The Performance Implications of Timing of Entry and Involvement in Multipartner Alliances (original) (raw)
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Management Science
Firms collaborate to develop and deliver new products. These collaborations vary in terms of the similarity of the competencies that partnering firms bring to the alliance. In same-function alliances, partnering firms have similar competencies, whereas in cross-function alliances, partners have very different competencies. On examining managers' view of these alliances, we find that, on average, same-function alliances are expected to perform better than cross-function alliances, holding fixed the level of inputs. A game-theoretic analysis shows that this apprehension about cross-function alliances is consistent with a Pareto-inferior equilibrium. A Pareto-superior equilibrium, however, suggests that partners in cross-function alliances may invest more in their alliances than those in same-function alliances. It is also often believed that increasing the number of partnering firms is not conducive for collaborative effort. Our analysis shows that this belief is correct for same-...
2016
Firms collaborate to develop and deliver new products. These collaborations vary in terms of the similarityof the competencies that partnering firms bring to the alliance. In same-function alliances, partnering firms have similar competencies, whereas in cross-function alliances, partners have very different competencies. On examining managers ’ view of these alliances, we find that, on average, same-function alliances are expected to perform better than cross-function alliances, holding fixed the level of inputs. A game-theoretic analysis shows that this apprehension about cross-function alliances is consistent with a Pareto-inferior equilibrium. A Pareto-superior equilibrium, however, suggests that partners in cross-function alliances may invest more in their alliances than those in same-function alliances. It is also often believed that increasing the number of partnering firms is not conducive for collaborative effort. Our analysis shows that this belief is correct for same-func...
Performance of alliances: formative stages and changing organizational and environmental influences
R and D Management, 1999
There is near unanimous agreement that the performance of alliances usually falls short of expectations. Studies have identified several generic reasons for poor performance: inadequate communication, lack of trust, insufficient complementarity of resources, inappropriate organizational structures and processes, and so on. While we broadly agree with these, knowledge of these self-evident reasons does not seem to have turned the tide of bad news in any way. We show in this paper that it is important to unpack a broad set of antecedent variables, including the ones identified above, and to track them over the crucial formative stages of an alliance. Based on our interviews with 24 senior and middle level managers and professionals of a focal company about 10 of its major alliances, we identify the following four formative stages of an alliance: (1) Recognition, (2) Research, (3) Relationship Setup , and (4) Ramp up. We show that the primary predictors of success across these stages are not identical, nor their effect uniform. Further, proper completion of all the preceding stages is essential for the success of subsequent stages. We finally show that the compaction of the various successful stages, in particular of the Ramp-Up stage, is one of the best predictors of overall success of an alliance.
Conduits of Innovation or Imitation? Assessing the Effect of Alliances on the Persistence of Profits
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This paper examines if a firm's alliances affect the persistence of its financial performance. The literature suggests two conflicting views concerning this effect. In particular, access to resources and innovation and the risk of imitation from alliances can have different impacts on performance. In our empirical analysis, based on a panel of 509 firms covering the years 1992 to 2002, return on assets was regressed on the number of alliances and other control variables using hierarchical linear modeling. Results support the positive view of alliances as mechanisms to sustain competitive advantage and escape from competitive disadvantage through access to external, valuable resources held by other firms. Alliances also help firms to constantly innovate and buffer themselves from external shocks that erode existing advantages. Our results, however, may be specific to the period and the institutional context under consideration and we do not distinguish between types, purposes and "strength" of alliances. We contribute to the debate about profit persistence by examining one particular factor that has been neglected in the literature: the extent to which firms engage in alliances with other actors. From a managerial perspective, our study shows that alliances can be used as an effective tool to support superior performance or avoid lock-in into inferior performance.
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The premise of Austrian economics on entrepreneurial discovery suggests that mutual knowledge about market participants defines who will acquire potential information about opportunities to bring future products into existence. Building upon this argument, this research investigates the role of networking alliances in information acquisition and its lagged effect on the new product performance of the firm. By using a longitudinal analysis, the study shows that a firm improves its new product performance as it increases the number of repeated partners and its centrality position relative to others in the technology collaboration network. D