Management Strategic Alliances
by
T.K. Das
  • LAST REVIEWED: 18 February 2021
  • LAST MODIFIED: 27 February 2019
  • DOI: 10.1093/obo/9780199846740-0157

Introduction

Strategic alliances have proliferated apace in recent decades, reflecting their distinct potential for aiding business and other organizations to compete better in an increasingly complex world. Briefly, strategic alliances are voluntary agreements between two or more organizations to cooperatively pursue their mutual strategic objectives. In business, where these alliances continue to flourish, the partner firms remain independent entities even as they may be actual or potential competitors. The goal is to improve their respective competitive performance and to create value by bringing together the distinctive resources and capabilities of separate firms. At the same time, it must be appreciated that the management of alliances connotes certain special complexities that are not present in managing single organizations, and carries with it certain distinctive risks. The formation, operation, and outcome stages of alliance development, as well as the interpartner dynamics concerning cooperation, resources, trust, risk, control, and so on, are unique in many ways. Strategic alliances also tend to take a variety of forms, so it is necessary to be clear about the nature of these entities. They cover the gamut from buyer-supplier arrangements, joint R&D, manufacturing, and marketing, to joint ventures that could be cross-border, public-private, multipartner, etc., with each type having different issues of governance and interpartner management.

Textbooks, Handbooks, and Book Series

As a relatively young and developing field of study, strategic alliances does not yet have an accepted template for a traditional textbook, but there are a growing number and variety of offerings that together provide an excellent coverage of the subject. Child, et al. 2005 remains a useful textbook. The collection of readings in Bleeke and Ernst 1993 provides a distinctly practitioner-oriented view of alliances and their management, while the handbook Shenkar and Reuer 2006 contains chapters reviewing various alliance topics. The academic research papers in Contractor and Lorange 2002, developed from a conference of alliance scholars, remains a valuable source of knowledge in the field. Finally, the book series Das 2010–, in which each volume covers a specialized topic or theme, is currently the only such series in the alliance field and provides researchers an outlet for more extended treatments than allowed in traditional journal articles.

  • Bleeke, Joel, and David Ernst, eds. Collaborating to Compete: Using Strategic Alliances and Acquisitions in the Global Marketplace. New York: Wiley, 1993.

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    This edited volume gives a broad view of the practical issues in designing strategic alliances by a group of international management consultants, making the general case for collaboration among firms in their quest for greater competitiveness in the increasingly interconnected business world.

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  • Child, John, David Faulkner, and Stephen Tallman. Cooperative Strategy: Managing Alliances, Networks, and Joint Ventures. 2d ed. Oxford: Oxford University Press, 2005.

    DOI: 10.1093/acprof:oso/9780199266241.001.0001Save Citation »Export Citation » Share Citation »

    This textbook, one of relatively few, comprehensively covers both the theoretical literature and case studies on cooperative strategy. A widely cited primer that continues to be useful to both academics and practitioners.

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  • Contractor, Farok, and Peter Lorange, eds. Cooperative Strategies and Alliances. Oxford: Elsevier Science, 2002.

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    A comprehensive collection of thirty-six chapters by sixty-five academics in the field of alliances, arising out of papers presented at a conference organized by Rutgers University and IMD in Lausanne, Switzerland, that constitutes at once an excellent review of alliance research and a chart for future research directions.

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  • Das, T. K., ed. Research in Strategic Alliances. Charlotte, NC: Information Age, 2010–.

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    The only book series exclusively dedicated to strategic alliance research, comprising thematic volumes on developments in the field. Broad topics covered in the fourteen volumes published so far include emerging research perspectives, alliances in a globalizing world, behavioral perspectives, value creation, management dynamics, managing knowledge, interpartner dynamics, managing public-private strategic alliances, innovation and R&D, multipartner alliances, small and medium-sized enterprise (SME) development, governance issues, alliance portfolios and networks, and managing trust.

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  • Shenkar, Oded, and Jeffrey J. Reuer, eds. Handbook of Strategic Alliances. Thousand Oaks, CA: SAGE, 2006.

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    An edited volume of twenty-three chapters by invited scholars and practitioners on key topics in the alliance field; this handbook places some welcome emphasis on the management issues along the life cycle of alliances.

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Journals

Scholarly work on the subject of strategic alliances is spread over a number of well-known journals in the management and organization field. None of these journals can be identified as providing a singular outlet for research in strategic alliances. However, in their totality, the journals mentioned here constitute high-quality sources for alliance knowledge and research. The Academy of Management publishes several journals that occasionally contain articles related to alliances, with the theoretical contributions in the Academy of Management Review and empirical studies in the Academy of Management Journal. Both empirical and theoretical articles are published in a number of other publications. Of these, research is the focus in the Journal of Management, the Strategic Management Journal, Organization Science, Organization Studies, the Journal of Management Studies, and Administrative Science Quarterly. Other journals that publish alliance articles, albeit sporadically, are also worth consulting, and include Long Range Planning. The Harvard Business Review remains preeminent for practitioner insights.

