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strategic alliances and strategic change Flashcards

1
Q

strategic alliances

A

voluntary collaboration agreements between two or more organizations to achieve a business purpose

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2
Q

strategic alliances enable companies to access:

A

new resources
new learning opportunities

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3
Q

governance of strategic alliances

A

contract
joint venture

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4
Q

contract strategic alliances

A

a contract specifies how the alliance will work and the roles and responsibilities of partners

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5
Q

pros and cons of contracts

A

relatively easy to set up
not all future situations can be foreseen at the time of contract

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6
Q

joint venture

A

partners form a separate company that they jointly own to carry out the purpose of the alliance

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7
Q

pros and cons of a joint venture

A

create incentives to collaborate and to work for the success of the alliance
costly to set up and dissolve

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8
Q

benefits of strategic alliances

A

access to VRIN resources without having to own them
exploiting complementarities
accessing outside knowledge and ideas

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9
Q

network resources

A

external resources embedded in the firm’s alliance network that provide strategic opportunities and affect firm behavior and value

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10
Q

two different degrees of alliances according to the convergence of resources

A

pooling alliances (partners pool their resources to achieve a greater scale and enhance competitive position in their industry)
complementary alliance (firms seek to achieve synergies by employing distinct resources that are difficult to accumulate in combination by any given firm)

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11
Q

exploiting complementarities

A

alliances can quickly, but temporarily, expand a firm’s resource base to include new and complementary resources

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12
Q

accessing outside knowledge and ideas

A

Alliances can provide new perspectives to how to reconfigure resources differently as a response to external developments
Alliances can also enable firms to internalize their partners knowledge through organizational learning

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13
Q

four types of rent in alliances

A

internal rents
relational rents
inbound spillover rents
outbound spillover rents

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14
Q

internal rents

A

gains that a firm generates based on its own resources, private benefits enjoyed exclusively by the focal firm

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15
Q

factor affecting internal rents

A

complementary resources increases internal rents as they make the firms own resources more valuable

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16
Q

relational rents

A

Gains that a firm generates based on its relationship-specific assets with its alliance partners

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17
Q

ways to increase relational rents

A

investing in developing knowledge-sharing routines and trust (thus developing partner-specific absorptive capacity)
having complementary resources (greater incentives to cooperate), and compatible organizational structures and cultures
repeated collaborations with the same partner

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18
Q

factors influencing relational rents

A

(1) relative absorptive capacity (high relative absorptive capacity -> high appropriation of relational rents)
(2) relative scale and scope of resources (small relative scale and scope of focal firm’s shared resources -> high appropriation of relational rents)
(3) contractual agreement (favorable contract -> high appropriation of relational rents)
(4) relative opportunistic behavior (relative opportunistic behavior of partner -> low appropriation of relational rents)
(5) relative bargaining power (strong relative bargaining power of partner -> low appropriation of relational rents)

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19
Q

inbound spillover rents

A

gains from resources that the partner did not intend to share

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20
Q

ways to limit knowledge leakages

A

coevolving trust and conflict resolution mechanisms

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21
Q

factors affecting the ability to extract spillover rents from the partner’s resources

A

opportunistic behavior
bargaining power
absorptive capacity

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22
Q

learning races

A

when both firms pursue the objective of internalizing the resources to improve their competitive position

23
Q

acting opportunistically

A

when one firm pursues the objective of internalizing the resources to improve their competitive position

24
Q

effect of learning races and acting opportunistically

A

result in unintended leakage of rents, with no synergetic value creation

25
outbound spillover rents
gains by the partner (losses for a focal firm) from resources that a focal firm did not intend to share
26
effect of opportunistic behavior
greater inbound spillover rents but perceived as opportunistic behavior leading to the partner raising its barriers to protect its resources, damage of trust, and reduced relational rents in the focal and future alliances
27
the relational view
Alliances contribute to a firm’s competitive advantage because they enable firms to build and exploit relationship-specific assets
28
relationship specific assets
assets that are valuable only within a specific relationship's context
29
types of relationship specific assets
partner specific absorptive capacity knowledge-sharing routines trust
30
partner specific absorptive capacity
the ability to understand and evaluate, and learn the knowledge of a specific partner
31
absorptive capacity
the ability to locate valuable external knowledge, evaluate its usefulness, and utilize it for commercial purposes
32
partner specific absorptive capacity in alliances
through informal interfirm interactions, individuals within the alliance get to know each other well enough to know who knows what, and where critical expertise resides within each firm
33
knowledge sharing routines
a regular pattern of interfirm interactions that permits the transfer, recombination, or creation of specialized assets
34
knowledge sharing routines in an alliance
knowledge-sharing routines facilitate observation and joint application of know-how
35
information
easily codifiable knowledge that can be transmitted without loss
36
know-how
knowledge that is tacit, sticky, complex, and difficult to codify
37
why would a firm with valuable know-how allow the development of knowledge-sharing routines and share its know-how?
sharing know-how may mean erosion of competitive advantage it is a big incentive for potential partners to collaborate
38
trust
Trust in the partner that the partner will not engage in opportunistic behaviour by abusing its access to focal firm resources and know-how
39
trust in alliances
Is earned over time within a single relationship or over repeated relationships Reduces the need for costly knowledge protection mechanisms Encourages the sharing of valuable knowledge
40
categories of alliance success factors
partner selection alliance management
41
partner selection
partner complementarity partner compatibility partner commitment
42
partner complementarity
the extent to which a partner's resources will increase the value of the company's resources
43
partner resources should be:
similar enough to make sense of each other's resources and their value, but different enough to facilitate unique resource combinations and valuable learning opportunities
44
partner compatibility
the level of similarity between alliance partners in terms of organizational structures (hierarchical versus fluid), the way people interact with one another (formal versus informal), and the way decisions are made (slow and firm versus quick and dirty) (big differences lead to frustration, increased coordination challenges, and reduced knowledge exchange)
45
partner commitment
the degree to which the partner will carry out its task and actually work for the alliance
46
aspects of alliance management
coordination mechanisms knowledge exchange mechanisms trust
47
coordination mechanisms
used to coordinate the execution of alliance tasks between partners (should be clear and explicit) trust help
48
knowledge exchange mechanisms
to coordinate and set rules on how and how much partners will share with each other
49
knowledge exchange mechanisms implication
newly learned knowledge should be codified and diffused within the company
50
Changes to the traditional RBV in networked environments
(1) weakened resource heterogeneity assumption (alliances facilitate asset flows among interconnected firms) (2) weakened imperfect mobility assumption (alliances can serve as the means for mobilizing resources that have traditionally been considered immobile)
51
effect of strong isolating mechanisms of focal firm
higher internal rent and lower outbound spillover rents, thus enhanced competitive advantage
52
effect of strong isolating mechanisms of alliance partners
lower internal rent and lower inbound spillover rent, reduced competitive advantage
53
effect of relational rents
higher relational rents shared by focal firm and partners --> higher potential for accrual of inbound and outbound spillover rents

changing business strategically (6 decks)

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