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