperation between the
strategic alliance partners. Furthermore, Min and Joo (2016, p. 101f) state that companies in
the airline industry might strive to form a strategic alliance with other companies to increase
their competitiveness, potential revenues and to decrease costs. Apart from organizational and
market performance outcomes through strategic alliances, Kohtamäki et al. (2018, p. 195)
argue that companies might be able to increase their sales by collaborating with other
companies.
102
Consequently, Christofferson (2013, p. 69) emphasises that the firm-specific performance of
strategic alliances can be measured through three different types of measurement:
• Subjective measures
• Accounting measures
• Cumulative abnormal return
Christofferson (2013, p. 69) points out that subjective performance measures include
measures that comprise the overall satisfaction and accomplishment of strategic alliance
partner goals and objectives including sales and market growth, reputation, and development
of new technologies. Performance measures that are based on financial data, according to
Christofferson (2013, p. 70), can be applied to calculate percentages of growth and financial
ratios for measuring the financial performance of strategic alliance partners concerning their
specific goals and objectives. Furthermore, Christofferson (2013, p. 70) states that cumulative
abnormal return refers to performance measures determining how shareholders from alliance
partners react to the alliance formation. Thus, Christofferson (2013, p. 70) claims that
shareholders might assess if strategic alliances are generating or destroying shareholder
value.
In relation to the financial performance measures of strategic alliances, Wang et al. (2015, p.
1931) have provided a study of 500 randomly selected companies from the manufacturing
sector in China which focuses on the financial effectiveness of collaborations between
companies in turbulent markets. The financial performance, according to Want et al. (2015, p.
1932), was categorized by sales, profit growth and profitability through innovation capabilities.
For measuring the financial performance through collaboration, Wang et al. (2015, p. 1932)
received useful responses from 235 companies via interviews in which the financial
performance was assessed through a comparison with major competitors over three years.
Hence, Wang et al. (2015, p. 1932) stress that profitability was selected from the participants
as the most critical financial performance factor that could be enhanced through collaborating
with other companies. Eventually, Wang et al. (2015, p. 1932) argue that regarding possible
sales and profit growth through collaboration, most of the participants responded that that they
could increase their sales and profits due to better market performance.
Similarly, to measure the operating efficiency of strategic alliances in the airline industry, Min
and Joo (2016, p. 102) applied a data envelopment analysis model for analysing input and
output factors. Thus, Min and Joo (2016, p. 103) point out that secondary traffic and financial
data from selected airlines of global strategic alliances such as SkyTeam, Star Alliance,
103
Oneworld were selected including two input variables and four output variables. Furthermore,
Min and Joo (2016, p. 103) state that input variables were determined as operating expenses
and underutilization, whereas the output factors were operating revenue, passenger numbers,
service rating and revenue passenger kilometres (RPK) which is a common measure of the
sales level in the airline industry. For examining a possible influence of strategic airline
alliances on the airline competitiveness and operational efficiency, Min and Joo (2016, p. 106)
have analysed the operational efficiencies before and after joining a strategic alliance of three
well-known airlines, illustrated in the Table 13 below.
American Airlines Delta Air Lines United Airlines
Strategic alliance Oneworld Sky Team Star Alliance
Ranking sum before
joining alliance
115
(1986-1998)
78
(1988-1999)
66
(1986-1996)
Ranking sum after
joining alliance
236
(2000-2012)
222
(2001-2012)
187
(1998-2008)
Table 13 Efficiency ranking before and after joining strategic alliances based on Min and Joo (2016, p. 108)
Min and Joo (2016, p. 108) emphasise that input and output variables of American Airlines,
Delta Air Lines and United Airlines were analysed through an equal time span before and after
joining the different strategic alliances to measure the operational efficiency. Furthermore, Min
and Joo (2016, p. 108) point out that American Airlines showed a sum of rankings before
entering the strategic alliance Oneworld of 115 during a 13 year time span and has got worsen
between the year 2000 and 2012 to 236, which indicates a performance decrease. Moreover,
Min and Joo (2016, p. 108) highlight that Delta Air Lines had a ranking sum of 78 the 12 years
before joining the alliance, but also decreased their operational efficiency ranking to 222 after
joining the alliance. United Airlines, according to Min and Joo (2016, p. 108) showed a sum of
rankings of 66 before entering the strategic alliance between 1986-1996, which raised to 187
the following 11 years. Hence, Min and Joo (2016, p. 109) claim that a strategic alliance alone
in the airline industry might not improve the profit margins of an airline to increase
competitiveness.
Predominantly, the information provided regarding sales level of companies participating in
strategic alliances aims examine the potential of value creation through strategic alliances.
Nevertheless, the following subchapter aims to examines efficiency of strategic alliances in
form of financial performance measurements of companies engaged in strategic alliances.
104
Hence the next section in this master’s thesis emphasises on profitability of companies by
joining strategic alliances.
5.2.3 Profitability
According to Terjesen et al. (2011, p. 109), the return on assets (ROA) can be applied to
measure profitability in strategic alliances. Furthermore, Terjesen et al. (2011, p. 109) point out
that profitability performance measures of strategic alliances can include return on sales (ROS)
which refer to the operating profit in relation to sales. Moreover, Terjesen et al. (2011, p. 112)
claim that low operating costs and a high quality of products can positively influence sales,
return on assets and the return on sales of companies in strategic alliances through mutual
manufacturing capabilities in high technology industries. Hence, Callahan et al. (2013, p. 221)
emphasise the financial performance measure ROA can be defined as the operating income
before the depreciation which is proportioned through all assets. Eventually, Callahan et al.
(2013, p. 221) argue that companies that join strategic alliances with the aim of decreasing
costs and enhancing sales, can lead reach higher ROA. Thus, the financial performance
measure ROA can be defined as the operating income before the depreciation which is
proportioned through all assets.
Regarding the transaction cost theory, Marciukaityte et al. (2009, p. 1197) note that companies
might strive to join or establish strategic alliances to improve the decision-making process and
to minimize costs. Furthermore, Marciukaityte et al. (2009, p. 1197) argue that strategic
alliances might be a signal that participating companies have a good reputation and may imply
that companies can improve their profitability allowing them to outperform non-alliance
companies. For determining the profitability and efficiency of strategic alliances, Table 14
below illustrates the ratios of sales to total assets, profit margin and return on assets from
financial service companies such as insurance service, banking and investment companies
(Marciukaityte et al., 2009, p. 1197).
105
Sales to assets Profit margin Return on assets
3 years before alliance 11,68% 9,94% 1,11%
2 years before alliance 12,06% 10,31% 1,15%
1 year before alliance 11,86% 10,12% 1,16%
During alliance foundation 12,12% 10,35% 1,15%
1 year after alliance 11,91% 9, 98% 1,09%
2 years after alliance 11,81% 10,29% 1,15%
3 years after alliance 11,87% 10,55% 1,18%
Table 14 Profitability of financial service alliances based on Marciukaityte et al. (2009, p. 1197)
The findings of Marciukaityte et al. (2009, p. 1197) demonstrate a small increase in the return
on asset (0,05%) and profit margin (0,57%) in the 3 years before announcing the strategic
alliance, whereas the sales to asset ratio deteriorated. Hence, Marciukaityte et al. (2009, p.