Alliance Development Process

In studying strategic alliances, it is important to understand the developmental processes of strategic alliances, i.e., the processes through which alliances are first considered as a viable strategic alternative, and then negotiated, formed, operated, evaluated, reformed, and terminated. To that end, it may be helpful to conceive of the process of alliance management as made up of three major stages, noting that, like all such process approaches, they also have some overlaps. Das and Teng 2002 proposes the developmental stages of formation, operation, and outcome. In each of these developmental stages, there are significant complexities and contingencies. Generally speaking, different studies have focused on different aspects of the alliance life cycle and different contexts. Gulati 1995 studies alliance formation, Kogut 1988 assesses early joint venture studies, and Hitt, et al. 2004 examines the partner selection processes during alliance formation in transitional economies. Regarding effective alliance performance, Ireland, et al. 2002 and Kale and Singh 2009 focus on developing competitive advantage and enhancing capabilities, Ness 2009 discusses relational practice, and Ariño and Reuer 2004 deals with the costs involved in contractual provisions.

  • Ariño, Africa, and Jeffrey J. Reuer. “Designing and Renegotiating Strategic Alliance Contracts.” Academy of Management Executive 18 (2004): 37–48.

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    This article deals with the cost aspect of contractual provisions in the structuring of strategic alliances. It also suggests that certain costs are acceptable in contract renegotiation in the context of contract complexities and desired contractual safeguards.

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  • Das, T. K., and Bing-Sheng Teng. “The Dynamics of Alliance Conditions in the Alliance Development Process.” Journal of Management Studies 39 (2002): 725–746.

    DOI: 10.1111/1467-6486.00006Save Citation »Export Citation » Share Citation »

    Presents a process model of the development of strategic alliances, integrating the unfolding of interacting alliance conditions, alliance development stages, and an alliance system comprising coevolutionary elements.

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  • Gulati, Ranjay. “Social Structure and Alliance Formation Patterns: A Longitudinal Analysis.” Administrative Science Quarterly 40 (1995): 619–652.

    DOI: 10.2307/2393756Save Citation »Export Citation » Share Citation »

    This study reports the findings of a comprehensive empirical study of alliance formation. The influences of both the social structure and the strategic interdependence considerations in these formation decisions are explored and validated.

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  • Hitt, Michael A., David Ahlstrom, M. Tina Dacin, Edward Levitas, and Lilia Svobodina. “The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China vs. Russia.” Organization Science 15 (2004): 173–185.

    DOI: 10.1287/orsc.1030.0045Save Citation »Export Citation » Share Citation »

    The key finding of this study of firms in emerging economies is that their partner selection processes are impacted differentially according to the nature of the institutional environment (stable or turbulent). Longer-term views of partner relationships are facilitated by stable institutional conditions, leading to a focus on intangible assets of partner firms, whereas short-term considerations such as financial capital are valued under turbulent conditions.

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  • Ireland, R. Duane, Michael A. Hitt, and Deepa Vaidyanath. “Alliance Management as a Source of Competitive Advantage.” Journal of Management 28 (2002): 413–446.

    DOI: 10.1177/014920630202800308Save Citation »Export Citation » Share Citation »

    Makes the case for the effective management of alliances for generating competitive advantage, with discussions of the roles of proper partner selection and building interpartner trust.

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  • Kale, Prashant, and Harbir Singh. “Managing Strategic Alliances: What Do We Know Now, and Where Do We Go from Here?” Academy of Management Perspectives 23 (2009): 45–62.

    DOI: 10.5465/amp.2009.43479263Save Citation »Export Citation » Share Citation »

    Suggests ways to leverage alliance management capabilities for various phases of the alliance life cycle.

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  • Kogut, Bruce. “Joint Ventures: Theoretical and Empirical Perspectives.” Strategic Management Journal 9 (1988): 319–332.

    DOI: 10.1002/smj.4250090403Save Citation »Export Citation » Share Citation »

    One of the early assessments of the studies dealing with joint ventures from the perspectives of organizational learning, transaction costs, and strategic behavior.

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  • Ness, Havard. “Governance, Negotiations, and Alliance Dynamics: Explaining the Evolution of Relational Practice.” Journal of Management Studies 46 (2009): 451–480.

    DOI: 10.1111/j.1467-6486.2008.00818.xSave Citation »Export Citation » Share Citation »

    Based on case studies, this article shows how different modes of relational practice (influenced by recursive and adaptive forces) in alliances evolve with negotiation behavior and governance mechanisms.

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Major Topics in Strategic Alliance Research

As the relatively new field of strategic alliances has evolved, it has perhaps inevitably led researchers to explore different aspects of the process of alliance development, comprising alliance formation, alliance operation, and alliance performance. Theories and approaches from various disciplines have been examined for potential insights and applications to the alliance-related issues. Alliance research can be categorized under major areas and topics, and the extant literature can be understood in terms of the contributions under these categories, including cooperation, resources, trust, risk, control, governance, capabilities, learning and knowledge management, opportunism, instabilities, multipartner alliances, alliance portfolios, and alliance networks.

