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changing business strategically > strategic alliances and strategic change > Flashcards

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
Q

outbound spillover rents

A

gains by the partner (losses for a focal firm) from resources that a focal firm did not intend to share

26
Q

effect of opportunistic behavior

A

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
Q

the relational view

A

Alliances contribute to a firm’s competitive advantage because they enable firms to build and exploit relationship-specific assets

28
Q

relationship specific assets

A

assets that are valuable only within a specific relationship’s context

29
Q

types of relationship specific assets

A

partner specific absorptive capacity
knowledge-sharing routines
trust

30
Q

partner specific absorptive capacity

A

the ability to understand and evaluate, and learn the knowledge of a specific partner

31
Q

absorptive capacity

A

the ability to locate valuable external knowledge, evaluate its usefulness, and utilize it for commercial purposes

32
Q

partner specific absorptive capacity in alliances

A

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
Q

knowledge sharing routines

A

a regular pattern of interfirm interactions that permits the transfer, recombination, or creation of specialized assets

34
Q

knowledge sharing routines in an alliance

A

knowledge-sharing routines facilitate observation and joint application of know-how

35
Q

information

A

easily codifiable knowledge that can be transmitted without loss

36
Q

know-how

A

knowledge that is tacit, sticky, complex, and difficult to codify

37
Q

why would a firm with valuable know-how allow the development of knowledge-sharing routines and share its know-how?

A

sharing know-how may mean erosion of competitive advantage
it is a big incentive for potential partners to collaborate

38
Q

trust

A

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
Q

trust in alliances

A

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
Q

categories of alliance success factors

A

partner selection
alliance management

41
Q

partner selection

A

partner complementarity
partner compatibility
partner commitment

42
Q

partner complementarity

A

the extent to which a partner’s resources will increase the value of the company’s resources

43
Q

partner resources should be:

A

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
Q

partner compatibility

A

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
Q

partner commitment

A

the degree to which the partner will carry out its task and actually work for the alliance

46
Q

aspects of alliance management

A

coordination mechanisms
knowledge exchange mechanisms
trust

47
Q

coordination mechanisms

A

used to coordinate the execution of alliance tasks between partners
(should be clear and explicit)
trust help

48
Q

knowledge exchange mechanisms

A

to coordinate and set rules on how and how much partners will share with each other

49
Q

knowledge exchange mechanisms implication

A

newly learned knowledge should be codified and diffused within the company

50
Q

Changes to the traditional RBV in networked environments

A

(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
Q

effect of strong isolating mechanisms of focal firm

A

higher internal rent and lower outbound spillover rents, thus enhanced competitive advantage

52
Q

effect of strong isolating mechanisms of alliance partners

A

lower internal rent and lower inbound spillover rent, reduced competitive advantage

53
Q

effect of relational rents

A

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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