1197) point out that after announcing the strategic alliance, the companies continued to face a
decline in the sales to assets ratio and an increase in the profit margin which resulted in no
significant changes concerning the return on assets. However, Marciukaityte et al. (2009, p.
1198) note that strategic alliances between financial service companies might have lower
returns on assets compared to non-alliance companies. Nevertheless, Marciukaityte et al.
(2009, p. 1199) claim that the operating performance of financial service companies can
increase after the alliance announcement, however compared to the industry benchmark of
non-alliance companies the increase might be small.
Correspondingly, Callahan et al. (2013, p. 221) stress that the operating ROA performance of
companies that are operating in the high-tech industries can be enhanced through strategic
alliances with stakeholders. Callahan et al. (2013, p. 221) have examined the operating
performance of 634 companies in the high-tech industry concerning their operating ROA of
partnering and non-partnering companies between 1988 and 2004 in their study. Furthermore,
Callahan et al. (2013, p. 223) have analysed the operating ROA performance of companies in
relation to research and marketing alliances from different fields. Thus, Callahan et al. (2013,
p. 223) argue that companies engaged in research alliances, who operate in the
pharmaceutical and biotech industry, could increase operating ROA significantly after the
joining research alliances. However, Callahan et al. (2013, p. 223) emphasise that companies
106
engaged in research alliances, who operate in the computer and electronics manufacturing
industry, could not increase their performance after joining research alliances. Nevertheless,
Callahan et al. (2013, p. 224) claim that companies engaged in marketing alliances, who
operate in pharmaceutical and biotech fields and in the computer and electronics
manufacturing industry, could not increase their ROA after joining marketing alliances.
Fundamentally, the information stated in this chapter concerning financial performance
outcomes of strategic alliances aims to provide an examination of competitiveness of
companies participating in strategic alliances by monetary measurements. Nevertheless,
negative outcomes for companies engaged in strategic alliances are provided in the next
subchapter for explaining how inefficiencies in strategic alliances arise and how failures can
be avoided.
5.3 Negative outcomes of strategic alliances
Apart from positive performance outcomes by strategic alliances, Chao (2011, p. 351) argue
that companies engaged in strategic alliances may obtain negative outcomes, as the alliance
failure rate might be high. Furthermore, Chao (2011, p. 351) emphasises that failure of
strategic alliances might be related to termination, dissolution, and divestment. Hence,
according to Chao (2011, p. 354), strategic alliances may fail through single outcome
calculation of strategic alliance partners in making irrational decisions and in neglecting
possible alternatives concerning decision-making. Moreover, Boone and Ivanov (2012, p. 553)
state that partners in strategic alliances, through opportunistic behaviour might operate
insufficiently or expropriate a disproportional extensive share of collective generated value.
However, Bone and Ivanov (2012, p. 553) claim that contracts between strategic alliance
partners might allow them leaving the cooperative relationship through a fee payment.
Eventually, Bone and Ivanov (2012, p. 553) highlight that the dissolution of strategic alliances
may arise when costs related to continue cooperation exceed anticipated costs.
According to Gulati et al. (2012, p. 534), strategic alliance failures can arise by a refusal of
strategic alliance partners to contribute equally for reaching collective defined goals.
Furthermore, Gulati et al. (2012, p. 534) emphasise that that negative impacts as
misappropriation of mutual generated value might emerge in strategic alliances between
alliance partners, which can lead to alliance dissolution. Moreover, Gulati et al. (2012, p. 535)
point out that strategic alliance partners basically remain individualistic entities with distinct and
potential inconsistent objectives. As a result, Gulati et al. (2012, p. 536) stress that through
strategic alliance failures, companies can receive negative outcomes in form of financial and
reputational damages. Gulati et al (2012, p. 548) argue that companies participating in strategic
107
alliances can obtain further negative outcomes as resource leakage of specific knowledge in
relation to unclear property rights. Thus, Gulati et al. (2012, p. 548) claim that leakage of
specific knowledge can create a risk of imitation for companies in strategic alliances by other
alliance partners.
Correspondingly, Varma et al. (2015) have examined cross-border joint ventures concerning
performance outcomes in their research study. Therefore, Varma et al. (2015, p. 432) have
analysed a strategic alliance between the company NTT Docomo from Japan and Tata
Teleservices Limited from India in the telecom market, which was established 2008 for
transferring technologies and capital. According to Varma et al. (2015, p. 434), the joint venture
suffered issues in the year 2010 concerning 2G internet licence in India. Furthermore, Varma
et al. (2015, p. 434) state that the net worth of the strategic alliance was entirely destroyed
through the termination of licenses of 2G internet. Moreover, Varma et al. (2015, p. 437) claim
that the joint venture between the two companies had an early dissolution because of varying
strategic objectives and cultural differences.
Accordingly, Varma et al. (2015, p. 437) highlight that strategic alliance partners had varying
perceptions concerning the time horizon for breaking even, where the Japanese company
wanted to profit earlier that the Indian company. Hence, Varma et al. (2015, p. 437) argue that
alliance partners from Japan claimed about a lack of punctuality of the Indian partner regarding
deliveries and meetings. Furthermore, Chattopadhyay and Bhawsar (2016, p. 312) conclude
that the company Tata Teleservices Limited from India had to buy out of the joint venture and
lost a lot of money. Moreover, Chattopadhyay and Bhawsar (2016, p. 315f) highlight that the
Indian alliance partner failed to operate profitable in the mobile telephony industry.
Nevertheless, Chattopadhyay and Bhawsar (2016, p. 316) argue that the strategic alliance
was not able to exploit its technological strengths, where the relationship between the two
companies can have socially and political impacts. Thus, Chattopadhyay and Bhawsar (2016,
p. 316) claim that a possible negative outcome by strategic alliances may be a negative
spillover affect due to this strategic alliance which might have a harmful impact on future
strategic alliances between Japan and China.
Finally, this chapter provided profound information regarding outcomes of strategic alliances
through collaboration between companies in a positive and negative way. Furthermore, the
information stated in the last subchapter concerning negative outcomes due to strategic
alliances aims to provide an understanding on how companies are affected by participating in
strategic alliances. Thus, this master’s thesis has provided an overview on how strategic
alliances affect competitiveness of companies in relation to success and failure by
108
collaborating. Nevertheless, negative outcomes were also examined in this master’s thesis to
illustrate consequences of strategic alliance failure.
6. Conclusion
The last chapter of this master’s thesis provides the curious reader a summary of the main
findings concerning the definition and process of strategic alliances. Furthermore, the main
findings of the management of strategic alliances, the importance of strategic alliances for
innovation and competitiveness through strategic alliances are illustrated, and the research
questions are answered. Finally, a future outlook identifies potential research gaps within the
field of strategic alliances and points out possible future directions of research.