Cooperation

Cooperation is an essential ingredient of strategic alliances. It has been studied from various interdisciplinary standpoints. Ring and Van de Ven 1994 adopts a process view of cooperative interorganizational relationships, Doz 1996 adopts an evolutionary perspective to reveal the salience of learning in successful alliances, whereas Dyer and Singh 1998 highlights the competitive advantage that lies in the interpartner relationship space, and Luo 2008 discusses the role of procedural fairness in performance outcomes. Das and Teng 1998 proposes that the goal of cooperation of an alliance firm (focal firm) is to continually enhance its confidence that its partner firm will reciprocate in kind. Gulati, et al. 2012 argues for considering coordination along with cooperation to understand collaboration between organizations. However, one notes that cooperation in alliances is not without costs (Gulati and Singh 1998, White and Lui 2005).

  • Das, T. K., and Bing-Sheng Teng. “Between Trust and Control: Developing Confidence in Partner Cooperation in Alliances.” Academy of Management Review 23 (1998): 491–512.

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    Introduces the notion of confidence in partner cooperation in alliances, and argues that this confidence is generated by both supplementary and complementary combinations of interpartner trust and control. The interactive effects of trust level and control mechanisms are also explored.

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  • Doz, Yves L. “The Evolution of Cooperation in Strategic Alliances: Initial Conditions or Learning Process.” Strategic Management Journal 17.S1 (1996): 55–83.

    DOI: 10.1002/smj.4250171006Save Citation »Export Citation » Share Citation »

    This article examines a longitudinal case to propose a framework of evolving cooperation in alliances, establishing that successful alliance projects evolved through interactive cycles of learning, reevaluation, and readjustment, whereas the failing projects showed little learning and adjustment.

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  • Dyer, Jeffrey, and Harbir Singh. “The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage.” Academy of Management Review 23 (1998): 660–679.

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    Presents an argument for recognizing the kinds of competitive advantage that reside in the relationship space between organizations, and thus draws attention to the value of the relational aspects as distinct from the traditional view that mainly focuses on resources and industry structure.

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  • Gulati, Ranjay, and Harbir Singh. “The Architecture of Cooperation: Managing Coordination Costs and Appropriation Concerns in Strategic Alliances.” Administrative Science Quarterly 43 (1998): 781–814.

    DOI: 10.2307/2393616Save Citation »Export Citation » Share Citation »

    An empirical study that tests the choice of governance structure in alliances based on considerations of anticipated coordination costs for carrying out tasks across organizational boundaries.

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  • Gulati, Ranjay, Franz Wohlgezogen, and Pavel Zhelyazkov. “The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances.” Academy of Management Annals 6 (2012): 531–583.

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    This article makes the case for more attention to coordination to supplement the traditional salience of cooperation in understanding interorganizational collaboration in strategic alliances.

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  • Luo, Yadong. “Procedural Fairness and Interfirm Cooperation in Strategic Alliances.” Strategic Management Journal 29 (2008): 27–46.

    DOI: 10.1002/smj.646Save Citation »Export Citation » Share Citation »

    An analysis of the impact of procedural fairness on the operational and financial outcomes of cooperation between alliance partners, assessing the roles of reduced relational risk and increased trust.

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  • Ring, Peter Smith, and Andrew H. Van de Ven. “Developmental Processes of Cooperative Interorganizational Relationships.” Academy of Management Review 19 (1994): 90–118.

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    Proposes a comprehensive process framework of cooperative interorganizational relationships, with theoretical insights for transaction cost economics and agency theories.

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  • White, Steven, and Steven Siu-Yun Lui. “Distinguishing Costs of Cooperation and Control in Alliances.” Strategic Management Journal 26 (2005): 913–932.

    DOI: 10.1002/smj.490Save Citation »Export Citation » Share Citation »

    Analyzes the cost implications of cooperating with and controlling alliance partners with reference to task complexity and interpartner diversity.

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Resources

The need for resources that a firm does not itself have is a primary reason to form an alliance with a firm that can provide those resources; hence the impetus for studying in some depth the nature of resources and for exploring a resource-based perspective, as explored in Das and Teng 2000. Although there seems to be a dearth of resource-based approaches to understanding strategic alliances, the empirical paper Eisenhardt and Schoonhoven 1996 is an early contribution, and Lavie 2006 presents a resource-based view of firm networks.

  • Das, T. K., and Bing-Sheng Teng. “A Resource-Based Theory of Strategic Alliances.” Journal of Management 26 (2000): 31–61.

    DOI: 10.1177/014920630002600105Save Citation »Export Citation » Share Citation »

    Presents a comprehensive theory of the formation, structural preferences, and performance of strategic alliances from the resource-based perspective, proposing four types of resource alignments, based on resource similarity and resource utilization, that have varying impacts on collective strengths and interfirm conflicts and thus also on alliance performance. The article furthermore discusses how different resource profiles of partner firms would determine structural preferences in terms of four major categories of alliances.

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  • Eisenhardt, Kathleen M., and Claudia Bird Schoonhoven. “Resource-Based View of Strategic Alliance Formation: Strategic and Social Effects in Entrepreneurial Firms.” Organization Science 7 (1996): 136–150.

    DOI: 10.1287/orsc.7.2.136Save Citation »Export Citation » Share Citation »

    Presents an argument that strategic positions and social factors constitute the underlying logic in the formation of strategic alliances, a viewpoint not covered by transaction cost explanations.

