Turorial 5: Exploration Vs Exploitation In Alliances

Question 1

Manage Alliance information flow

Answer 1

Make sure your company communicates internally to realise 2nd and 3rd degree advantage and involve senior leadership.

• > Alliance-focused Strategy (DNA)
• > Alliance Office

Question 2

Management practices needed to realise first-degree advantage

Answer 2

1- partner selection: set of evaluation practices like the 4 dimensions of fit
2- alliance initiation: or not
3- alliance problem solving: one contact, manage change over time and adapt goals and capabilities to changing market conditions and increasing trust
4- alliance assessment: survey and compare answers. Alliance office facilitate the discussion.

Question 3

Management practices to realise 2nd and 3rd degree advantage

Answer 3

• build internal network: alliance managers form an informal network inside their firm to help share information about individual alliances so that others can build knowledge about the alliance portfolio and generate better ideas.
• help partners build their network

Question 4

3 domains of exploration/exploitation

Answer 4

-Function: type of an alliance
>upstream R&D
>downstream marketing

-Structure: position of alliance partners in the overall network
>Recurrent alliances
>new alliances

-Attributes: characteristics of alliance partners
>experimentation
>persistence

Question 5

Pressures for exploitation

Answer 5

Derive from organisational inertia. Inertia results from internal forces like irreversible managerial commitment and historic decisions or external fixes such as institutional legislation.

Question 6

Pressures for exploration

Answer 6

Absorptive capacity defined as the ability to value, assimilate and apply external knowledge helps firms identify emerging opportunities and evaluate their prospects thus enhancing exploration.

Question 7

Balance exploration and exploitation

Answer 7

• exploration (absorptive capacity) learn form outsiders

- exploitation (inertia) learn from own experience

Question 8

Learning in an alliance

Answer 8

Involves accessing and internalising critical information, capabilities or skills from a partner and it represents a way to short circuit the learning process compared to other alternatives for developing new competencies.

Question 9

Tacit knowledge

Answer 9

Knowledge that is non verbalised intuitive and unarticulated and it is often considered as the basis for competitive advantage (culture). It is embedded in social relations and transferred primarily through direct contact and observation of behaviour.

Question 10

Explicit knowledge

Answer 10

Can be coded and articulated which makes it easier to transfer primal army verbally.

Question 11

Trust

Answer 11

Willingness of a party to be vulnerable to the action of another party based on the expectation that the other party will perform a particular action important to the trust or irrespective of the ability to monitor and control that other party.

Question 12

3 dimensions of trust

Answer 12

1- integrity (moral and ethical behaviour) => willingness to take risks
2- benevolence (positive or egocentric orientation of the trustee)=> greater success
3- ability (general competence and expertise) => share more tacit knowledge

Question 13

Paradox in knowledge sharing p

Answer 13

Ravit knowledge constitues a source of competitive advantage but firms are more concerned with protecting their explicit knowledge instead which had a limited effect on performance