6.1 Summary of main findings
According to Gulati (1998, p. 2939), strategic alliances refer to cooperative agreements
between organizations aiming to exchange resources for enhancing the performance of
products. Nevertheless, Agarwal et al. (2010, p. 414f) argue that companies joint strategic
alliances for distinct reasons leading to potential risks for strategic alliances partners regarding
property rights and free riding. Hence, the authors Muthoka et al. (2016) have applied various
theoretical lenses to explain to rational of companies to establish strategic alliances related to
cost reduction, resource exchange and enhanced competitiveness. In order to expound distinct
reasons of companies to engage in strategic alliances, this master’s thesis has examined
following theoretical foundations:
• Resource-based view
• Dynamic capabilities approach
• Knowledge-based view
• Transaction cost theory
• Network perspective
• Game theory
The examination of the theoretical foundations relating to strategic alliances has demonstrated
that possible expected outcomes can vary among the different theoretical foundations, while
the potential risks for strategic alliances such as issues of property rights, opportunistic
behaviour and a lack of trust can be related to all theories (Agarwal et al., 2010; Anand et al,
2010; Wassmer & Dussage, 2011). In line with the network perspective, the researchers
Zaheer et al. (2010) have identified that companies use strategic alliances as a source of trust
and power, and to access resources. The researchers Lin and Wu (2014) have revealed that
companies aim to increase competitiveness by accessing specific resources to develop
109
dynamic capabilities. However, Russo and Cesarani (2017, p. 2) outline that, regarding the
transaction cost theory, strategic alliance partners aim to reduce risks by sharing equity.
Furthermore, in line with the knowledge-based view, the researchers Russo and Cesarani
(2017) have expounded that companies aim to learn from strategic alliances partners by
exchanging resources to develop dynamic capabilities.
A conceptional framework of the strategic alliance formation process has been provided by
Mitsuhashi (2002) which initiates with the definition of alliance opportunities, identifying
prospective partners, arrangement of contracts, due diligence processes, and making a deal.
Before finalizing a deal, the most adequate governance structure of a strategic alliances is
selected, where the researchers Culpan (2008) have distinguished into equity and non-equity
alliances. Thus, according to Teng and Das (2008, 727), governance structures of strategic
alliances are distinguished in this master’s thesis into joint ventures, minority equity alliances
and contractual alliances. The authors Das and Teng (2008) have revealed in their quantitative
research study that equity alliances as joint ventures are the most cooperative form of alliance
governance structures as a new entity is established. Nevertheless, the quantitative research
study of Sompong et al. (2014) has shown that companies have various motives to join
strategic alliances related to access of resources, increased market share, enhanced
profitability, and development of technologies, which requires adequate alliance governance
structures.
The management of global strategic alliances as described in this master’s thesis comprises
partner selection, examining critical success factors and challenges arising through
collaborating. The management of strategic alliances for creating value require accomplishing
critical success factors provided by Kanungo (2015) which includes common culture
orientation, mutual trust and commitment, open and interactive communication, and
collaboration with competitors. Accordingly, a global strategic alliance partner selection
process is provided in this master’s thesis by Wang et al. (2018) in the aerospace industry
including three phases as initializing data, prediction and decision-making of prospective
alliance partners. Nevertheless, Kang et al. (2014) have revealed that half of all strategic
alliance fail to create value. The researchers Kang et al. (2014, p. 1128) have identified
consequences of strategic alliance failure as uncompensated information and technology
transfer, loss of revenue and reputation issues.
A central factor for companies to increase the competitiveness through strategic alliances has
been identified in this master’s thesis through innovative abilities, where Zahra and George
(2002) have revealed the relationship of external knowledge sources and absorptive capacity
110
of companies to enhance the innovative performance through strategic alliances. Based on
cooperative mechanisms to enhance the innovative performance, Lichtenthaler (2011) has
identified a dedicated inflow and outflow of knowledge to expedite the internal innovation
performance of companies through an open innovation strategy with other partners. However,
the researchers Zhang et al. (2010) have provided another approach for expediting the internal
innovation performance of companies by cooperating with competitors through acquiring and
generating knowledge mutually. Thus, Li et al. (2019, p. 5065) argue that companies gain
innovative abilities by accessing new technologies, knowledge, and expertise through strategic
alliances.
Performance outcomes of strategic alliances, according to Gulati (1998) are difficult to
measure with only financial indicators through multifaceted of strategic alliance partners.
Hence, this master’s thesis was intended to explore research literature concerning
competitiveness in relation to strategic alliances, where Kohtamäki et al. (2018) have
categorized possible outcomes of strategic alliances into:
• Organizational outcomes
o Resource accumulation, knowledge generation and innovation performance
• Financial performance outcomes
o Market performance, sales level, profitability
In order to answer the research questions in this master’s thesis, this categorization has been
adopted to classify the research literature concerning performance outcomes of strategic
alliances in which the subcategories have been adapted to preserve a clear structure and to
facilitate adequate allocation. Thus, Ma et al. (2012) have identified in their research study that
accumulation of resources in strategic alliances increases competitiveness enabled by
increased innovativeness. Furthermore, Ma et al. (2012, p. 473) claim that by developing
products, market performance increases of companies engaged in strategic alliances.
The researchers Liu et al. (2010) distinguish the generation of knowledge in strategic alliances
into three key dimensions of alliance partners including trust, transparency, and interaction.
Furthermore, Lee et al. (2011) have identified that the articulation of knowledge through
codifiability, teachability and observability enhance the dynamic learning of strategic alliances
to generate dynamic capabilities. Hence, Ho et al. (2019) have identified difficulties during the
acquisition of knowledge for global strategic alliances in their quantitative research study. The
researchers Ho et al. (2019) have revealed that institutional distance between alliance partners
concerning the protection of firm-specific knowledge is a barrier for knowledge sharing.
111
Nevertheless, Ho et al. (2019, p. 446) argue that relational capital in strategic alliances
supports knowledge exchange between alliance partners.
Performance outcomes of strategic alliances in relation to innovation in this master’s thesis are
classified by Forés and Camisón, 2016 into radical and incremental innovations. Furthermore,
findings from the empirical research study of Cheng et al. (2016) indicate a positive coherence
between radical innovation and knowledge generation in strategic alliances. Moreover, the
researchers Fernandez at al. (2018) have revealed that the coopetition strategy positively
influences the development of incremental and radical innovation. Nevertheless, Fernandez et
al. (2018, p. 389) claim that radical innovation projects with competitors are more costly and
bear more risks. Thus, research concerning innovation performance in this master’s thesis has
shown that competitiveness of strategic alliances is positively related to development of radical
innovation enabled by cooperating with competitors.
Possible financial performance outcomes of strategic alliances are distinguished in this
master’s thesis into market performance, sales level, efficiency, and profitability (Kohtamäki et
al., 2018, p. 196). Thus, the research study of Ritala (2012, p. 309) found that strategic
alliances with competitors are positively related to enhanced market share as it was the case
with the company Sony to cooperate with various competing companies such as Samsung and
Phillips. Furthermore, with respect to market performance of strategic alliances, Wang et al.
(2015) have investigated the effects of external collaboration effectiveness through absorptive
capacity of strategic alliances on market performance. The researchers Wang et al. (2015)
have revealed a significant positive relationship between absorptive capacity and increased
market share by developing products and services. Hence, absorptive capacity has been
identified in this master’s thesis as a crucial element in order to enhance competitiveness of
companies engaged in strategic alliances.