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  • Lavie, Dovev. “The Competitive Advantage of Interconnected Firms: An Extension of the Resource-Based View.” Academy of Management Review 31 (2006): 638–658.

    DOI: 10.5465/amr.2006.21318922Save Citation »Export Citation » Share Citation »

    Argues for the salience of the nature of relationships among network members over the resources in networked environments.

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Trust, Risk, and Control

Yan and Gray 1994 was an early attempt at integrating control and bargaining power by examining four international joint ventures (IJVs). It has since been argued that the concepts of trust, risk, and control ought to be considered in an integrated manner because of the very substantive interdependence among them in alliances. Das and Teng 2001 presents an integrated framework of all three key concepts to derive important insights into alliance functioning. All three are made up of multiple dimensions. Risk reduction is best achieved through a combination of trust and control. However, the deployment of formal control mechanisms may undermine the level of trust among partners. The trust level and the control level jointly and independently contribute to the level of confidence in partner cooperation. In particular, a number of empirical studies have explored the joint roles of trust and control in alliances, as discussed in Fryxell, et al. 2002 and Patzelt and Shepherd 2008. Lastly, both interpersonal trust and interorganizational trust have an effect of alliance performance, as explained in Zaheer, et al. 1998.

  • Das, T. K., and Bing-Sheng Teng. “Trust, Control, and Risk in Strategic Alliances: An Integrated Framework” Organization Studies 22 (2001): 251–283.

    DOI: 10.1177/0170840601222004Save Citation »Export Citation » Share Citation »

    Proposes a comprehensive and integrated framework of strategic alliances comprising the three key constructs of trust, control, and risk, with a detailed examination of the linkages between the various construct dimensions. Also, discusses trust-building techniques and control mechanisms to reduce risk in different types of strategic alliances.

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  • Fryxell, Gerald E., Robert S. Dooley, and Maria Vryza. “After the Ink Dries: The Interaction of Trust and Control in US-Based International Joint Ventures.” Journal of Management Studies 39 (2002): 865–886.

    DOI: 10.1111/1467-6486.00315Save Citation »Export Citation » Share Citation »

    An empirical study of IJVs that finds that perceptions of IJV performance are related in different ways to formal and social control mechanisms, trust, and age.

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  • Patzelt, Holger, and Dean A. Shepherd. “The Decision to Persist with Underperforming Alliances: The Role of Trust and Control.” Journal of Management Studies 45 (2008): 1217–1243.

    DOI: 10.1111/j.1467-6486.2008.00791.xSave Citation »Export Citation » Share Citation »

    This study examines experimental data of decisions by alliance managers, and finds that trust and control, and their interactions, explain how managers decide to persist in underperforming alliances.

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  • Yan, Aimin, and Barbara Gray. “Bargaining Power, Management Control, and Performance in United States–China Joint Ventures: A Comparative Case Study.” Academy of Management Journal 37 (1994): 1478–1517.

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    Presents an integrative model of management control in joint ventures based on an analysis of the evolution of four joint ventures between partners from the United States and China.

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  • Zaheer, Akbar, Bill McEvily, and Vincenzo Perrone. “Does Trust Matter? Exploring the Effects of Interorganizational and Interpersonal Trust on Performance.” Organization Science 9 (1998): 141–159.

    DOI: 10.1287/orsc.9.2.141Save Citation »Export Citation » Share Citation »

    Investigates the roles of interpersonal trust and interorganizational trust in interfirm relationships. An empirical analysis of buyer-seller relationships in the manufacturing industry finds that these two types of trust, albeit related constructs, have different roles in influencing exchange performance.

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Governance

The choice of the governance structure in an alliance, such as in equity versus nonequity alliance, plays a vital role in alliance management and performance, in terms of protecting firm assets, reducing relational and performance risk, containing transaction costs, controlling opportunistic behavior, and so forth (see Das 2016 for a thematic collection of chapters on selected governance issues in alliances). The risk perspective is discussed in Das and Teng 1996, which proposes that interfirm alliances are more likely to be equity based when relational risk, rather than performance risk, is perceived as the dominant threat to the alliances, and are more likely to be nonequity based when performance risk, rather than relational risk, is perceived as the dominant threat to the alliances. Ring and Van de Ven 1992 includes the role of trust in this governance choice question, while Reuer and Ariño 2007 discusses the contractual complexities in alliances.

  • Das, T. K., ed. Governance Issues in Strategic Alliances. Charlotte, NC: Information Age, 2016.

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    The chapters in this volume cover some of the specific governance issues, including structural choices under diverse conditions of uncertainty, risks, controls, and resources, and how governance decisions affect asset management, cooperative relationships, internal tensions, and culture management.

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  • Das, T. K., and Bing-Sheng Teng. “Risk Types and Inter-firm Alliance Structures.” Journal of Management Studies 33 (1996): 827–843.

    DOI: 10.1111/j.1467-6486.1996.tb00174.xSave Citation »Export Citation » Share Citation »

    This article proposes an integrated risk perspective on governance structure choice in strategic alliances, introducing the notion of relational risk that pertains to cooperation among alliance partners, as distinct from the traditional performance risk that exists in all business endeavors. It argues that equity alliances will be preferred when high relational risk is perceived, as opposed to a choice of nonequity alliances when the perceived performance risk is high.

