faculty.baruch.cuny.edufaculty.baruch.cuny.edu/tkdas/publications/das-teng_jms02...baruch college,...

© Blackwell Publishers Ltd 2002. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UKand 350 Main Street, Malden, MA 02148, USA.

THE DYNAMICS OF ALLIANCE CONDITIONS IN THE ALLIANCEDEVELOPMENT PROCESS

T. K. D

Baruch College, City University of New York

B-S T

George Washington University

One of the key issues in understanding the developmental processes of strategicalliances is how the alliance conditions change over the different stages of alliancedevelopment. A related question concerns the nature of the co-evolutionarydynamics of alliances in terms of their constituent partner firms. In this article wepropose an integrated process model of alliances that is based on alliance con-ditions, alliance developmental stages, and an alliance system comprising co-evolutionary elements. We suggest that alliance conditions, or the key charac-teristics of an alliance at any given moment, link the alliance environment (firmcharacteristics) and the alliance development process. We also explore how specific patterns of alliance conditions have differential impacts on the interactiveelements of the alliance co-evolutionary system.

Business organizations have inevitably to adapt to an increasingly diversifyingworld of accelerating business activities. Some notable trends in this endeavourinclude greater local responsiveness to international business developments, work-force diversity, and decentralization of management and corporate governance.Devising appropriate forms of management and organization is one way that firmsadapt to this changing environment. One form of organization with the requisiteinternal variety is strategic alliances, or interfirm cooperative arrangements aimedat achieving the strategic objectives of the partners. Alliances have been prolifer-ating in the past 20 years (Harbison and Pekar, 1998). Many researchers haveviewed alliances as a hybrid form of organization because they blend the featuresof both market transactions and internalization (Powell, 1987; Thorelli, 1986).

Address for reprints : T. K. Das, Department of Management, Zicklin School of Business, BaruchCollege, City University of New York, One Bernard Baruch Way, Box B9-240, New York, NY 10010,USA ([email protected]).

Journal of Management Studies 39:5 July 20020022-2380

Alliances are regarded as an alternative mode of organization, i.e., a network orga-nizational form that is subject to the multipronged control of at least two partners( Jarillo, 1988). In addition, strategic alliances have considerable variety in theirspecific governance structures. Although alliances in the form of joint ventures arenothing novel in the arena of international business, the emergence of a wholerange of alliance structures, such as joint marketing and cross licensing, signifi-cantly adds to the variety of organizational forms. Also, these alliance forms maybe arrayed along a continuum in terms of the degree of internalization.

Substantial research has been carried out on strategic alliances, especially theirmotivations, antecedents, formation, and outcome. However, with few exceptions(e.g., Ring and Van de Ven, 1994), researchers have paid far less attention to thedevelopmental processes of strategic alliances, i.e., the processes through whichalliances are negotiated, formed, operated, evaluated, reformed, and terminated.Koza and Lewin (1998) list six important research streams in alliance, such asalliance phenomenon, choosing alliances over other governance structures, andalliance performance. None of these research streams, however, has a process orientation.

In recent years, increasing research attention has been focused on alliance devel-opment processes. Despite these efforts, however, our understanding of the alliancedevelopmental processes remains quite limited. For example, although alliancesare known to be highly evolutionary and unstable (Das and Teng, 2000a), it is stillunclear how and why changes take place in alliances. Little is known about howalliances and their contexts – including the characteristics of the partner firms –co-evolve in a dynamic fashion. Co-evolution refers to the simultaneous develop-ment of organizations and their environment, independently as well as interac-tively. Koza and Lewin rightly note that ‘co-evolutionary research on allianceswhich incorporates . . . process variables remains an unexplored area of research’(1998, p. 258).

We believe that a more comprehensive conception of developmental processesis critical for an adequate understanding of strategic alliances. Alliances are sig-nificantly different from formal organizations or hierarchies in terms of their evolutionary processes. The developmental processes and stages in formal organizations (see, for example, Greiner, 1972) are, thus, not necessarily applica-ble to alliances. For instance, the initial negotiation stage among prospectivepartner firms is unique to strategic alliances. Also, the interactions between analliance and its environment are much more complicated than in the case of singleorganizations as there are at least two firms involved in an alliance. Thus, under-standing alliance developmental processes is more than merely envisioning severalstages. It is also, importantly, about the dynamics of alliance conditions that influ-ence the unfolding of these processes across stages in tandem with the co-evolution of the alliance and its constituent partner firms.

In this paper, we suggest that alliances go through a development process con-sisting of the three stages of formation, operation, and outcome. We also discusshow the evolution of alliances along this process is dictated by the changing conditions of alliances, as reflected by their collective strengths, interpartner con-flicts, and interdependencies. Furthermore, alliances co-evolve with their environ-ment, comprising the characteristics of the partner firms. The co-evolvingdynamics can be examined through the alliance condition variables and selectedfirm characteristics.

726 . . .

© Blackwell Publishers Ltd 2002

We divide this article into four parts. We first review the alliance process modelsin the literature. Second, we propose the notion of alliance conditions – compris-ing collective strengths, interpartner conflicts, and interdependencies – and discusshow firm characteristics determine these conditions. In the third section weexamine the role of alliance conditions in the different stages of alliance develop-ment. Finally, we explore the co-evolution of alliances and their constituentpartner firms.

Several process models have recently been proposed in the alliance literature. Webriefly review these and identify their major limitations. We adopt the definitionof process proposed by Van de Ven (1992, p. 169): ‘a sequence of events thatdescribes how things change over time’. Our review centres on developmentalstages, alliance conditions, and co-evolution (see Table I).

Developmental Stages of AlliancesMany researchers have focused on the developmental stages of alliances – that is,the process from initiation and negotiation to alliance evaluation and even termi-nation (Borch, 1994; Kanter, 1994; Larson, 1992). We list several stage-models ofthe alliance development process in Table II. For example, Brouthers et al. (1997)propose a five-stage process model that includes selecting the mode of operation,locating partners, negotiation, managing the alliance, and evaluating alliance per-formance. Similarly, Das and Teng (1997) suggest that the process may be dividedinto seven stages – choosing an alliance strategy, selecting partners, negotiation,setting up the alliance, operation, evaluation, and modification.

Ring and Van de Ven’s (1994) framework probably best exemplifies this devel-opmental stages approach. In a process model of interorganizational relationships,they discuss a repetitive process consisting of stages like negotiation, commitment,

727


Table I. Approaches to alliance development

Authors Process approaches

Developmental Alliance conditions Co-evolution ofstages of in the developmental alliances and theiralliances process environment

Ariño and de la Torre (1998) Yes Yes YesBorch (1994) Yes No NoBrouthers et al. (1997) Yes No NoDas and Teng (1997) Yes No NoDoz (1996) Yes Yes NoKanter (1994) Yes No NoKoza and Lewin (1998) No No YesKumar and Nti (1998) Yes No NoLarson (1992) Yes No NoNiederkofler (1991) Yes Yes NoRing and Van de Ven (1994) Yes No No

and execution. The overall process is moderated by continuous assessments basedon efficiency and equity. Ring and Van de Ven identify key issues in each stage.The negotiation stage is highlighted by interactions between formal bargainingand informal sense making. The commitment stage is characterized by both formallegal contract and psychological contract between the partners. The executionstage contains both role interactions and personal interactions. Based on thesestages and key issues, the authors explain the emergence, evolution, and dissolu-tion of interorganizational relationships.