The researchers Marciukaityte et al. (2009) have examined the operating performance of
strategic alliances of financial and insurance service companies, where they have revealed a
slight improvement of the return of sales and profit margins of companies engaged in strategic
alliances. At the same time, Callahan et al. (2013) have investigated the profitability of strategic
alliances through ROA performance and have revealed that companies engaged in strategic
could not significantly increase their operating ROA. On the contrary, the researchers Wang
et al (2015) have revealed that enhanced market performance of strategic alliances positively
influences sales level.
Nevertheless, apart from positive outcomes by strategic alliances, the researchers Gulati et al.
(2012) have identified negative outcomes for companies engaged strategic alliances. As a
112
consequence of strategic alliance failure, Gulati et al. (2012) have revealed that companies
receive financial and reputational damages. Furthermore, according to Gulati et al. (2012, p.
548), companies might obtain negative outcomes by participating in strategic alliances as
resource leakage of specific knowledge and unclear property rights which create the risk of
imitation from other strategic alliance partners.
In conclusion, the mixed results in this master’s thesis concerning success and failure of
strategic alliances indicate that possible outcomes of for companies engaged in strategic
alliances are positive and negative related. Furthermore, outcomes generated by strategic
alliances, regarding the examination in this master’s thesis, have revealed that
competitiveness of companies participating in strategic alliances is influenced both positively
and negatively. Hence, mixed results indicate that more research studies are necessary
concerning strategic alliance success and failure for answering in more detail how the
competitiveness of companies is influenced by participating in strategic alliances. Ultimately,
this scientific work has provided a status quo of strategic alliances, the importance of
innovation for competitiveness and outcomes for companies engaged in strategic alliances
concerning competitiveness.
6.2 Limitations
Although strategic alliances between organizations have increasingly obtained attention from
researchers and executives, the research area, according to Kohtamäki et al. (2018, p. 188),
exhibits some limitations especially concerning antecedents, processes, and outcomes of
strategic alliances. Thus, Kohtamäki (2018, p. 189) argue that the majority of research studies
of strategic alliances has focused on networks and relationships where various theoretical
perspectives are involved, however, the amount of empirical research studies is still limited.
This master’s thesis has compared several theoretical foundations of strategic alliances in
order to explain several incentives of companies engaging in strategic alliances, where results
of the comparison has been illustrated in Table 2. However, motives of companies to form
strategic alliances and different governance structures concerning the formation process are
in this regard sufficiently researched. Nonetheless, the partner selection process, critical
success factors and challenges in managing global strategic alliances have already a broad
base of research papers but there is still a lack of empirical research papers regarding success
and failure factors of multinational companies engaging in strategic alliances.
Despite an increasing interest of scholars on theoretical perspectives and the management of
strategic alliances, various gaps have been identified by Zahoor and AL-Tabbaa (2020). In
their research study, Zahoor and AL-Tabbaa (2020) have revealed that there is lack of
113
research literature concerning resource exchange in strategic alliances and innovation
outcomes. Furthermore, the researchers Zahoor and AL-Tabbaa (2020) have identified a
research gap regarding effects of innovation for competitiveness in strategic alliances for
understanding possible returns from innovations for participating companies. At the same time,
the research study of Klein et al. (2020) has revealed that prior research on outcomes of
strategic alliances primarily focus on interorganizational learning and innovation. However,
Klein et al. (2020, p. 11) emphasise that research literature on the impact of strategic alliance
outputs on competitiveness of participating companies is insufficient. According to Rajan et al.
(2020, p. 364), research on the termination of strategic alliances is still insufficient. Hence, the
researchers Rajan et al. (2020) have revealed that there is a gap in research literature
regarding negative outcomes of strategic alliances.
Conclusively, this master’s thesis has identified that there is a controversy among researchers,
weather strategic alliances lead to increased competitiveness or not. Additionally, research
literature is not directly comparable in regard to industries, size of the samples and measurable
performance outcomes. As a result, more research literature in this field might be necessary
for answering more precise how strategic alliances affect competitiveness of participating
companies. For providing a systematic synopsis of strategic alliance outcomes, this master’s
thesis has applied a classification from Kohtamäki (2018) to distinguish various research
findings to their appropriate category, where the interested reader can get an overview of the
strategic alliance research findings in terms of competitiveness.
114
7. References
Abdulla, N. A. H. N., Ghasham, A. A. N. & Ghani, N. H. A. (2015). The Degree of Cooperation
in International Strategic Alliances and Value Creation Outcomes: Empirical Study on Service
Firms in Yemen. Asian Social Science, Vol. 11, No. 28, 116-126.
http://dx.doi.org/10.5539/ass.v11n28p116
Agarwal, R., Croson, R. T. A. & Mahoney, J. T. (2010). The role of incentives and
communication in strategic alliances: An experimental investigation. Strategic Management
Journal, Vol. 31, No. 4, 413-437. https://doi.org/10.1002/smj.818
Aggarwal, R., Kearney, C., Lucey, B. (2012). Gravity and culture in foreign portfolio investment.
Journal of Banking and Finance, Vol. 36, Issue 2, 525-538.
https://doi.org/10.1016/j.jbankfin.2011.08.007
Anand, J., Oriani, R. & Vassolo R. S. (2010). Alliance Activity as a Dynamic Capability in the
Face of a Discontinuous Technological Change. Organization Science, Vol. 21, No. 6, 1213-
1232. https://doi.org/10.1287/orsc.1090.0502
Beamish, P. W. & Lupton, N. C. (2016). Cooperative strategies in international business and
management: Reflections on the past 50 years and future directions. Journal of World
Business, Vol. 51, Issue 1, 163-175. https://doi.org/10.1016/j.jwb.2015.08.013
Bianchi M., Cavaliere, A., Chiarone, D., Frattini, F. & Chiese, V. (2011). Organisational modes
for Open Innovation in the bio-pharmaceutical industry: An exploratory analysis. Technovation,
Vol. 31, Issue 1, 22-33. https://doi.org/10.1016/j.technovation.2010.03.002
Boone, A. L. & Ivanov, V. I. (2012). Bankruptcy spillover effects on strategic alliance partners.
Journal of Financial Economics, Vol. 103, Issue 3, 551-569. https://doi.org/
10.1016/j.jfineco.2011.10.003
Borgatti, S. P. & Foster, P. C. (2003). The Network Paradigm in Organizational Research: A
Review and Typology. Journal of Management, Vol. 29, Issue 6, 991-1013.
https://doi.org/10.1016/S0149-2063_03_00087-4
Bouncken, R. B. & Kraus, S. (2013). Innovation in knowledge-intensive industries: The double-
edged sword of coopetition. Journal of Business Research, Vol. 66, Issue 10, 2060-2070.
https://doi.org/10.1016/j.jbusres.2013.02.032
115
Callahan, C. M., Smith, R., Spencer, A. W. (2013). The Long-Term Performance
Consequences of Strategic Partnerships in High Tech Industries. Journal of Applied Business
Research, Vol. 29, No. 1, 217-234. https://doi.org/10.19030/jabr.v29i1.7569
CEFAGE. (2015, November). CEFAGE Journal Ranking 4th Edition 2016-2019. Center for
Advanced Studies in Management and Economics. Retrieved from
http://www.cefage.uevora.pt/en/scientific_resources/ranking_de_revistas_cientificas
Cesarani, M. (2014). Competitive Dimension of Outsourcing Relations in Global Networks.