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  • Reuer, Jeffrey, and Africa Ariño. “Strategic Alliance Contracts: Dimensions and Determinants of Contractual Complexity.” Strategic Management Journal 28 (2007): 313–330.

    DOI: 10.1002/smj.581Save Citation »Export Citation » Share Citation »

    Discusses the underlying dimensions of contractual complexity in strategic alliances, suggesting these spring from enforcement and coordination functions.

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  • Ring, Peter Smith, and Andrew H. Van de Ven. “Structuring Cooperative Relationships between Organizations.” Strategic Management Journal 19 (1992): 90–118.

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    The authors propose that risk and reliance on trust play key roles in the choice of governance mechanisms when multiple organizations engage in cooperative endeavors.

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Capabilities

In managing alliances, a key objective in addition to effective current performance is to develop superior organizational capabilities for future performance. In this endeavor, partner firms adopt different strategies, as seen in Heimeriks and Duysters 2007, to refine their learning processes and organizational arrangements, including creating a dedicated alliance function, as discussed in Kale and Singh 2007, and enhancing managerial competence in coordination, communication, and bonding, as explored in Schreiner, et al. 2009.

  • Heimeriks, Koen H., and Geert Duysters. “Alliance Capability as a Mediator between Experience and Alliance Performance: An Empirical Investigation into the Alliance Capability Development Process.” Journal of Management Studies 44 (2007): 25–49.

    DOI: 10.1111/j.1467-6486.2006.00639.xSave Citation »Export Citation » Share Citation »

    A survey of alliance managers analyzing the process of alliance capability development. It finds that the micro-level sources of this process partially explain the disparities in alliance performance.

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  • Kale, Prashant, and Harbir Singh. “Building Firm Capabilities through Learning: The Role of the Alliance Learning Process in Alliance Capabilities and Firm-Level Alliance Success.” Strategic Management Journal 28 (2007): 981–1000.

    DOI: 10.1002/smj.616Save Citation »Export Citation » Share Citation »

    An empirical study with survey data showing that a dedicated alliance function helps alliance success through a firm’s alliance learning process.

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  • Schreiner, Melanie, Prashant Kale, and Daniel Corsten. “What Really Is Alliance Management Capability and How Does It Impact Alliance Outcomes and Success?” Strategic Management Journal 30 (2009): 1395–1419.

    DOI: 10.1002/smj.790Save Citation »Export Citation » Share Citation »

    The article proposes and empirically studies the three elements comprising alliance management capability, namely, coordination, communication, and bonding, and their impact on alliance outcomes.

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Learning and Knowledge Management

Learning from one’s partners is among the primary motivations of alliance formation, as is the related proficiency in knowledge management. Hamel 1991 established early on that alliance member firms differ in their learning abilities, whereas Hitt, et al. 2000 found that firms differ considerably in the kinds of knowledge sought depending on whether they belong to emerging markets or developed markets. Dussauge, et al. 2000 studied the differences in learning levels in link and scale alliances. Grant and Baden-Fuller 2004 makes the case that knowledge access rather than knowledge acquisition should be our focus in a knowledge-based view of alliances. The thematic collection Das 2013 provides discussions of topics such as coopetition in knowledge integration and knowledge in supply chain networks. Among other significant contributions in the area are the empirical findings that it takes some time to develop and benefit from collaborative know-how, as seen in Simonin 1997; that private benefits and common benefits in alliances create different incentives for investments in learning, as documented in Khanna, et al. 1998; and that greater knowledge transfers take place in equity arrangements, as explained in Mowery, et al. 1996.

  • Das, T. K., ed. Managing Knowledge in Strategic Alliances. Charlotte, NC: Information Age, 2013.

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    The chapters in this volume cover some of the specific aspects of alliance learning and knowledge management such as managing uncertainty, collaborative know-how, coopetition in knowledge integration, partner responsiveness and knowledge in supply chain networks, and the effect of knowledge flows on the decision to cooperate.

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  • Dussauge, Pierre, Bernard Garrette, and Will Mitchel. “Learning from Competing Partners: Outcome and Competing Partners: Outcomes and Durations of Scale and Link Alliances in Europe, North America and Asia.” Strategic Management Journal 21 (2000): 99–126.

    DOI: 10.1002/(SICI)1097-0266(200002)21:2<99::AID-SMJ80>3.0.CO;2-GSave Citation »Export Citation » Share Citation »

    Explores empirically the differences between link and scale alliances in terms of the levels of learning by partner firms, to find that link alliances fare better than scale alliances in learning and capability acquisition.

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  • Grant, Robert M., and Charles Baden-Fuller. “A Knowledge Accessing Theory of Strategic Alliances.” Journal of Management Studies 41 (2004): 61–84.

    DOI: 10.1111/j.1467-6486.2004.00421.xSave Citation »Export Citation » Share Citation »

    The article argues that it is knowledge access rather than knowledge acquisition that is important in the knowledge-based view of alliance formation and management, enhancing both the integration of knowledge in the production processes and the utilization of knowledge.

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  • Hamel, Gary. “Competition for Competence and Interpartner Learning within International Strategic Alliances.” Strategic Management Journal 12 (1991): 83–103.