Although these frameworks reveal important stages and key issues within eachstage, a significant limitation is that the underlying factors that may affect the entiredevelopmental process are not examined. In other words, it is unclear whether analliance will always move from one stage to the next and what factors may derailthe sequence or the process.

Alliance Conditions in the Developmental ProcessThe second major approach incorporates alliance conditions in the entire devel-opmental process. This is different from much of the extant alliance research thatexamines only the alliance formation condition – for example, Eisenhardt andSchoonhoven (1996), Gulati (1995), Oliver (1990). The essence of this approachis that alliance conditions are the key to understanding the transition from onealliance stage to another. Alliance conditions inform the differences across alliancesin terms of the particular stages of their developmental process. For example, weneed to understand why some alliances are reformulated very soon after their for-mation while others remain relatively more stable. The answer is that each stage

728 . . .


Table II. Selected alliance process models

Models in the Model summaryliterature

1. Formation 2. Operation 3. Outcome

Brouthers et al. • Selecting mode of operation • Managing • Evaluating (1997) • Locating partners the alliance performance

• Negotiation

Das and Teng • Choosing an alliance strategy • Operation • Evaluation(1997) • Selecting partners • Modification

• Negotiation• Setting up the alliance

D’Aunno and • Emergence of a coalition • Transition to • MaturityZuckman (1987) a coalition • Crossroads

Kanter (1994) • Selection and courtship • Learning to • Changing • Getting engaged collaborate within• Setting up housekeeping

Ring and Van • Negotiation • Execution • Assessmentde Ven (1994) • Commitment

Spekman et al. • Anticipation • Coordination • Stabilization(1996) • Engagement • Investment • Decision

• Valuation

has its own necessary conditions, so that an alliance cannot move to the next stageunless certain conditions are present.

Based on several case studies, Niederkofler (1991) proposes an evolutionaryframework of alliances that is based on two essential conditions – strategic fit andoperational fit. Strategic fit refers to the necessary resource endowments of partnerfirms that are sufficient for pursuing mutual objectives. Operational fit is about the compatibility of the committed resources and the problems in operating thealliances. Changes in these two conditions prompt the alliance to go through eitheradjustment or renegotiation. A persistent misfit can lead to either dormancy oralliance exit. Inkpen and Beamish (1997) discuss how learning changes the bar-gaining power of partners (one specific condition), which affects the subsequentdevelopmental process of alliances.

Doz (1996) proposes that there are several sets of alliance conditions – task defi-nition, partner’s routines, interface structure, and expectations of performance,behaviour, and motives. These conditions determine how the learning processunfolds in an alliance – initial learning behaviour changes these conditions, whichin turn lead to certain changes in learning behaviour. This way the developmen-tal processes of alliances can be monitored through a close examination of allianceconditions. Doz’s extensive field studies provide support for this view.

Although the alliance conditions approach recognizes the central role of allianceconditions in alliance development, a critical problem is that the key conditionvariables have not been developed. Also, existing research does not pay adequateattention to the determinants of alliance conditions – such as the characteristicsof the partner firms. We will attempt to address both these problems.

Co-evolution of Alliances and Their EnvironmentThe third major process approach emphasizes the co-evolution of alliances andtheir environment. This approach has only recently emerged in the alliance lit-erature. The idea of co-evolution is rooted in the tradition of population ecologyand evolutionary theory (Hannan and Freeman, 1977; McKelvey, 1982). Appliedto strategic alliances, in this view, not only does the external environment affectthe alliance developmental processes, but the alliance activities affect the internalalliance environment as well – for example, the resource profiles, strategic objec-tives, market positions, and reputation of the constituent partner firms.

Ariño and de la Torre (1998) test a model of alliance evolution that is based onthe work of Ring and Van de Ven (1994) and Doz (1996). Following Doz, theyincluded the factor ‘external change’. However, the role of external change is verylimited in their model, affecting only reevaluation in alliances. Thus far there isno research that describes a comprehensive co-evolution process of alliances andtheir environment.

As Table I shows, much of the alliance process research has adopted theapproach relating to alliance developmental stages. A few have incorporatedalliance conditions into the process. Only two articles have touched upon co-evolution, but have done so in a rudimentary manner. We suggest, therefore, thatthere are at least two major gaps in the alliance process literature. First, allianceconditions and their determinants have not received adequate research attention.Second, the co-evolution perspective needs to be developed much further. Theessential elements in an alliance co-evolution framework are also unclear. Clearly,this co-evolution approach should integrate other process variables. Thus, we need

729


an integration of the three major alliance process approaches. We attempt here to do so (1) by discussing in some detail the nature of alliance conditions andtheir varying influences in the alliance developmental process (see Figure 1), and(2) by proposing the idea of an alliance co-evolution system that comprises theseparate and interwoven evolutions of the alliance and its constituent partnerfirms.

Alliance conditions are the characteristics of an alliance at any given moment inthe life of the alliance. They describe the state of an alliance. Researchers havetalked about ‘initial conditions’ and ‘revised conditions’ of alliances (Doz, 1996;Gulati, 1998) as well as ‘preconditions’ and ‘conditions to build’ (Larson, 1992)and exchange conditions ( Jones et al., 1997) in networks. We designate all theseterms collectively as ‘alliance conditions’ irrespective of the particular stage of thealliance. We reason that – as Doz (1996) demonstrates – there are a common setof variables that capture the essence of alliance conditions across the develop-mental stages. Doz notes that alliance conditions, as measured by a set of vari-ables, dynamically evolve over time as initial conditions are replaced by revisedconditions. Ariño and de la Torre (1998) also find that alliance conditions aredynamic in nature throughout the life of an alliance because they ‘govern the inter-actions between the partners . . .’ (p. 308). The existence of such common condi-tion variables is also clear in Kogut’s (1988) observation that ‘the competitiveconditions that motivate the creation of a joint venture may also be responsiblefor its termination’ (p. 169). Based on a review of the literature, we propose thatthe following three variables systematically capture the key aspects of alliance conditions – collective strengths, interpartner conflicts, and interdependencies.

Together, these three condition variables seem to cover three critical aspects ofalliances – positive effects of alliances (collective strengths), negative effects ofalliances (interpartner conflicts), and the need for alliances (interdependencies). Allthree condition variables also deal with the interrelationships between the part-ners. By comparison, the alliance condition variables proposed by Doz (1996) –task definition, partners’ routines, and interface structure – tend to focus more onthe technical aspects of alliance operations and less on the relational aspects. Assuch, Doz’s list seems to leave out a number of important issues, such as trust,commitment, and capabilities. Our list, in contrast, deals with these issues directlyor indirectly. For example, trust and commitment are incorporated within the construct of interpartner conflicts, while capabilities are part of the collectivestrengths.