Journal of Management Policies and Practices, Vol. 2., No. 4, 97-112.
https://doi.org/10.15640/jmpp.v2n4a5
Chao, Y. C. (2011). Decision-making biases in the alliance life cycle: Implications for alliance
failure. Management Decision, Vol. 49, Nr. 3, 350-364.
https://doi.org/10.1108/00251741111120743
Chattopadhyay, U. & Bhawasar, P. (2016). Instabilities in international joint ventures: a study
of the Tata DoCoMo case. International Journal of Entrepreneurship and Innovation
Management, Vol. 20, No. 5/6, 300-319. https://doi.org/10.1504/IJEIM.2016.080009
Chen, S. H., Lee, H. T. & Wu, Y. F. (2008). Applying ANP approach to partner selection for
strategic alliance. Management Decision, Vol. 46, No. 3, 449-465.
https://doi.org/10.1108/00251740810863889
Cheng, C. C. J., Yang, C. & Sheu, C. (2016). Effects of open innovation and knowledge-based
dynamic capabilities on radical innovation: An empirical study. Journal of Engineering and
Technology Management, Vol. 41, 79-91. https://doi.org/10.1016/j.jengtecman.2016.07.002
Choi, J. (2020). Mitigating the Challenges of Partner Knowledge Diversity while enhancing
Research & Development (R&D) Alliance Performance: The Role of Alliance Governance
Mechanisms. Journal of Product Innovation Management, Vol. 37, Issue 1, 26-47.
https://doi.org/10.1111/jpim.12505
Christofferson, J. (2013). A Review of Antecedents of International Strategic Alliance
Performance: Synthesized Evidence and New Directions for Core Constructs. International
Journal of Management Reviews, Vol. 15, Issue 1, 66-85. https://doi.org/10.1111/j.1468-
2370.2012.00335.x
116
Cohen, W. M. & Levinthal, D. A. (1990). Absorptive Capacity: A New Perspective on Learning
and Innovation. Administrative Science Quarterly, Vol. 35, No. 1, 128-152.
https://doi.org/10.1016/j.respol.2018.01.017
Cui, A. S. & O’Connor, G. (2012). Alliance Portfolio Resource Diversity and Firm Innovation.
Journal of Marketing, Vol. 76, No. 4, 24-43. https://doi.org/10.1509/jm.11.0130
Cullen, J. B., Johnson, J. J. & Sakano, T. (2000). Success Through Commitment and Trust:
The Soft Side of Strategic Alliance Management. Journal of World Business, Vol. 35, Issue 3,
223-240. https://doi.org/10.1016/S1090-9516(00)00036-5
Culpan, R. (2008). The role of strategic alliances in gaining sustainable competitive advantage
for firms. Management Review, Vol. 19, No. 1, 94-105.
https://doi.org/10.5771/0935-9915-2008-1-2-94
Cummings, J. L. & Holmberg, S. R. (2012). Best-fit Alliance Partners: The Use of Critical
Success Factors in a Comprehensive Partner Selection Process. Long Range Planning, Vol.
45, Issues 2-3, 136-159. https://doi.org/10.1016/j.lrp.2012.01.001
Dacin, M. T., Hitt, M. A. & Levitas, E. (1997). Selecting partners for successful international
alliances: Examination of U.S. and Korean firms. Journal of World Business, Vol 32. Issue 1,
3-16. https://doi.org/10.1016/S1090-9516(97)90022-5
Das, T. K. & Teng, B. S. (1998). Between Trust and Control: Developing Confidence in Partner
Cooperation in Alliances. Academy of Management Review, Vol. 23, No. 3, 491-512.
https://doi.org/10.5465/amr.1998.926623
Das, T. K. & Teng, B. S. (1999). Managing Risks in Strategic Alliances. Academy of
Management Executives, Vol. 13, No. 4, 50-62. https://www.jstor.org/stable/4165586
Das, T. K. & Teng, B. S. (2000). A Resource-Based Theory of Strategic Alliances. Journal of
Management, Vol. 26, No. 1, 31-61. https://doi.org/10.1016/S0149-2063(99)00037-9
Das T. K. & Kumar, R. (2010). Interpartner sensemaking in strategic alliances: Managing
cultural differences and internal tensions. Management Decision, Vol 48, No. 1, 17-36.
https://doi.org/10.1108/00251741011014436
117
Dekker, H. C. (2004). Control of Inter-Organizational Relationships: Evidence on Coordination
Requirements and Appropriation Concerns. Accounting, Organizations and Society, Vol. 29,
No. 1, 27-49. https://doi.org/10.1016/S0361-3682(02)00056-9
Doherty (2009). Market and partner selection processes in international retail franchising.
Journal of Business Research, Vol. 62, Issue 5, 529-534.
https://doi.org/10.1016/j.jbusres.2008.06.011
Doz, Y. & Hamel, G. (1998). Alliance Advantage: The Art of Creating Value through Partnering.
Boston, MA: Harvard Business School Press.
Elmuti, D. & Kathawala Y. (2001). An overview of strategic alliances. Management Decision,
Vol. 39, No. 3, 205-217. https://doi.org/10.1108/EUM0000000005452
Estelyiova, K. (2012). Governance Structure of Strategic Alliances: Evidences from the South
Moravian Region. Journal of Competitiveness, Vol. 4, Issue 2, 172-184.
https://doi.org/10.7441/joc.2012.02.12
Felin, T. & Zenger, T. R. (2014). Closed or open innovation? Problem solving and the
governance choice. Research Policy, Vol. 43, Issue 5, 914-925.
https://doi.org/10.1016/j.respol.2013.09.006
Feller, J., Parhankangas, A., Smeds, R. & Jaatinen, M. (2013). How Companies Learn to
Collaborate: Emergence of Improved Inter-Organizational Processes in R&D Alliances.
Organization Studies, Vol. 34, Issue 3, 313-343. https://doi.org/10.1177/0170840612464758
Fernandez, A. S., Le Roy, F. & Chiambaretto P. (2018). Implementing the right project structure
to achieve coopetitive innovation projects. Long Range Planning, Vol. 51, Issue 2, 384-405.
https://doi.org/10.1016/j.lrp.2017.07.009
Forés, B. & Camisón, C. (2016). Does incremental and radical innovation performance depend
on different types of knowledge accumulation capabilities and organizational size? Journal of
Business Research, Vol. 69, Issue 2, 831-848. https://doi.org/10.1016/j.jbusres.2015.07.006
Glaister, K. W. & Buckley, P. J. (1996). Strategic Motives for International Alliance Formation.
Journal of Management Studies, Vol. 33, Issue 3, 3001-332. https://doi.org/10.1111/j.1467-
6486.1996.tb00804.x
118
Globerman, S. & Nielsen, B. B. (2007). Equity versus non-equity international strategic
alliances involving Danish firms: An empirical investigation of the relative importance of partner
and host country determinants. Journal of International Management, Vol. 13, Issue 4. 449-
471. https://doi.org/10.1016/j.intman.2007.03.005
Grant, R. M. (1996). Toward a Knowledge-Based Theory of the Firm. Strategic Management
Journal, Vol. 17, Issue S2, 109-122. https://doi.org/10.1002/smj.4250171110
Grant, R. & Baden-Fuller, C. (2004). A Knowledge Accessing Theory of Strategic Alliances.