    DOI: 10.1002/smj.4250120908Save Citation »Export Citation » Share Citation »

    An early paper that points out the asymmetric nature of interpartner learning by individual member firms in an alliance; the competitive and collaborative aims of partners likewise exhibit an asymmetric nature.

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  • Hitt, Michael A., M. Tina Dacin, Edward Levitas, Jean-Luc Arregle, and Anca Borza. “Partner Selection in Emerging and Developed Market Contexts: Resource-Based and Organizational Learning Perspectives.” Academy of Management Journal 43 (2000): 449–467.

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    This study finds that firms from emerging markets and developed markets differ considerably in what they aim to gain in their selection of international partners. While emerging market firms tend to emphasize financial and technical resources, the developed market firms look for local market knowledge.

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  • Khanna, Tarun, Ranjay Gulati, and Nitin Nohria. “The Dynamics of Learning Alliances: Competition, Cooperation, and Relative Scope.” Strategic Management Journal 19 (1998): 193–210.

    DOI: 10.1002/(SICI)1097-0266(199803)19:3<193::AID-SMJ949>3.0.CO;2-CSave Citation »Export Citation » Share Citation »

    Argues that differing incentives for investments in learning are created by private benefits and common benefits of partner firms in learning alliances, given the opposing impacts of cooperative and competitive aspects.

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  • Mowery, David C., Joanne E. Oxley, and Brian S. Silverman. “Strategic Alliances and Interfirm Knowledge Transfer.” Strategic Management Journal 17 (1996): 77–91.

    DOI: 10.1002/smj.4250171108Save Citation »Export Citation » Share Citation »

    An empirical study of interfirm knowledge transfers in alliances, confirming greater transfers in equity arrangements and finding that partner firms developed more divergent capabilities.

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  • Simonin, Bernard L. “The Importance of Collaborative Know-How: An Empirical Test of the Learning Organization.” Academy of Management Journal 40 (1997): 1150–1174.

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    A study showing that extended benefits of collaboration in alliances can be expected only after developing collaborative know-how through experience.

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Opportunism

Partner opportunism is endemic in alliances and covers a wide range of behaviors, as explored in Wathne and Heide 2000 and Williamson 1993, including fraud, deceit, obfuscation, breaking promises, bluffing, lying, misrepresenting, distorting, cheating, and stealing. Opportunism can be seen as the opposite of partner cooperation in strategic alliances. Luo 2007 examines the particular case of how the incidence of opportunism increases under conditions of environment volatility.

  • Luo, Yadong. “Are Joint Ventures Partners More Opportunistic in a More Volatile Environment?” Strategic Management Journal 28 (2007): 39–60.

    DOI: 10.1002/smj.564Save Citation »Export Citation » Share Citation »

    A study of how partner opportunism increases in response to environmental volatility in an emerging economy.

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  • Wathne, Kenneth, and Jan B. Heide. “Opportunism in Interfirm Relationships: Forms, Outcomes and Solutions.” Journal of Marketing 64 (2000): 36–51.

    DOI: 10.1509/jmkg.64.4.36.18070Save Citation »Export Citation » Share Citation »

    The article argues for recognizing different types of opportunism so that appropriate governance strategies may be adopted for each type of opportunistic behavior.

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  • Williamson, Oliver E. “Opportunism and Its Critics.” Managerial and Decision Economics 14 (1993): 97–107.

    DOI: 10.1002/mde.4090140203Save Citation »Export Citation » Share Citation »

    This article on the transaction cost economics view of opportunism summarizes the classic “self-interest seeking with guile” approach, with its behavioral assumptions, but also goes on to include the role of trust in economic organization.

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Instabilities

As organizational entities, strategic alliances may be considered as basically unstable and transitional in nature. The literature on the causes of this inherent instability identifies a diverse set, of which the principal ones comprise the following: interfirm rivalry and managerial complexity, as seen in Park and Ungson 2001; shifting relative bargaining power of partners, as discussed in Inkpen and Beamish 1997; and internal tensions, as explained in Das and Teng 2000. Ariño and de la Torre 2001 examines the case of an IJV to identify the variations in relationship quality in collaboration as a likely cause, while Gill and Butler 2003 analyzes two cross-cultural joint ventures to conclude that the sources of stability stem from trust, dependence, and conflict.

  • Ariño, Africa, and Jose de la Torre. “Learning from Failure: Towards an Evolutionary Model of Collaborative Ventures.” Organization Science 9 (2001): 306–325.

    DOI: 10.1287/orsc.9.3.306Save Citation »Export Citation » Share Citation »

    Examines how relationship quality in a failed IJV is constituted and evolves as both an outcome and a mediating variable, based on positive feedback loops and mutual trust building.

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  • Das, T. K., and Bing-Sheng Teng. “Instabilities of Strategic Alliances: An Internal Tensions Perspective.” Organization Science 11 (2000): 77–101.

    DOI: 10.1287/orsc.11.1.77.12570Save Citation »Export Citation » Share Citation »

    Proposes a framework comprising three sets of dialectical forces (cooperation versus competition, rigidity versus flexibility, and short-term versus long-term orientation) to understand the instabilities of strategic alliances stemming from internal tensions.