Collective StrengthsThe collective strengths of an alliance are the aggregated resource endowmentsof partner firms in relation to the specific strategic objectives that they aim topursue jointly. The resource-based view of the firm suggests that alliances are formed to obtain access to other firms’ critical resources (Das and Teng, 2000b). The purpose is to have sufficient resources to pursue value-creatingstrategies. Bringing complementary resources into an alliance is considered a key determinant of economic rent generated from alliances. The chances

730 . . .


731

© B

lackwell Publishers L

td 2002

ALLIANCEENVIRONMENT

FirmCharacteristics

ALLIANCECONDITIONS

1. Collective Strengths2. Interpartner Conflicts3. Interdependencies

FORMATION OPERATION

GrowthReformationTermination

OUTCOME

StabilizationReformationDeclineTermination

A B C D

I

H

G

E

F

Figure 1. Alliance conditions and alliance development

732 . . .


of success increase when the collective strengths of the partner firms are enhancedby combining their market power, technology, and other key resources.

Interpartner ConflictsThe second alliance condition variable – interpartner conflicts – refers to thedegree of divergence in partners’ preferences, interests, and practices in an alliance (Hardy and Phillips, 1998; Kogut, 1989). Interpartner conflicts are animportant aspect of alliances because effective cooperation demands a relativelylow level of conflict. As such, conflict-resolution has garnered considerableresearch attention.

While there are various reasons for interpartner conflicts, they seem to fall intothree principal categories. First, partner firms may have very different organiza-tional routines, technologies, decision making styles, and preferences that do notfit very well (Olk, 1997). When firms are vastly different, it takes more money, time,and effort to coordinate their efforts. When firms scramble to have it their ownindividual way, conflicts inevitably arise. The second source of interpartner con-flicts has to do with the private interests and opportunistic behaviour of partnerfirms, which are emphasized in transaction cost economics. Firms may haveincompatible goals in the alliance that prompt maximizing their private benefitswithout advancing the common benefits of partners. Firms may also behaveopportunistically to appropriate partners’ tacit knowledge and know-how anddeliver substandard products. The third type of interpartner conflicts arise fromoutside the alliance. Partner firms may be fierce competitors in the same market,so that their separate interests may clash.

InterdependenciesInterdependencies refer to a condition in which both parties benefit from dealingwith each other (Levine and White, 1961). In technology-sourcing alliances,Steensma and Corley (2000) found that interdependencies critically moderate theperformance of the alliances. According to the resource dependence theory, firmsattempt to manage their dependence on other firms by engaging in various inter-firm relationships. In any relationship, the need for another firm’s resources createsa sense of dependence. Although dependence on other firms is a prerequisite fora firm to consider alliances, unidirectional dependence or asymmetrical depend-ence is not always sufficient for alliance formation. The extreme of asymmetricaldependence is when A depends on B while B does not at all depend on A. Noalliance will be formed under this condition. Only when the partners mutuallydepend on each other will cooperation take place. Empirically, Gulati (1995) confirms that interdependencies do contribute to alliance formation.

So far we have discussed the three alliance condition variables. We now examinea key determinant of alliance conditions in terms of the alliance environment –namely, the characteristics of the partner firms. The alliance environment asrelated to alliance co-evolution would generally include various aspects of theorganizational, competitive, and institutional environment of the alliance. In this article we focus on the organizational environment only (namely, the characteristics of the two or more potential partners) in order to keep our discussion reasonably brief in this initial effort. Accordingly, we select several key factors that exemplify the way that partner firm characteristics affect allianceconditions.

Firm Characteristics and Alliance ConditionsMarket commonality. In competitor analysis, market commonality is ‘the degree ofpresence that a competitor manifests in the markets it overlaps with the focal firm’(Chen, 1996, p. 106). The notion is based on the comparative importance of anindustry to the firms – that is, the percentage of their total revenue – and theirmarket share in that industry. A high market commonality suggests that the part-ners have a high degree of overlap in their overall operations.

Market commonality is likely to be positively related to collective strengths.When partner firms compete mainly in the same market or industry, their com-bined market share and market power are likely to be high, as compared to twofirms from different industries. A higher combined market share is an indicator ofhigh collective strengths in the industry. That is the reason there are many alliancesformed by direct competitors. However, this does not mean that the level of inter-dependencies necessarily goes up with market commonality. Firms with little operational overlap may well need each other as much as direct competitors.

Increasing market commonality will contribute to increased interpartner con-flicts, as direct competitors are likely to have conflicting interests. When partnerfirms compete principally in the same industry, one partner’s gain is often at theexpense of the other. Even though the partners may find mutual interests in thealliance, potential conflicts may arise very easily, such as when there are geographicoverlaps between the partners. Also, joint ventures formed by direct competitorsare more likely to dissolve. In Table III we summarize the proposed relationships– that is, the direction of impact on alliance conditions when the partner firmcharacteristics change.

Competitive positions. Eisenhardt and Schoonhoven (1996) find that a vulnerablestrategic position leads to more alliance formation. We argued that, everything elsebeing equal, weak companies need partners more than strong companies do. Thus,improving competitive positions will lead to a lower degree of interdependenciesamong partners. In contrast, individual partner firms with improving competitivepositions will tend to achieve higher collective strengths. We do not expect anydirect relationship between competitive positions and interpartner conflicts. Bothstrong and weak partner firms may have conflicting interests or incompatibleresources and preferences.

733


Table III. Partner firm characteristics and alliance conditions

Partner firm Effects on alliance conditionscharacteristics

Collective strengths Interpartner conflicts Interdependencies

Market commonality Increases Increases No effect(increasing)

Competitive positions Increases No effect Decreases(improving)

Diverse resource profiles No effect Increases Increases(accentuating)

Reputation Increases Decreases No effect(increasing)

Diverse resource profiles. Resource profiles of partner firms (and their potential fit)have received much attention in the literature (Medcof, 1997). Generally speak-ing, partner firms may have either similar or dissimilar resource profiles. Thisdimension of resource diversity determines the type of resource fit in the alliance– either complementary or supplementary. Most researchers seem to believe thata diverse resource profile is better because partners may contribute differentresources to an alliance. This argument seems to be related only to inter-dependencies – that is, heterogeneous resource profiles enhance the need for each other. Similar resource profiles are more likely to create unidirectional dependence.

However, scholars have also argued that whether or not partners have diverseresource profiles is not important – the key point is the aggregate of the resources.In that sense, a supplementary resource alignment can be equally valuable inbeefing up the collective strengths (Das and Teng, 2000b). Value can be createdby bringing in similar resources to reach a critical competitive level. Thus, therewill be no relationship between the type of resource profiles and the collectivestrengths of an alliance. Additionally, diverse resource profiles will have a directimpact on interpartner conflicts. As we noted earlier, one source of interpartnerconflicts is having different resources contributed by partners that cannot work welltogether. Examples include incompatible technologies and different organizationalroutines. Thus, diverse resource profiles may invite more interpartner conflicts.