Journal of Management Studies, Vol. 41, No. 1, 61-84. https://doi.org/10.1111/j.1467-
6486.2004.00421.x
Greenhoot, A. F. & Dowsett, C. J. (2012). Secondary Data Analysis: An Important Tool for
Addressing Developmental Questions. Journal of Cognition and Development, Vol. 13, Issue
1, 2-18. http://dx.doi.org/10.1080/15248372.2012.646613
Gulati, R. (1998). Alliance and Networks. Strategic Management Journal, Vol.19, 293-317.
https://doi.org/10.1002/(SICI)1097-0266(199804)19:4<293::AID-SMJ982>3.0.CO;2-M
Gulati, R., Wohlgezogen, F. & Zhelyazkov, P. (2012). The Two Facets of Collaboration:
Cooperation and Coordination in Strategic Alliances. Academy of Management Annals, Vol. 6,
Issue 1, 531-583. https://doi.org/10.1080/19416520.2012.691646
Haeussler C., Patzelt, H. & Zahra, S. A. (2012). Strategic alliances and product development
in high technology new firms: The moderating effect of technological capabilities. Journal of
Business Venturing, Vol. 27, Issue 2, 217-233. https://doi.org/10.1016/j.jbusvent.2010.10.002
Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2016). Strategic Management: Concepts and
Cases: Competitiveness and Globalization. Cenage Learning, 1-896.
Ho, M. H.W., Ghauri, P. N. & Kafouros, M. (2019). Knowledge Acquisition in International
Strategic Alliances: The Role of Knowledge Ambiguity. Management International Review, Vol.
59, Issue 3, 439-463. https://doi.org/10.1007/s11575-019-00383-w
Hofstede, G. (1994). The Business of International Business is Culture. International Business
Review, Vol. 3, No. 1, 1-14. https://doi.org/10.1016/0969-5931(94)90011-6
119
Huang, F. & Rice, J. L. (2009). The Role of Absorptive Capacity in Facilitating ‘Open
Innovation’ Outcomes: A Study of Australian SMEs in the Manufacturing Sector. International
Journal of Innovation Management, Vol 13, No. 2, 201-220.
https://doi.org/10.1142/9781786343482_0019
Indradewa, R., Tjakraatmadja, J. H. & Dhewanto, W. (2015). Alliance strategy in an R&D
energy sector project: a knowledge-based view perspective. International Journal of
Knowledge Management Studies, Vol. 6, No. 4, 337-352.
https://www.doi.org/10.1504/IJKMS.2015.074141
Ji, H, & Huang, Y. (2010). A Research on Influential Factors Related to the Stability of
Competition-Oriented Strategic Alliances. International Journal of Business and Management,
Vo. 5, No. 11, 148-151. https://10.5539/ijbm.v5n11p148
Jiang, X. & Li, Y. (2008). The relationship between organizational learning and firms’ financial
performance in strategic alliances: A contingency approach. Journal of World Business, Vol.
43, Issue 3, 365-379. https://doi.org/10.1016/j.jwb.2007.11.003
Jiang, X., Yang, Y., Pei, Y. L. & Wang, G. (2016). Entrepreneurial Orientation, Strategic
Alliances, and Firm Performance: Inside the Black Box. Long Range Planning, Vol. 49, Issue
1, 103-116. https://doi.org/10.1016/j.lrp.2014.09.003
Judge; W. Q. & Dooley, R. S. (2006). Strategic Alliance Outcomes: A Transaction-Cost
Economics Perspective. British Journal of Management, Vol. 17, No, 1, 23-37.
https://doi.org/10.1111/j.1467-8551.2005.00441.x
Kang, I., Han, S., & Shin, G. C. (2014). A process leading to strategic alliance outcome: The
case of IT companies in China, Japan and Korea. International Business Review, Vol. 23,
1127-1138. https://doi.org/10.1016/j.ibusrev.2014.03.008
Kanungo, R. P. (2015). Learning success factors of strategic alliances and estimating under
an alternate specification. Journal of Investment Management and Financial Innovations, Vol.
12, Issue 3, 120-131.
Kauser, S. & Shaw, V. (2004). The Influence of Behavioral and Organizational Characteristics
on Success of International Strategic Alliances. International Marketing Review, Vol. 21, No.
1, 17-52. https://doi.org/10.1108/02651330410522934
120
Kelly, J., Sadeghieh, T. & Khosrow, A. (2014). Peer review in scientific publications: benefits,
critiques, & a survival guide. Journal of the International Federation of Clinical Chemistry and
Laboratory Medicine, Vol. 25, No. 3, 227-243.
Kim, J. & Parkhe, A. (2009). Competing and Cooperating Similarity in Global Strategic
Alliances: An Exploratory Examination. British Journal of Management, Vol. 20, Issue 3, 363-
376. https://doi.org/10.1111/j.1467-8551.2008.00580.x
Klein, K., Semrau, T., Albers, S. & Zajac, E. (2020). Multimarket coopetition: How the interplay
of competition and cooperation affects entry into shared markets. Long Range Planning, Vol.
53, Issue 1, 1-15. https://doi.org/10.1016/j.lrp.2019.02.001
Ko, Y. M. & Joo, H. J. (2013). Do Firms Need Strategic Alliances? International Journal of
Economics and Management Engineering, Vol. 7, No. 8, 2277-2280.
Kohtamäki, M., Rabetino, R. & Möller K. (2018). Alliance capabilities: A systematic review and
future research directions. Industrial Marketing Management, Vol. 68, 188-201.
https://doi.org/10.1016/j.indmarman.2017.10.014
Kotha, S. & Srikanth, K. (2013). Managing A Global Partnership Model: Lessons from the
Boeing 787 ‘Dreamliner’ Program. Global Strategy Journal, Vol. 3, Issue 1, 41-66.
https://doi.org/10.1111/j.2042-5805.2012.01050.x
Koza, M. P. & Lewin, A. Y. (1998). The Co-Evolution of Strategic Alliances. Organization
Science, Vol. 9, No. 3, Special Issue: Managing Partnerships and Strategic Alliances, 255-
264. https://doi.org/10.1287/orsc.9.3.255
Lambe, C. J., Spekman, R. E. & Hunt, S. D: (2002). Alliance Competence, Resources, and
Alliance Success: Conceptualization, Measurement, and Initial Test. Journal of the Academy
of Marketing Science, Vol. 30, Issue 2, 141-158. https://doi.org/10.1177/03079459994399
Lascaux, A. (2020). Coopetition and trust: What we know, where to go next. Industrial
Marketing Management, Vol. 84, 2-18. https://doi.org/10.1016/j.indmarman.2019.05.015
Lasserre, P. (2017). Global Strategic Management. Macmillan International Higher Education,
Fourth edition, 1-510.
