Tutorial 2: Theoretical Background

Question 1

Open vs closed ties

Answer 1

The firm’s partners are not connected to one another vs they are

Question 2

Hub-and-Spoke advantages

Answer 2

• information: aggregates private knowledge from disconnected spokes
• cooperation: enforce partners’ cooperativeness through bilateral agreements
• Power: ability to put partners in competition for its attention or resources

Question 3

Hub-and-Spoke disadvantages

Answer 3

• isolation
• competitiveness between partners: open ties are hard to maintain over long period
• lack of trust: they know that they can be played off each other

Question 4

Integration advantages

Answer 4

• Information: share common knowledge quickly
• cooperation: ensure good conduct of individual partners
• Power: mobilise collective resources to fight common ennemies

Question 5

Integration disadvantages

Answer 5

• reduced potential for radical innovation
• difficulty terminating
• costly impact of termination (+impact on reputation)

Question 6

Hybrid disadvantages

Answer 6

• less trust
• fewer breakthrough innovations
• difficulty managing

Question 7

Configuration Alignment Tool (CAT)

Answer 7

• industry dynamism
• breadth of product or service range
• market power

Hub-and-spoke: +++
Integration: - - -

Question 8

RBT assumptions

Answer 8

1- heterogeneity of Strategic resources

2- imperfect mobility of resources across firms

Question 9

Definition: Firm resources

Answer 9

Include all assets, capabilities, organisational processed, firm attributes, knowledge etc. controlled by a firm that enable the firm to conceive or implement strategies that improve its efficiency and effectiveness.

• Physical capital resources
• Human capital Resources
• Organisational capital resources: reporting, planning

Question 10

Definition: Competitive advantage

Answer 10

When a firm is implementing a value creating strategy not simultaneously implemented by any current or potential competitors.

Question 11

Definition: Sustainable competitive advantage

Answer 11

When a firm is implementing a value creating strategy not simultaneously implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy.

Question 12

To hold the potential of a sustained competitive advantage a resource must be:

Answer 12

VRIS

• Valuable
• Rare
• Imperfectly Imitable:
  - > path dependency
  - > causal ambiguity
  - > social complexity
• Non-substitutability

Question 13

Problem with the RBV assumption

Answer 13

Proprietary assumption of RBV holds that resources that confer competitive advantage must be owned or at least controlled by the firm.

Question 14

Definition: Network resources

Answer 14

External resources embedded in the firm’s alliance network that provide strategic opportunities and affect firm behaviour and value.

Question 15

Impact of network alliances on the interconnected firm’s competitive advantage (Lavie)

Answer 15

• internal rent: private benefit
• appropriated rent: common benefit
  
  • > relative absorptive capacity: the bigger the learning capability, the bigger the rent for the focal firm
  • > relative scale and scope of resources: the smaller compared to the partner, the bigger the rent
  • > contractual agreement: the more advantageous, the bigger the rent
  • > relative opportunistic behaviour: the more opportunistic a firm is relative to its partner the bigger the rent
  • > relative bargaining power: the stronger the power the bigger the rent
• inbound spillover rent
• outbound spillover rent

Question 16

Polled alliance

Answer 16

When the intersection of shared resources sets is substantial to achieve greater scale and enhanced competitive position in the industry.

Question 17

Complementary alliance

Answer 17

When the intersection is diminutive to achieve synergies by employing distinct resources that are difficult to accumulate in combination by any given firm.