Reputation. A firm’s reputation for trustworthiness is considered as a strategic asset(Barney and Hansen, 1994). Because opportunism is a major concern in alliances,a firm’s reputation helps in enhancing its partner firm’s confidence in partnercooperation (Das and Teng, 1998). Reputation for trustworthiness may be theresult of either direct interactions in the past, common partners in other relations,or the general image in the marketplace. Reputation may enhance the collectivestrengths because partners will be more willing to contribute sensitive resources.Zaheer et al. (1998) find that interfirm trust reduces negotiation costs, which addto collective strengths. By the same token, improving reputation may also reduceinterpartner conflicts. Trusting partners are more likely to exercise mutual for-bearance and cooperate in good faith. We expect no relationship between repu-tation and interdependencies, because trust itself does not create the need for eachother. Dependence is based on resource needs.

Referring to our earlier discussion of alliance process models and Table I, onestream of alliance research focuses on the alliance developmental stages. Amongthe various stages suggested in the literature, three common stages can be dis-cerned – formation, operation, and outcome stages. In Table II we have organizedthe seven alliance process models under these three stages. It is important to notethat all models contain: (1) a formation stage (in which an alliance strategy is formulated, partners identified, deals negotiated, and the alliance set up); (2) anoperation stage (in which partners start to operate the alliance and implement the agreement); and (3) an outcome stage (in which results are obtained and evaluated, and the alliance either stabilizes or continues to change and reform).

734 . . .


Although the three stages have distinct characteristics, they also have overlaps – aswith any life-stages models. For example, an alliance may start to operate whenformal agreements are in the process of being developed. Despite the overlaps,however, the basic idea is that alliances, like typical organizations, go through dis-cernible stages during their operational lives.

We argue that the progress within the three alliance stages is significantly influ-enced by alliance conditions (see arrows B, E, and F in Figure 1). Researchers notethat initial alliance conditions and revised conditions critically affect the wayalliances proceed, and the same set of condition variables (while different fromours) can be used to describe the developmental process (Doz, 1996). Using thealliance condition variables we proposed earlier – collective strengths, interpart-ner conflicts, and interdependencies – we now examine the role of these variablesin the three developmental stages.

Formation StageIn the formation stage, partner firms approach each other and negotiate thealliance. Partner firms then carry out the agreement and set up the alliance bycommitting various types of resources. The alliance is initiated and put into operation. Alliances will be formed only under certain conditions (designated by arrow A in Figure 1). These conditions include a relatively high level ofcollective strengths, a low level of interpartner conflicts, and a high level ofinterdependencies.

First, a high level of interdependencies is needed for alliance formation becauseit provides the requisite rationale (Oliver, 1990). Given the managerial complexi-ties of alliances, most firms would choose to stay away from alliances if they arenot required to be truly interdependent for a given project. The level of interde-pendence will not change significantly in the formation stage, because the allianceis just beginning to take shape. Second, alliances tend to be formed with a rela-tively high level of collective strengths in relation to the intended strategic objec-tives. Clearly, the partners will need to be confident that the performance risk ofthe alliance is relatively low (Das and Teng, 1996, 2001a). The collective strengthsare likely to go up slowly in the formation stage as the partners continue to bringin valuable resources. Third, alliance formation takes place when current andexpected interpartner conflicts are perceived to be low. Partner firms need assur-ance that serious opportunistic behaviour is unlikely, tantamount to a low level ofperceived relational risk (Das and Teng, 1996, 2001a). However, during the for-mation process it is quite possible that interpartner conflicts will go up graduallyas interfirm diversity begins to affect smooth cooperation. Also, hidden agendasmay be revealed during this stage, which will further heighten interpartner conflicts.

Operation StageNot only is the formation stage directly influenced by alliance conditions, the tran-sition from the formation stage to the operation stage is also dictated by the samealliance condition variables (see arrow E in Figure 1). During the operation stage,partner firms collaborate and implement all agreements of the alliance. Thealliance will likely grow rapidly in size during this stage, somewhat akin to thegrowth stage of organizational life cycles. Other than the growth route, an alliancemay also be reformed and/or terminated at this stage.

735


We may call this transitional period early in the operation stage as ‘crossroads’,borrowing the term from D’Aunno and Zuckman (1987). During the crossroadsperiod, the three alliance conditions may fluctuate significantly and thus lead the alliance to a quick termination. Or the alliance may undergo a reformationwhich may bring the alliance back on track. For example, interdependencies maysuddenly go down during the operation stage. Researchers note that interdepen-dencies can quickly change as a result of learning in alliances (Inkpen andBeamish, 1997). A direct result is a change in the bargaining power between the partners, which may lead to a renegotiation of the original deal. Other typesof resource acquisition – for example, for the purpose of name recognition and market entry – if rapidly accomplished, may also lead to diminishing interdependencies. If so, chances are the alliance will not proceed along anextended operation stage – it will either need to be reformed or will head towardtermination.

Similarly, the collective strengths of the alliance may take a downturn at theend of the operation stage. The reasons include, importantly, an exhaustion ofresources and commitments. It is also possible that the initial match between thepartner firms is no longer sustainable. The result, again, is a possible reformationor termination. Besides, an alliance may be destabilized during the initial cross-roads period should significant interpartner conflicts arise. Opportunistic behav-iour of firms is likely to grow and its impact begin to be felt. For an alliance toproceed efficiently in the operation stage, initial disorder and conflicts of interestcreated by working with partner firms need to be severely curbed. If interpartnerconflicts get out of control, the alliance will be on the way towards reformationor termination. It is in this sense that we suggest that alliance conditions have adirect impact on the operation stage of alliances.

If an alliance proceeds normally to growth in the operation stage, alliance con-ditions will evolve in a predictable fashion. First, interdependencies will tend to godown gradually. A continued appropriation of each other’s resources will steadilyerode the need for each other. However, an expeditious transfer of valuableresources is unlikely at this stage if it did not happen earlier during the initial cross-roads period.

Second, collective strengths may continue to go up at this stage, although thepace is likely to slow down. Not only will the alliance be growing in size, its col-lective strengths will also increase as the partner firms find the best ways to joinforces. Nakamura et al. (1996) note that partner firms may choose either conver-gent operation (based on learning each other’s knowhow) or divergent operation(which results in more specialization in the alliance). Either approach may producesignificant absolute value.

Third, we expect the level of interpartner conflicts to go down during the operation stage. Initial problems and incompatibilities created by alliance diver-sity are likely to be eased through interfirm adaptation. Partner firms will try towork out ways to deal with opportunistic behaviour (Das and Rahman, 2001).Conflict resolution techniques will also be developed in this stage. All types of man-agement control in alliances – for example, output, behaviour, and social control– should also help in coping with interpartner conflicts (Das and Teng, 2001b).The alliance will thus proceed towards the next crossroads period while enteringthe outcome stage.