121
Lee, P. Y., Chen, H. H., & Shyr, Y. H. (2011). Driving dynamic knowledge articulation and
dynamic capabilities development of service alliance firms. Service Industries Journal, Vol. 31,
Issue 13, 2223-2242. https://doi.org/10.1080/02642069.2010.504820
Leisen B., Lilly, B. & Winsor, R. D. (2002). The effects of organizational culture and market
orientation on the effectiveness of strategic marketing alliances. Journal of Services Marketing,
Vol. 16, Issue 3, 201-222. https://doi.org/10.1108/08876040210427209
Lew Y. K. & Sinkovics R. R. (2013). Crossing Borders and Industry Sectors: Behavioral
Governance in Strategic Alliances and Product Innovation for Competitive Advantage. Long
Range Planning, Vol. 46, Issues 1-2. 13-18. https://doi.org/10.1016/j.lrp.2012.09.006
Li, K, Qiu, J. & Wang, J. (2019). Technology Conglomeration, Strategic Alliances, and
Corporate Innovation. Management Science, Vol. 65, No. 11, 5065-5090.
https://doi.org/10.1287/mnsc.2018.3085
Lichtenthaler, U. & Lichtenthaler E. (2009). A Capability-Based Framework for Open
Innovation: Complementing Absorptive Capacity. Journal of Management Studies, Vol. 46,
Issue 8, 1315-1338. https://doi.org/10.1111/j.1467-6486.2009.00854.x
Lichtenthaler, U. (2011). Open Innovation: Past Research, Current Debates, and Future
Directions. Academy of Management Perspectives, Vol. 25, No. 1, 75-93.
https://doi.org/10.5465/amp.25.1.75
Lin, Y. & Wu, L. Y. (2014). Exploring the role of dynamic capabilities in firm performance under
the resource-based view framework. Journal of Business Research, Vol. 67, Issue 3, 407-413.
https://doi.org/10.1016/j.jbusres.2012.12.019
Lin, H. & Darnall, N. (2015). Strategic Alliance Formation and Structural Configuration. Journal
of Business Ethics, Vol. 127, Issue 3, 549-564. https://doi.org/10.1007/s10551-014-2053-7
Liu, C. L., Ghauri, P. N. & Sinkovics, R. R. (2010). Understanding the impact of relational
capital and organizational learning on alliance outcomes. Journal of World Business, Vol. 45,
Issue 3, 237-249. https://doi.org/10.1016/j.jwb.2009.09.005
López-Duarte, C., González-Loureiro, M., Vidal-Suárez, M. & González-Diaz, B. (2016).
International strategic alliances and national culture: Mapping the field and developing a
research agenda. Journal of World Business, Vol. 51, Issue 4, 511-524.
https://doi.org/10.1016/j.jwb.2016.05.001
122
Ma C., Yang, Z., Yao, Z., Fisher, G. & Fang, E. (2012). The effect of strategic alliance resource
accumulation and process characteristics on new product success: Exploration of international
high-tech strategic alliances in China. Industrial Marketing Management, Vol. 41, Issue 3, 469-
480. https://doi.org/10.1016/j.indmarman.2011.04.001
Marciukaityte, D., Roskelley, K. & Wang, H. (2009). Strategic alliances by financial services
firms. Journal of Business Research, Vol. 62, Issue 11, 1193-1199.
https://doi.org/10.1016/j.jbusres.2008.07.004
McCarter, M. W., Mahoney, J. T. & Northcraft, G. B. (2011). Testing the Waters: Using
Collective Real Options to Manage the Social Dilemma of Strategic Alliances. Academy of
Management Review, Vol. 36, No. 4, 621-640. https://doi.org/10.5465/amr.2009.0481
Meier, M. (2011). Knowledge Management in Strategic Alliances: A Review of Empirical
Evidence. International Journal of Management Reviews, Vol. 13, Issue 1, 1-23.
https://doi.org/10.1111/j.1468-2370.2010.00287.x
Min, H. & Joo, S. J. (2016). A comparative performance analysis of airline strategic alliances
using data envelopment analysis. Journal of Air Transport Management, Vol. 52, 99-110.
https://doi.org/10.1016/j.jairtraman.2015.12.003
Mishra, A. A. & Shah, R. (2009). In union lies strength: Collaborative competence in new
product development and its performance effects. Journal of Operations Management, Vol.
27, Issue 4, 324-338. https://doi.org/10.1016/j.jom.2008.10.001
Mitsuhashi, H. (2002). Uncertainty in selecting alliance partners: The three reduction
mechanisms and alliance formation processes. The International Journal of Organizational
Analysis, Vol. 10, No. 2, 109-133. http://dx.doi.org/10.1108/eb028946
Mohr, J. & Spekman, R. (1994). Characteristics of Partnership Success: Partnership Attributes,
Communication Behavior, and Conflict Resolution Techniques. Strategic Management
Journal, Vol. 15, 135-152. http://dx.doi.org/10.1002/smj.4250150205
Muthoka, R. K. & Kilika, J. (2016). Towards a Theoretical Model for Strategic Alliance, and
Partner Selection Among Small Medium Enterprises (SMES): A Research Agenda. Science
Journal of Business and Management, Vol. 4, Issue 1, 1-7.
https://doi.org/10.11648/j.sjbm.20160401.11
123
Nasser, A. & Abuzaid, A. (2014). The Impact of Strategic Alliance Partner Characteristics on
Firms’ Innovation: Evidence from Jordan. International Journal of Business and Management,
Vol. 9, No.3, 77-87. http://dx.doi.org/10.5539/ijbm.v9n3p77
Nielson, B. B. (2003). An Empirical Investigation of the Drivers of International Strategic
Alliance Formation. European Management Journal, Vol. 21, No. 3, 301-322.
https://doi.org/10.1016/j.jairtraman.2015.01.004
Nielson, B. B. (2007). Determining international strategic alliance performance: A
multidimensional approach. International Business Review, Vol. 16, Issue 3, 337-361.
https://doi.org/10.1016/j.ibusrev.2007.02.004
Owen, S. & Yawson, A. (2012). Information asymmetry and international strategic alliances.
Journal of Banking and Finance,
Rajan R., Dhir, S., & Sushil, P. (2020). Alliance termination research: a bibliometric review and
research agenda. Journal of Strategy and Management, Vol. 13, No. 3, 351-375.
https://doi.org/10.1108/JSMA-10-2019-0184
Parkhe, A. (1993). Strategic alliance structuring: A game theoretic and transaction cost
examination of interfirm cooperation. Academy of Management Journal, Vol. 36, Issue 4, 784-
829. http://dx.doi.org/10.2307/256759
Penny, C. R. & Combs, J. G. (2019). A Transaction Cost Perspective of Alliance Portfolio
Diversity. Journal of Management Studies, Vol. 56. 1-32. https://doi.org/10.1111/joms.12518
Porter, M. E. (1990). Competitive Advantages of Nations, New York: The Free Press.
Ramdhani, A., Ramdhani, M. A. & Amin, A. S. (2014). Writing a Literature Review Research
Paper: A step-by-step approach. International Journal of Basic and Applied Science, Vol. 3,
No. 1, 47-56.