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  • Gill, Jas, and Richard J. Butler. “Managing Instability in Cross-Cultural Alliances.” Long Range Planning 36 (2003): 543–563.

    DOI: 10.1016/j.lrp.2003.08.008Save Citation »Export Citation » Share Citation »

    Based on case studies of two cross-cultural joint ventures, this article finds that the key sources of stability vary according to the national culture of the partner firms, and relate mainly to trust, dependence, and conflict.

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  • Inkpen, Andrew, and Paul W. Beamish. “Knowledge, Bargaining Power, and the Instability of International Joint Ventures.” Academy of Management Review 22 (1997): 177–202.

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    This article presents a framework that stresses the role of shifting relative bargaining power of partner firms as the reason for instability of IJVs.

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  • Park, Seung Ho, and Gerardo R. Ungson. “Interfirm Rivalry and Managerial Complexity: A Conceptual Framework of Alliance Failure.” Organization Science 12 (2001): 37–53.

    DOI: 10.1287/orsc.12.1.37.10118Save Citation »Export Citation » Share Citation »

    Presents a theoretical framework of alliance failure based on interfirm rivalry (manifested in opportunism) and managerial complexity (coordination and agency costs).

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Multipartner Alliances

Alliances with more than two partners are growing in number, in keeping with the increasing complexities of the resources needed for the newer kinds of products and services. Multipartner alliances have their own complex internal dynamics, especially in their interrelationships. These internal complexities are not merely the result of there being more members than in dyadic alliances, but are also because multipartner alliances are qualitatively more complicated and intricate on account of the generalized or indirect reciprocities that define the member interactions, as seen in Das and Teng 2002. More elaborate interactions among alliance members also pose problems in ensuring proper cooperation, as discussed in Zeng and Chen 2003. Lavie, et al. 2007 reports the results of an empirical study on the performance implications, such as market success and productivity, of entry timings and degree of involvement of members in multipartner alliances. Das 2015 provides a thematic collection with discussions on other topics pertaining to multipartner alliances, such as triadic alliances and the roles of power and multilevel embeddedness.

  • Das, T. K., ed. Managing Multipartner Strategic Alliances. Charlotte, NC: Information Age, 2015.

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    The chapters in this volume cover some of the issues pertinent to managing alliances that have more than two member firms (a growing category), such as unique complexities arising from indirect or generalized reciprocities among multiple members, roles of power and multilevel embeddedness, and the nature of value creation in a consortium.

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  • Das, T. K., and Bing-Sheng Teng. “Alliance Constellations: A Social Exchange Perspective.” Academy of Management Review 27 (2002): 445–456.

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    Adopting a social exchange perspective, this article presents a theoretical framework and a typology of alliance constellations based on exchange horizon and generalized reciprocity. It also clarifies the three different types of alliance configurations, namely, dyadic alliances (comprising two partners), multipartner alliances (also termed constellations, comprising more than two partners), and alliance networks (comprising a number of alliances, dyadic and/or multipartner).

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  • Lavie, Dovev, Christoph Lechner, and Harbir Singh. “The Performance Implications of Timing of Entry and Involvement in Multipartner Alliances.” Academy of Management Journal 50 (2007): 578–604.

    DOI: 10.5465/amj.2007.25525906Save Citation »Export Citation » Share Citation »

    An empirical study of multipartner alliances focusing on the timing of entry and organizational involvement by members, reporting results in terms of outcomes such as reputation, market success, product introductions, and productivity.

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  • Zeng, Ming, and Xiao-Ping Chen. “Achieving Cooperation in Multiparty Alliances: A Social Dilemma Approach to Partnership Management.” Academy of Management Review 20 (2003): 587–605.

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    This article discusses the problem of resolving the social dilemma of members in multipartner alliances in enhancing cooperation, given the conflicting individual member interests versus the alliance interests.

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Alliance Portfolios and Networks

As with the increasing numbers of multipartner alliances, there is also a growing trend in the formation of alliance portfolios and alliance networks, which can be defined as, respectively, two or more alliances formed by a focal firm and a network of alliances. The study of these particular alliance forms is also attracting greater research attention (see the review of alliance portfolios in Wassmer 2010 and the collection of discussions, in Das 2017, on such pertinent topics as value creation in alliance ecosystems).

  • Das, T. K., ed. Managing Alliance Portfolios and Networks. Charlotte, NC: Information Age, 2017.

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    The chapters in this volume cover some of the specific issues that are pertinent to managing alliance portfolios and alliance networks, such as value creation in alliance ecosystems, alliance portfolio internationalization, and competition dynamics of alliance networks.

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  • Wassmer, Ulrich. “Alliance Portfolios: A Review and Research Agenda.” Journal of Management 36 (2010): 141–171.

    DOI: 10.1177/0149206308328484Save Citation »Export Citation » Share Citation »

    This article comprehensively reviews the alliance portfolio literature and lays out a cogent agenda for further research.