736 . . .


Outcome StageDuring the outcome stage, alliance performance becomes tangible and can, thus,be evaluated with some certainty. There are four possible outcomes for an allianceat this stage – stabilization, reformation, decline, and termination. Of course, acombination of outcomes is also possible, such as a termination after reformation.It needs to be noted that alliance reformation and alliance termination do not nec-essarily signal alliance failure. Reformation and termination may be the best optionunder certain circumstances, such as the achievement of pre-set alliance objec-tives. Alliance condition variables continue to play a decisive role in the outcomestage (see arrow F in Figure 1). The particular alliance outcome will depend onthe conditions of the alliance.

The transitional period early in the outcome stage – in the nature of crossroads– will presage the likely outcome of an alliance. Just as with the first crossroadsperiod at the beginning of the operation stage, an alliance will run into trouble ifits collective strengths and interdependencies start to go down significantly andinterpartner conflicts multiply. Reformation or termination will, then, be likely outcomes.

A more gradual deterioration in alliance conditions will lead to alliance decline.Researchers have paid considerable attention to organizational decline (Weitzeland Jonsson, 1989), which can be attributed to a shrinkage in the resource baseor a diminishing ability to adapt to the environment. In a similar manner, strate-gic alliances may register a decline in their performance, resource base, and adap-tive ability, and thus slide towards dissolution. We suggest that alliance decline ischaracterized by: (1) a decrease in collective strengths (which diminishes theresource base); (2) an increase in interpartner conflicts (which diminishes eachother’s adaptive ability); and (3) a decrease in interdependencies (which diminishescommitment).

In the outcome stage, alliances may also stabilize and become mature. Thatmeans the alliance achieves a fit with its environment and successfully adapts tothe environment on a continuous basis. In such a case, the three alliance condi-tion variables will also show a stabilized pattern. The level of interdependencieswill go down slowly, especially if a convergent operation is pursued. Collectivestrengths may continue to climb as the alliance grows and managers gain experi-ence. Interpartner conflicts will move downward as conflict resolution techniquesand control mechanisms are perfected.

In sum, while an alliance proceeds from the formation stage to the operationstage to the outcome stage, the alliance conditions substantively influence the unfolding of the overall developmental process (arrows B, E, and F in Figure 1).

So far we have discussed how alliance conditions affect the alliance develop-mental process. Because alliance conditions are the result of the firm characteris-tics that we discussed earlier, it is plain that these alliance conditions will shiftwhenever there are changes in the firm characteristics. In addition, we suggest thatalliance evolution will, in turn, also affect firm characteristics (arrows G, H, and Iin Figure 1). More importantly, we propose that an alliance and its constituentpartner firms interactively co-evolve – and this co-evolutionary system can beexplored in terms of the firm characteristics and alliance conditions. In the nextsection we discuss these co-evolutionary processes.

737


-

Alliance co-evolution is of research interest because, after all, strategic alliancesuniquely represent a system consisting of multiple elements, i.e., the partners andthe alliance per se. This multifaceted nature of alliances suggests that these ele-ments will evolve separately as well as interactively. Although some scholars havestudied the co-evolution of organizations and their environment (e.g., Levinthaland Myatt, 1994), the alliance literature has not paid much attention to allianceco-evolution. The few papers that discuss the notion of co-evolution in alliancesdo so only in relation to their environment (Ariño and de la Torre, 1998; Kozaand Lewin, 1998). The literature has been unclear about the elements of analliance co-evolutionary system. Here we propose the different elements of a co-evolutionary system as applicable to strategic alliances.

Co-evolution has its foundation in evolution. By definition, co-evolution takesplace when different parts of a system evolve simultaneously and interact with eachother so that one partner’s evolution is affected by another partner’s evolution.Because an alliance co-evolves with its constituent partner firms, the evolution ofeach entity influences the other’s evolution, and vice versa.

Partner Firm Evolution Affecting Alliance EvolutionMarket commonality. Partner firm evolution, as described by the four firm charac-teristics, will greatly influence alliance evolution. If market commonality betweenpartner firms goes up, collective strengths and interpartner conflicts will also goup (see Table III). The likely result of having direct competitors with high opera-tional overlap as partners is that the alliance will experience more instability.Although higher collective strengths mean more resources to proceed fast, higherinterpartner conflicts based on partner self-interest suggest that collaboration willnot be smooth. The alliance between Liz Claiborne and Avon, for example,encountered trouble when Avon acquired an upscale cosmetics company in aneffort to enhance its image (Stafford, 1994). Because the acquisition increased themarket commonality of the two partners, Liz Claiborne began to view Avon asmore of a competitor than a partner. Because of this increased conflict, the alliancewas soon dissolved through the acquisition of Avon by Liz Claiborne.

Competitive positions. When partner firms achieve better competitive positions in themarket, they will have higher collective strengths but lower interdependencies.High collective strengths suggest that the alliance will be able to proceed fairly successfully. According to Eisenhardt and Schoonhoven (1996), strong strategicpositions diminish the need for alliances. Because of low interdependencies amongthe partners, the alliance is likely to be dissolved rather quickly.

Diverse resource profiles. Partner firms may develop more diverse resource profilesduring the tenure of the alliance, which may or may not be the result of a conver-gent resource operation within the alliance. In that case, partner firms will havehigher interpartner conflicts and higher interdependencies. On the one hand,diverse resource profiles will encourage the partners to acquire each other’s valu-able resources. Interpartner conflicts due to opportunistic learning will delay theprogress of the alliance. On the other hand, because partner firms may becomemore interdependent, they will be more likely to be deeply embedded in the alliance.

738 . . .


Reputation. Finally, partner firms’ reputation for trustworthiness also change overtime. On the one hand, interactions in the alliance may increase perceived trustworthiness. On the other hand, a firm’s reputation may change when inde-pendent events happen outside the alliance. Higher trustworthiness results inhigher collective strengths and lower interpartner conflicts (Zaheer et al., 1998).Accordingly, the alliance will progress faster. In addition, alliance stability will beenhanced.

Alliance Evolution Affecting Partner Firm EvolutionFormation stage. The results of alliance progress and evolution directly affectpartner firms’ situation and characteristics. For example, Das et al. (1998) find thatannouncements of strategic alliances cause firm valuations to fluctuate in the stockmarket. During the formation stage, it is most likely that partner firms’ marketcommonality and reputation will change as a result of alliance evolution. Theother characteristics will tend to be more affected later in the process. For example,firms’ competitive positions and resource profiles will not change quickly duringalliance formation.

Alliance formation affects partner firms’ market commonality almost immedi-ately. Sometimes a partner firm does not originally operate in the industry of thealliance (such as when a bank forms an alliance in the insurance business). Theformation of the alliance changes the situation because the firm then has a pres-ence in that industry. If both partner firms operate in that industry, alliance for-mation also changes their relative market share in the industry and the importanceof that industry to them. The result is inevitably a higher level of market com-monality. High market commonality leads to greater collective strengths and inter-partner conflicts (as we discussed earlier), which then impact on the allianceevolution process.

