Learning from competing partners: outcomes and durations of scale and link alliances in Europe, North America and Asia

Abstract

This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances.

Strategic Alliance Structures

“…For example, Hagedoorn (1993) distinguishes within the broad domain of R&D alliances between knowledge access, cost sharing, environmental monitoring, market access, product range expansion, and so on. Some scholars have generalized from the specific functional orientation to distinguish between alliances that involve more or less depth of interaction (Bensaou & Venkatraman, 1995), and to differentiate alliances' fundamental economic logics for value creation, for example, "handover," "pooling," and "trading" alliances based on how partners choose to exchange or integrate their resources (Stafford, 1994), or "scale" and "link" alliances (Dussauge, Garrette, & Mitchell, 2000). 4 • Partner-characteristics-based classifications focus on traits of the individual organizations involved in the alliance, such as their industry affiliation, or relative position in the value chain of their industry (to distinguish horizontal, vertical, and lateral alliances, e.g., in Baum, Calabrese, & Silverman, 2000), their geographic location (to distinguish domestic and international, or proximate and distant alliances, e.g., in Sorenson & Stuart, 2001), and more generally partners' institutional context (to identify unique properties of public-private partnerships, e.g., in Rufín & Rivera-Santos, 2012).…”

SMEs' Ruler Credit and Enterprise Alliance Strategy: A Social Capital Perspective

“…For example, in the latter, managers have the motivation to strengthen the control of a subsidiary by strengthen its strategic alliance, while the former would not [7]. Besides, business groups and external linkages between enterprises are more closely, more conducive to use the social capital to service strategic alliance, which is what we often call a "Matthew" [8][9][10]. Therefore, H3 need to be amended, compared with an independent legal SMEs, enterprise groups' ruler credit function to alliance strategy in positive promoting is stronger rather than weaker.…”

Understanding alliance evolution and termination: Adjustment costs and the economics of resource value

“…Parent firm or internal attributes include factors such as parent firm capabilities (Reuer et al, 2002), level of parent firm support (Steensma and Lyles, 2000), cross-cultural differences (Hennart and Zeng, 2002), competitive rivalry among the parents (Kogut, 1989;Park and Ungson, 1997), and prior partnering experience (Makino et al, 2007;Reuer and Zollo, 2005), both general and partner-specific. Alliance level or interfirm attributes include factors such as type of alliance, for example, scale or link (Dussauge et al, 2000;Hennart, 1988), related or unrelated (Cui and Kumar, 2012), scope of alliance (i.e. broad or narrow) (Reuer et al, 2002), extent of resource similarity or dissimilarity (Dussauge et al, 2000), and control structure (Faems et al, 2008;Malhotra and Lumineau, 2011;Steensma and Lyles, 2000).…”