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Future Directions in Alliance Research

Interest in strategic alliances has been growing since around the 1980s. Here, a few worthwhile topics are selected, based on the subjective criterion of tilting away from the traditional and the established. In no particular order, these topics are alliance performance, regulatory focus, interpartner legitimacy, and alliance temporalities. The notion of alliance performance is fraught not only because of conceptual overlaps with related constructs like efficiency, effectiveness, and success, but also on account of the continuing ambiguities in the literature. Specifically, much needs to be done to arrive at a consensus on the substantively different meanings ascribed to performance of the alliance, performance of the individual member firms of the alliance, performance of all the members considered as a complete group, or performance as some kind of joint overall notion. Also in need of consideration are the appropriate measures of performance for dyadic alliances, multipartner alliances, alliance portfolios, and alliance networks. The paper Das and Teng 2003 is just one analysis, pointing to some of the complexities involved, but see also Lunnan and Haugland 2008, which identifies different sets of factors that play a role in short-term and long-term performance. The second area for future research is the role of regulatory focus in understanding the process of alliance formation and operation, as discussed in Das and Kumar 2011. Here, there are some indications of burgeoning research interest, as explored in Gamache, et al. 2015. The third topic is interpartner legitimacy, as proposed in Kumar and Das 2007. This notion of interpartner legitimacy in alliances is unfortunately mentioned often in the literature as if it also relates to the notion of legitimacy of the alliance (as a whole) in the eyes of the world outside the alliance, rather than the intended denotation of the term as referring to the entirely internal factor of legitimacy of the partner firm from the perspective of the focal firm. There are however interdisciplinary contributions that apply the term appropriately and to good ends, as seen in Emmoth, et al 2015. The last in this purposely short list of research topics is alliance temporalities, in the spirit of the attempt in Das 2006. Bakker and Knoben 2015 provides an example of how temporal research in the alliance field holds distinct promise. These four topics of future research in strategic alliances are broadly indicative of the variety of under-examined areas with distinct knowledge-building potential, along with other evolving subfields that will beckon scholarly attention.

  • Bakker, Rene M., and Joris Knoben. “Built to Last or Meant to End: Intertemporal Choice in Strategic Alliance Portfolios.” British Journal of Management 26 (2015): 256–276.

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    An empirical paper showing that firms managing alliance portfolios may be willing to accept a higher incidence of partner opportunism for greater strategic flexibility while making time horizon choices in forming alliances.

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  • Das, T. K. “Strategic Alliance Temporalities and Partner Opportunism.” British Journal of Management 17 (2006): 1–21.

    DOI: 10.1111/j.1467-8551.2006.00482.xSave Citation »Export Citation » Share Citation »

    Argues for exploration of the temporal dimension of partner opportunism, and lays out the matrix of alliance horizons and the temporal orientations of member firms.

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  • Das, T. K., and Rajesh Kumar. “Regulatory Focus and Opportunism in the Alliance Development Process.” Journal of Management 37 (2011): 682–708.

    DOI: 10.1177/0149206309356325Save Citation »Export Citation » Share Citation »

    Discusses the role played by the motivational orientations of alliance member firms, in terms of the regulatory focus (promotion or prevention), in determining the tolerance of partner opportunism in different stages of alliance development.

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  • Das, T. K., and Bing-Sheng Teng. “Partner Analysis and Alliance Performance.” Scandinavian Journal of Management 19 (2003): 279–308.

    DOI: 10.1016/S0956-5221(03)00003-4Save Citation »Export Citation » Share Citation »

    The article proposes a theoretical framework for construing alliance performance in terms of its key antecedents (partner characteristics) and as mediated by alliance conditions (collective strengths, interpartner conflicts, and interdependencies).

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  • Emmoth, Anna, Sabine Gebert Persson, and Heléne Lundberg. “Interpartner Legitimacy Effects on Cluster Initiative Formation and Development Processes.” European Planning Studies 23 (2015): 892–908.

    DOI: 10.1080/09654313.2014.891567Save Citation »Export Citation » Share Citation »

    The article argues for the inclusion of different types of interpartner legitimacy for understanding the internal processes of formation and evolution of cluster initiatives in regional development.

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  • Gamache, Daniel L., Gerry McNamara, Michael J. Mannor, and Russell E. Johnson. “Motivated to Acquire? The Impact of CEO Regulatory Focus on Firm Acquisitions.” Academy of Management Journal 58 (2015): 1261–1282.

    DOI: 10.5465/amj.2013.0377Save Citation »Export Citation » Share Citation »

    The article empirically explores how the regulatory focus of CEOs affects the acquisition decisions of firms.

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  • Kumar, Rajesh, and T. K. Das. “Interpartner Legitimacy in the Alliance Development Process.” Journal of Management Studies 44 (2007): 1425–1453.

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    Introduces the construct of “interpartner legitimacy,” defined as “the mutual acknowledgment by the alliance partners that their actions are proper in the developmental processes of the alliance” (p. 1430), and discusses its role in different types of alliances.

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  • Lunnan, Randi, and Sven A. Haugland. “Predicting and Measuring Alliance Performance: A Multidimensional Analysis.” Strategic Management Journal 29 (2008): 545–556.

    DOI: 10.1002/smj.660Save Citation »Export Citation » Share Citation »

    Based on the performance analysis of one hundred contractual alliances over five years, this paper identifies separate sets of factors that affect short-term and long-term performance as well as termination.

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