The reputation of partner firms is first tested during the formation stage. AsRing and Van de Ven (1994) suggest, when partners negotiate and actually committo an alliance (alliance formation), they rely much on informal sense making andpsychological contract. These mechanisms emphasize that alliance making is arelational contracting process and that this process depends on a certain level ofinterfirm trust and even interpersonal trust among managers (Borch, 1994;Dodgson, 1993), The formation stage is critical in assessing the trustworthiness ofpartners because partners begin to interact and familiarize themselves with eachother. Trust may easily break down if one or more partner firms are found tobehave opportunistically. It is also possible that initial interactions strengthen inter-firm and interpersonal trust. The result is a heightened perception of each other’strustworthiness. Furthermore, since an alliance will tend to have its own reputa-tion, alliance formation is likely to transfer such alliance reputation to the reputa-tion of its partners.

Operation stage. As compared to the formation stage, the operation stage will affectfirm characteristics more widely. Except for competitive positions, all the othercharacteristics are likely to change in this stage. Partner firms’ competitive posi-tions will remain unchanged because the alliance is yet to generate results in theoperation stage. In contrast, market commonality between the partner firms willcontinue to rise in this stage because the alliance is likely to grow in size and marketshare. In addition, the operating results may continue to help partners in assess-

739


ing and reassessing each other’s trustworthiness. Alliance managers rely on bothrole interactions and personal interactions to run the alliance. The partner firmswill realize whether the other partner is interested in exploiting the relationship orinvesting in the relationship. Thus, a partner firm’s perceived trustworthiness willevolve during the operation stage.

The resource profiles of the partner firms will begin to change as a result ofalliance activities. Alliance operation will help partner firms in developingresources that they did not already own – contributing to ‘a feedback effect onparent firms’ in terms of resource similarity (Nakamura et al., 1996, p. 521). Also,during alliance operation, resources may develop convergently or divergently. Aconvergent operation emphasizes symmetrical interfirm learning and the partnerfirms will acquire some knowledge and know-how from each other. The result isa higher level of resource overlap and a lower level of resource diversity. Con-trariwise, a divergent resource development indicates further specialization in one’sown area of strength. Learning is not important in this mode of development.Resource diversity will remain high or go even higher.

Also, strategic objectives of partner firms are likely to change in the operationstage. Oftentimes, partner firms enter alliances with a learning orientation – thatis, with an intention to appropriate the other’s tacit knowledge and know-how.Although learning takes time and may be accomplished during the outcome stage,it begins to take place during the operation stage. When this objective is largelyaccomplished, partner firms may demand a renegotiation of the deal. In such asituation, they will tend to have quite different objectives in the alliance – such asusing the alliance as a cash cow or supporting their core businesses.

Outcome stage. One key feature of the outcome stage is that it is tied with perfor-mance evaluation. Partner firms may use a benefit/cost framework or they maymeasure realized performance outcome with their expected outcome and judgewhether the discrepancy is too great. A negative discrepancy will lead the part-ners to reevaluate the alliance and adjust their approaches. It may also change thestrategic objectives of the partner firms in the alliance. When outcomes matchexpectations, partners become more committed to the alliance. However, a suc-cessful accomplishment of their mission may also change partners’ strategic objec-tives in the alliance.

The competitive positions of partner firms will eventually be affected by allianceevolution at the outcome stage as well. They may not change before the outcomestage because the competitive positions of firms change only over the long haul.The partner firms may achieve stronger competitive positions via the alliance for avariety of reasons. They may acquire valuable resources from the alliance that canbe used in the parent firm. Or they may enter a critical market through the alliance.Or, again, they may gain legitimacy from the prominence of a partner firm.

During the outcome stage, the resource profiles of partners will continue to evolveas the alliance evolves. As we discussed earlier, the resources that are acquired ordeveloped through alliance operation serve to gradually alter each partner’sresource profile. Besides, we believe that the other two variables – market com-monality and firms’ reputation – will not be greatly affected by alliance evolutionat the outcome stage. The changes in the market commonality of the partner firmswill have already been adjusted for prior to the outcome stage. Similar adjustmentswill have taken place regarding interfirm trust among the partners.

740 . . .


One of the key issues in understanding the developmental processes of strategicalliances is how the alliance conditions change over the different stages of devel-opment. A related question is the nature of the co-evolutionary dynamics ofalliances in terms of their constituent partner firms.

In this article we proposed a process model of alliance development that is basedon the ideas of alliance conditions and an alliance system comprising co-evolutionary elements. We suggested that alliance conditions differentially impactthe alliance developmental processes across three commonly accepted stages –namely, formation, operation, and outcome stages. We defined alliance conditionsas consisting of collective strengths, interpartner conflicts, and interdependencies.Alliance conditions, we noted, are impacted by the alliance environment, com-prising specific partner firm characteristics. Alliance conditions also cause certainchanges in the partner firms of the alliance, and these partner firm changes, inturn, affect the developmental processes. We further examined the co-evolution ofthe alliance and its constituent partners along the developmental stages in relationto the complex role of the alliance conditions.

We first discussed, in some detail, the construct of alliance conditions, identify-ing both its antecedents and its constituent factors. We suggested three alliancecondition variables that adequately capture the character of an alliance at anygiven moment – namely, collective strengths, interpartner conflicts, and interde-pendencies. These conditions are determined by the alliance environment, whichcomprises the characteristics of the partner firms. Thus, changes in the allianceenvironment (with or without the impact of the alliance) alter alliance conditions.

Second, we suggested that alliance conditions serve as a link between the allianceenvironment and the alliance developmental process. We contended that the threealliance condition variables, in specific combinations, constitute the prerequistiesfor alliances to be formed, operated, reformed, and terminated.

Third, we argued for a new approach to understanding the alliance develop-mental process and discussed at some length how the three developmental stagesare differentially impacted by the three alliance condition variables. We suggestedthat different kinds of alliance outcome – for example, progress, reformation,decline, and termination – can be postulated by examining the changing patternsof alliance conditions.

Fourth, we proposed a co-evolutionary model of the alliance process. So far aswe know, no existing framework has clearly delineated such a co-evolutionaryprocess. We focused our attention on the co-evolutionary interactions between thealliance and its constituent partner firms, exploring, in particular, the changes inthe alliance conditions and partner firm characteristics in the three developmen-tal stages. We believe our examination of alliance co-evolutionary dynamics helpsin better understanding the complexities of alliance developmental processes.

Finally, from an overarching perspective, we integrated the three alliance processapproaches found in the literature – namely, that of alliance developmental stages,alliance conditions, and alliance co-evolution – and also, thereby, addressed thespecific limitations of the individual approaches.