Ritala, P. (2012). Coopetition Strategy – When is it Successful? Empirical Evidence on
Innovation and Market Performance. British Journal of Management, Vol. 23, Issue 3, 307-
324. https://doi.org/10.1111/j.1467-8551.2011.00741.x
124
Robson, M. J., Katsikeas, C. S., Schlegelmilch, B. B. & Pramböck, B. (2019). Alliance
capabilities, interpartner attributes, and performance outcomes in international strategic
alliances. Journal of World Business, Volume 54, Issue 2, 137-153.
https://doi.org/10.1016/j.jwb.2018.12.004
Russo, M. & Cesarani, M. (2017). Strategic Alliance Success Factors: A Literature Review on
Alliance. International Journal of Business Administration, Vol. 8, No. 3, 1-9.
https://doi.org/10.5430/ijba.v8n3p1
Seabi, T. & Foss, N. (2015). Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management Journal,
Vol. 33, Issue 3, 201-213. https://doi.org/10.1016/j.emj.2014.11.002
Sah, R. H. & Swaminathan, V. (2008). Factors influencing partner selection in strategic
alliances: the moderating role of alliance context. Strategic Management Journal, Vol. 29,
Issue 5, 471-494. https://doi.org/10.1002/smj.656
Sambasivan, M., Siew-Phaik, L., Mohamed, Z. A. & Leong, Y. C. (2011). Impact of
interdependence between supply chain partners on strategic alliance outcomes: Role of
relational capital as a mediating construct. Management Decision, Vol. 49, No. 4, 548-569.
https://doi.org/10.1108/00251741111126486
Sampong, K., Igel, B. & Smith, H. L. (2014). Strategic alliance motivation for technology
commercialization and product development. Management Research Review, Vol. 37, No. 6,
518-537. https://doi.org/10.1108/MRR-03-2013-0070
Spralls, S. a., Hunt, S. H. & Wilcox, J. B. (2011). Extranet Use and Building Relationship Capital
in Interfirm Distribution Networks: The Role of Extranet Capability. Journal of Retailing, Vol.
87, Issue 1, 59-74. https://doi.org/10.1016/j.jretai.2010.09.001
Teece, D. J., Pisano, G. & Shuen. A. (1997). Dynamic Capabilities and Strategic Management.
Strategic Management Journal, Vol. 18, Issue 7, 509-533. https://doi.org/10.1002/(SICI)1097-
0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Teng, B. S. & Das, T. K. (2008). Governance structure choice in strategic alliances: The roles
of alliance objectives, alliance management experience, and international partners.
Management Decisions, Vol. 46, No. 5, 725-742. https://doi.org/10.1108/00251740810873482
125
Terjesen, S., Patel, P. C. & Covin J. G. (2011). Alliance diversity, environmental context and
the value of manufacturing capabilities among new high technology ventures. Journal of
Operations Management, Vol. 29, Issues 1-2, 105-115.
https://doi.org/10.1016/j.jom.2010.07.004
Todeva, E. & Knoke, D. (2005). Strategic Alliances and Models of Collaboration. Management
Decision, Vol. 43, No. 1, 123-148. https://doi.org/10.1108/00251740510572533
Tsang, E. W. K. (2000). Transaction Cost and Resource-Based Explanations of Joint Ventures:
A Comparison and Synthesis. Organization Studies, Vol. 21, Issue 1, 215-242.
https://doi.org/10.1177/0170840600211004
Tsang, E. W. K. (2008). Transferring Knowledge to Acquisition Joint Ventures: An
Organizational Unlearning Perspective. Management Learning, Vol. 39, Issue 1, 5-20.
https://doi.org/10.1177/1350507607085169
Uddin, M. B. & Akhter, B. (2011). Strategic Alliance and Competitiveness: Theoretical
Framework. Journal of Arts Science and Commerce, Vol. 2, Issue 1, 43-54.
Ungson, G. R. & Wong, Y. Y. (2014). Global Strategic Management. Routledge, 1-624.
Varadarajan, P. R. & Cunningham M. H. (1995). Strategic Alliances: A Synthesis of Conceptual
Foundations. Journal of the Academy of Marketing Science, Vol 23, Issue 4 282-296.
http://dx.doi.org/10.1177/009207039502300408
Varma, S., Awasthy, R., Narain, K. & Nayyar, R. (2015). Cultural determinants of alliance
management capability – an analysis of Japanese MNCs in India. Asia Pacific Business
Review, Vol. 21, Issue 3, 424-448. https://doi.org/10.1080/13602381.2015.1022332
VHB. (2019, October). VHB-JOURQUAL3. Retrieved October 10, 2019, from
http://vhbonline.org/vhb4you/jourqual/vhb-jourqual-3/
Wang, G., Dou, W., Zhu, W. & Zhou, N. (2015). The effects of firm capabilities on external
collaboration and performance: The moderating role of market turbulence. Journal of Business
Research, Vol. 68, Issue 9, 1928-1936. https://doi.org/10.1016/j.jbusres.2015.01.002
Wang, C. N., Nguyen, X. T., Le, T. D. & Hsueh, M. H. (2018). A partner selection approach for
strategic alliance in the global aerospace and defense industry. Journal of Air Transport
Management, Vol. 69, 190-204. https://doi.org/10.1016/j.jairtraman.2018.03.003
126
Wassmer, U. & Dussage, P. (2011). Value Creation in Alliance Portfolios: The Benefits and
Costs of Network Resource Interdependencies. European Management Review, Vol. 8, Issue
1, 47-64. https://doi.org/10.1111/j.1740-4762.2011.01003.x
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, Vol.
5, Issue 2, 171-181. https://doi.org/10.1002/smj.4250050207
Williams, O. E. (1981). The economics of organization: The transaction cost approach.
American Journal of Sociology, Vol. 87, No. 3, 548-577. https://doi.org/10.1086/227496
Wittmann, C. M., Hunt, S. D. & Arnett, D. B. (2009). Explaining alliance success: Competences,
resources, relational factors, and resource-advantage theory. Industrial Marketing
Management, Vol. 38, Issue 7, 743-756. https://doi.org/10.1016/j.indmarman.2008.02.007
Wong, A., Wei, L., Yang, J. & Tjosvold D. (2017). Productivity and participation values for
cooperative goals to limit free riding and promote performance in international joint ventures.
Journal of World Business, Vol 52., Issue 6, 819-830.
https://doi.org/10.1016/j.jwb.2017.08.002
Zaheer, A, Gözübüyük, R. & Milanov, H. (2010). It’s the Connections: The Network Perspective
in Interorganizational Research. Academy of Management Perspectives, Vol. 24, No. 1, 62-
77. https://doi.org/10.5465/amp.24.1.62
Zahoor, N. & AL-Tabbaa, O. (2020). Inter-organizational collaboration and SMEs’ innovation:
A systematic review and future research directions. Scandinavian Journal of Management,
Vol. 36, Issue 2, 1-19. https://doi.org/10.1016/j.scaman.2020.101109
Zahra, S. A. & George, G. (2002). Absorptive Capacity: A Review, Reconceptualization, and
Extension. The Academy of Management Review, Vol. 27, No. 2. 185-203.
https://doi.org/10.5465/amr.2002.6587995
Zhang H., Shu, c., Jiang, X. & Malter A. J. (2010). Managing Knowledge for Innovation: The
Role of Cooperation, Competition, and Alliance Nationality. Journal of International Marketing,
Vol. 18, No. 4, 74-94. https://doi.org/10.1509/jimk.18.4.74
Zineldin, M & Dodourova, M. (2005). Motivation, achievements and failure of strategic
alliances: The case of Swedish auto‐manufacturers in Russia. European Business Review,
Vol. 17, No. 5, 460-470. https://doi.org/10.1108/09555340510620357
Recommended