In regard to possible empirical research on alliance development and allianceco-evolution reflected in our model, we have provided the basis for deriving thenecessary test propositions – these are implicit in the contents of the cells in Table

741


III. We believe that a listing of explicit statements of all these propositions – aconsiderable number in total – would needlessly clutter the article.

The managerial implications of our model of alliance development are valu-able. By understanding and thinking critically about the import of Table III, amanager of a strategic alliance should be in a position to determine the specificactions needed for effective performance. Depending on how the manager assessesthe alliance conditions, and given the developmental stage under consideration,the model suggests clear prescriptions for handling various situations arising inalliances. An added benefit is that the courses of action indicated on this basis isbuttressed by a comprehensive understanding of the interactive dynamics ofalliance conditions and partner firm characteristics and activities. Such concep-tual insights should afford significant advantage to managers while making choicesabout effective strategies in alliances.

For example, we may use the framework to analyse the development process ofthe alliance between Northwest Airlines and KLM Royal Dutch Airlines (Tully,1996). In 1992, Northwest was in deep trouble and almost went bankrupt. KLMcame to its rescue by acquiring 25 per cent of Northwest. The equity-basedalliance allowed the two airlines to link their hubs in Detroit and Amsterdam andoffer transatlantic travelling under one brandname through code-sharing. In thiscase, Northwest’s weak financial position and KLM’s weak competitive position inthe USA (a firm characteristic) led to a high degree of interdependencies (analliance condition). Besides, since the two had low market commonality, there wasa low level of interfirm conflicts (another alliance condition). As a result, thealliance was formed and quickly entered the operation stage. The initial perfor-mance of the alliance was very impressive: the combined transatlantic marketshare jumped from 7 to 11 per cent in two years. Clearly, the alliance experiencedrapid growth and proceeded successfully from the operation stage to the outcomestage, under favourable alliance conditions.

During the initial period, Northwest’s financial situation improved remarkablyand the firm became profitable again. In terms of firm characteristics, a weakcompetitive position became a strong one, and the level of interdependencies wentdown. Meanwhile, KLM profited much from its initial investment and went on toexert even more control over Northwest. The attempt created interfirm conflictsin the alliance. Since two out of three alliance conditions were deteriorating, thealliance ran into trouble and faced a possible reformation in the outcome stage.As this case suggests, the insights from our framework include a recognition thatthe levels of interdependencies and interpartner conflicts in the alliance willchange when partners’ situation and objectives evolve over time. Prior agreementson possible ways to modify and terminate the alliance may help contain the uncer-tainties engendered by changing alliance conditions.

As another example, we may apply the framework to examine the high-profilealliance between U S West (a major local telephone company headquartered inDenver, Colorado) and Time Warner (Cauley, 1996). In 1993, U S West invested$2.55 billion for a 25.5 per cent share in a joint venture with Time Warner. Thejoint venture – Time Warner Entertainment – comprised most of Time Warner’scable systems, the HBO channel, and Warner Brothers Studios. At the beginningof the partnership (formation stage), the two firms had low market commonality(telephones and entertainment) and diverse resource profiles (U S West’s financialresources vs. Time Warner’s physical resources and reputation). Thus, our frame-

742 . . .


work would suggest a low level of interpartner conflicts and a high level of inter-dependencies in their joint venture. A couple of years later (operation stage), therelationship started to show signs of strain. U S West vetoed several deals proposedby Time Warner Entertainment to form alliances with telecom firms such asAT&T, apprehensive that such alliances would eventually compete against U SWest’s own local telephone business. Furthermore, when Time Warner proceededto acquire Turner Broadcasting System in 1996, U S West took its partner to court,arguing that the acquired Turner assets would effectively compete against those ofthe joint venture (Time Warner Entertainment). The court eventually dismissedthe case and the two firms were on the verge of a divorce (McCarthy, 1996).In the meantime, U S West completed an acquisition of Continental Cablevision,further reducing its reliance on the joint venture.

Clearly, the relationship went sour as the two firms were heading for greatermarket commonality (in telephone and cable business) and more similar resourceprofiles (through acquisitions). The alliance conditions deteriorated quickly, asreflected in a high level of conflicts and a low level of interdependencies. The twofirms began negotiations for ending the alliance. One plan was to give back toTime Warner the HBO channel and Warner Brothers, while granting U S Westa majority ownership of the cable business. However, the two parties could notagree on the financial terms. Meanwhile, there was a stock market boom and thevalue of the cable business went up substantially. To some extent the good fortunealleviated the conflicts. In July 1997 the two firms announced that they were basi-cally satisfied with the condition of the joint venture and would continue with theexisting relationship (Fabrikant, 1997). Thus, we may say that at this point of theoutcome stage the alliance stabilized.

There are several limitations in our proposal that should be addressed in futureresearch. First, the key construct of alliance conditions needs to be examinedfurther in terms of other relevant factors beyond the three that we have discussedhere. For instance, the optimal degrees of competition and cooperation betweenpartner firms may be explored in the different developmental stages. The domi-nance of competition over cooperation, or vice versa, could well be detrimentalto continued alliance stability in different stages (Das and Teng, 2000a). Second,we examined the alliance environment only in terms of partner firm characteris-tics. The industry and general environments have been left out in order to keepour analysis within manageable limits. Clearly, future research should include otherimportant alliance environment factors, such as industry characteristics and theinstitutional environment, and also attend to a more extensive list of firm charac-teristics. And finally, our discussion of the alliance co-evolutionary system has notexplicitly taken the temporal dimension into account. Although time is an implieddimension in our model, its fundamental role in co-evolution has not been fullyexamined. For example, future research should focus on the differing planninghorizons of partner firms and explore how these may affect the co-evolutionarydynamics of alliances and the requisite alliance conditions for effectiveness in thedifferent developmental stages.

A, A. and D L T, J. (1998). ‘Learning from failure: towards an evolutionarymodel of collaborative ventures’. Organization Science, 9, 306–25.

743


B, J. and H, M. H. (1994). ‘Trustworthiness as a source of competitive advan-tage’. Strategic Management Journal, 15, Winter Special Issue, 175–216.

B, O. J. (1994). ‘The process of relational contracting: developing trust-based strate-gic alliances among small business enterprises’. Advances in Strategic Management, 10B,113–35.

B, K. D., B, L. E. and H, P. C. (1997). ‘The five stages of the co-operative venture strategy process’. Journal of General Management, 23, 1, 39–52.

C, L. (1996). ‘Time Warner, U S West go to court this week in bitter partnershipfeud’. Wall Street Journal, 12 March, B7.

C, M.-J. (1996). ‘Competitor analysis and interfirm rivalry: toward a theoretical inte-gration’. Academy of Management Review, 21, 100–34.

D, T. K. and R, N. (2001). ‘Partner misbehavior in strategic alliances: guidelinesfor effective deterrence’. Journal of General Management, 27, 1, 43–70.

D, T. K. and T, B. (1996). ‘Risk types and inter-firm alliance structures’. Journal ofManagement Studies, 33, 827–43.

D, T. K. and T, B. (1997). ‘Sustaining strategic alliances: options and guidelines’.Journal of General Management, 22, 4, 49–64.

D, T. K. and T, B. (1998). ‘Between trust and control: developing confidence inpartner cooperation in alliances’. Academy of Management Review, 23, 491–512.

D, T. K. and T, B. (2000a). ‘Instabilities of strategic alliances: an internal tensionsperspective’. Organization Science, 11, 77–101.

D, T. K. and T, B. (2000b). ‘A resource-based theory of strategic alliances’. Journalof Management, 26, 31–61.

D, T. K. and T, B. (2001a). ‘A risk perception model of alliance structuring’. Journalof International Management, 7, 1–29.

D, T. K. and T, B. (2001b). ‘Trust, control, and risk in strategic alliances: an inte-grated framework’. Organization Studies, 22, 253–85.

D, S., S, P. K. and S, S. (1998). ‘Impact of strategic alliances on firm valua-tion’. Academy of Management Journal, 41, 27–41.

D’A, T. A. and Z, H. S. (1987). ‘A life-cycle model of organizational federations: the case of hospitals’. Academy of Management Review, 12, 534–45.

D, M. J. (1993). ‘Learning, trust, and technological collaboration’. Human Relations,46, 77–95.

D, Y. L. (1996). ‘The evolution of cooperation in strategic alliances: initial conditionsor learning processes?’. Strategic Management Journal, 17, Summer Special Issue, 55–83.

E, K. M. and S, C. B. (1996). ‘Resource-based view of strategicalliance formation: strategic and social effects of entrepreneurial firms’. OrganizationScience, 7, 136–50.

F, G. (1997). ‘Time Warner to remain in venture with U S West’. New York Times,17 July, D6.

G, L. E. (1972). ‘Evolution and revolution as organizations grow’. Harvard BusinessReview, 50, 4, 37–46.

G, R. (1995). ‘Does familiarity breed trust? The implication of repeated ties for con-tractual choice in alliances’. Academy of Management Journal, 38, 85–112.

G, R. (1998). ‘Alliances and networks’. Strategic Management Journal, 19, 293–317.H, M. T. and F, J. (1977). ‘The population ecology of organizations’.

American Journal of Sociology, 82, 929–64.H, J. R. and P, P. J (1998). Smart Alliances: A Practical Guide to Repeatable Success.

San Francisco, CA: Jossey-Bass.H, C. and P, N. (1998). ‘Strategies of engagement: lessons from the critical

examination of collaboration and conflict in an interorganizational domain’. Organiza-tion Science, 9, 217–30.

744 . . .


I, A. C. and B, P. W. (1997). ‘Knowledge, bargaining power, and the instability of international joint ventures’. Academy of Management Review, 22, 177–202.

J, J. C. (1988). ‘On strategic networks’. Strategic Management Journal, 9, 31–41.J, C., H, W. S. and B, S. P. (1997). ‘A general theory of network

governance: exchange conditions and social mechanisms’. Academy of Management Review,22, 911–45.

K, R. M. (1994). ‘Collaborative advantage: the art of alliances’. Harvard BusinessReview, 72, 4, 96–108.

K, B. (1988). ‘Joint ventures: theoretical and empirical perspectives’. Strategic Manage-ment Journal, 9, 319–32.

K, B. (1989). ‘The stability of joint ventures: reciprocity and competitive rivalry’.Journal of Industrial Economics, 38, 2, 183–98.

K, M. P. and L, A. Y. (1998). ‘The co-evolution of strategic alliances’. Organiza-tion Science, 9, 255–64.

K, R. and N, K. O. (1998). ‘Differential learning and interaction in alliance dynam-ics: a process and outcome discrepancy model’. Organization Science, 9, 356–67.

L, A. (1992). ‘Network dyads in entrepreneurial settings: a study of the governanceof exchange relationships’. Administrative Science Quarterly, 37, 76–104.

L, S. and W, P. E. (1961). ‘Exchange as a conceptual framework for the study ofinterorganizational relations’. Administrative Science Quarterly, 5, 583–601.

L, D. and M, J. (1994). ‘Co-evolution of capabilities and industry: the evo-lution of mutual fund processing’. Strategic Management Journal, 5, 45–62.

MC, S. (1996). ‘U S West loses Time Warner suit’. Telephony, 230, 24, 3.MK, B. (1982). Organizational Systematics: Taxonomy, Evolution, Classification. Berkeley,

CA: University of California Press.M, J. W. (1997). ‘Why too many alliances end in divorce’. Long Range Planning, 30, 5,

718–32.N, M., S, J. M. and Y, B. (1996). ‘An empirical investigation of joint

venture dynamics: evidence from U.S.-Japan joint ventures’. International Journal of Indus-trial Organization, 14, 521–41.

N, M. (1991). ‘The evolution of strategic alliances: opportunities for man-agerial influence’. Journal of Business Venturing, 6, 237–57.

O, P. (1997). ‘The effect of partner differences on the performance of R&D consortia’.In Beamish, P. W. and Killing, J. P. (Eds), Cooperative Strategies: Vol. 1. North American Per-spectives. San Francisco, CA: New Lexington Press, 133–59.

O, C. (1990). ‘Determinants of interorganizational relationships: integration andfuture directions’. Academy of Management Review, 15, 241–65.

P, W. W. (1987). ‘Hybrid organizational arrangements: new form or transitionaldevelopment?’. California Management Review, 30, 67–87.

R, P. S. and V V, A. H. (1994). ‘Developmental processes of cooperative inter-organizational relationships’. Academy of Management Review, 19, 90–118.

S, R. E., I, L. A., MA T. C. and F, T. III (1996). ‘Creatingstrategic alliances which endure’. Long Range Planning, 29, 3, 346–57.

S, E. R. (1994). ‘Using co-operative strategies to make alliances work’. Long RangePlanning, 27, 3, 64–74.

S, H. K. and C, K. G. (2000). ‘On the performance of technology-sourcing partnerships: the interaction between partner independence and technologyattributes’. Academy of Management Journal, 43, 1045–67.

T, H. B. (1986). ‘Networks: between markets and hierarchies’. Strategic ManagementJournal, 7, 37–51.

T, S. (1996). ‘Northwest and KLM: the alliance from hell’. Fortune, 133, 12, 24 June,64–8, 70, 72.

745


V V, A. H. (1992). ‘Suggestions for studying strategy process: a research note’.Strategic Management Journal, 13, Summer Special Issue, 169–88.

W, W. and J, E. (1989). ‘Decline in organizations: a literature integration andextension’. Administrative Science Quarterly, 34, 91–109.

Z, A., ME, B. and P, V. (1998). ‘Does trust matter? Exploring the effectsof interorganizational and interpersonal trust on performance’. Organization Science, 9,141–59.

746 . . .


faculty.baruch.cuny.edufaculty.baruch.cuny.edu/tkdas/publications/das-teng_jms02...baruch college,...

Documents