Rethinking FS-ISAC: An IT Security Information Sharing Network Model for the Financial Services Sector

This study examines a critical incentive alignment issue facing FS-ISAC (the information sharing alliance in the financial services industry). Failure to encourage members to share their IT security-related information has seriously undermined the founding rationale of FS-ISAC. Our analysis shows that many information sharing alliances’ membership policies are plagued with the incentive misalignment issue and may result in a “free-riding” or “no information sharing” equilibrium. To address this issue, we propose a new information sharing membership policy that incorporates an insurance option and show that the proposed policy can align members’ incentives and lead to a socially optimal outcome. Moreover, when a transfer payment mechanism is implemented, all member firms will be better off joining the insurance network. These results are demonstrated in a simulation in which IT security breach losses are compared both with and without participating in the proposed information sharing insurance plan

Coalitions in the airline industry: an empirical approach

This paper conducts an empirical analysis of the determinants of airline alliances. Well established airlines with large passengers' volumes are more likely to participate in an alliance and are also essential for alliance survivability. In line with this finding, older air-lines have a higher probability of being part of an alliance. Airlines operating with high load factors consider alliance participation as a significant alternative to fleet capacity expansion. As their market share grows, alliances become more appealing to airlines. Competitors' decision to enter an alliance tends to have a positive impact on alliance participation. The relatively similar magnitude and effect of the regressors' coefficients across different alliance choices, suggests that the airline's major decision is not to choose a specific alliance, but rather considering whether to enter into an alliance, as a possible strategy within its business model.Discrete choice model, Oneworld, Sky Team, Star Alliance.

Global strategic alliances in scheduled air transport - implications for competition policy

In international aviation, global strategic alliances (GSAs) have in recent years become an important form of cooperation between airlines. This cooperation has hit the antitrust nerve of the European Commission. Initially, the Commission had attempted to constrain both the market share of the major alliances in transatlantic air transport and their access to major European hubs (London and Frankfurt). The airlines maintain that they need alliances as an inevitable means to adapt to the changing environment in increasingly liberalized and globalized air transport markets in order to remain competitive and to fully realize their growth potential. The final verdict by the Commission will be published soon. Though the existing airline alliances are not stable enough to threaten competition and the openness of airline markets on a global scale, certain hubs or even city pairs might be in danger of being dominated by an individual alliance. This is all the more so as alliances in aviation — contrary to, e.g., strategic R&D alliances in manufacturing — are based on cooperating in a core area of the participants' commercial activities, which might end in collusion. On the other hand, alliances may indeed be regarded as an appropriate tool for internationally active firms to remain competitive. For analyzing alliances' impact on competition, networks seem to be more appropriate than city pairs. On the networks level, complementary alliances usually improve overall welfare via lower fares in all submarkets, whereas parallel alliances tend to result in higher prices in the former parallel markets and lower in other markets due to network spillover effects. Since GSAs in aviation are both of a complementary and a parallel nature, no clear-cut a priori position for or against alliances can be maintained based on conventional antitrust reasoning. From the new institutional economics perspective, alliances are ambiguous as well, because this perspective highlights the efficiency objectives of the participating carriers as well as the potential for collusion and opportunistic behavior. Empirical evidence on the market shares and pricing behavior of alliances and their members does not as yet reflect an increasing threat to competition by these forms of cooperation. But it should be noted that alliances appear to be gaining greater stability over time and that the number of independent competitors is shrinking. These independent competitors contribute much to the dynamics of the competitive process. If their vital role for competition were to be restricted, GSAs in airtransport might prove to be detrimental in the long run. The European Commission is right to be on the alert about GSAs having potentially detrimental effects on competition. However, the Commission should avoid overreacting in its zeal to keep markets open (contestable). It should be borne in mind that market access on transatlantic as well as on most other international air transport routes is still governed by the administrative provisions of intergovernmental bilateral agreements and not by market forces. Therefore, the rrtore relevant question for aviation.policy would be whether competition on the North Atlantic routes could be best maintained by scrapping the bilateral agreements and embarking on a truly liberal open skies aviation agreement between the EU, the United States, and other countries. --

Entrepreneurial Community Development - Exploring Earned Income Activities and Strategic Alliances for Community Development Nonprofits

This paper examines social entrepreneurship from a community-development perspective. The target audience is community-development nonprofit organizations. The paper begins by contextualizing social entrepreneurship in community development and creating an analytical framework in which to think about efforts of organizations to integrate entrepreneurial and businesslike thinking. The paper presents key findings regarding both earned-income activities and strategic alliances as options for these organizations, as well as 10 key issues that arose as factors that impact their successful implementation. Information was gathered through a literature review, 29 interviews of practitioners, policymakers and academics and a survey of 59 community-development nonprofit organizations

Alliance block composition patterns in the microelectronics industry

In this note we examine whether a position in a technology alliance block is accessible to everyone. It appears that partners are selected on the basis of distinctive attributes they have, which can inhibit outsiders to join these alliance groups. Our findings clearly indicate that alliance blocks are composed of actors that have rather similar characteristics. The social selection processes that alliance block members employ vis-a-vis non-block members can create a source of competitive advantage in terms of a higher innovative performance. Empirical research is focused on the international microelectronics industry.strategic technology alliances, alliance block membership strategy, microelectronics industry, group-based competition

Coopetition and innovation. Lessons from worker cooperatives in the Spanish machine tool industry

This is an electronic version of the accepted paper in Journal of Business & Industrial Marketing[EN] Purpose – This paper aims to investigate how the implementation of the inter-cooperation principle among Spanish machine-tool cooperatives helps them to coopete–collaborate with competitors, in their innovation and internationalization processes and achieve collaborative advantages. Design/methodology/approach – The paper uses a multi-case approach based on interviews with 15 CEOs and research and development (R&D) managers, representing 14 Spanish machine tool firms and institutions. Eight of these organizations are worker-cooperatives.. Findings – Worker -cooperatives achieve advantages on innovation and internationalization via inter-cooperation (shared R&D units, joint sales offices, joint after-sale services, knowledge exchange and relocation of key R&D technicians and managers). Several mutual bonds and ties among cooperatives help to overcome the risk of opportunistic behaviour and knowledge leakage associated to coopetition. The obtained results give some clues explaining to what extent and under which conditions coopetitive strategies of cooperatives are transferable to other types of ownership arrangements across sectors. Practical implications – Firms seeking cooperation with competitors in their R&D and internationalization processes can learn from the coopetitive arrangements analyzed in the paper. Social implications – Findings can be valuable for sectoral associations and public bodies trying to promote coopetition and alliances between competitors as a means to benefit from collaborative advantages. Originality/value – Focusing on an “ideal type” of co-operation -cooperative organisationsand having access to primary sources, the paper shows to what extent (and how) strong coopetitive structures and processes foster innovation and internationalization

Social capital, local institutions, and cooperation between firms

There are many different reasons behind cooperation between firms and many possible interpretations are assumed to be based on an assessment of endogenous benefits of collective action directly generated by taking part in a joint project. This paper attempts at verifying the interpretative capacity of models analysing the cooperation between firms using not only technological or organisational factors and rivalry between firms, but also some proxy variables of social capital, of experience accumulation in collective action and of institutional capacity for initiative. The specific aim of our work is hence that of providing an interpretation of Italian inter-province differentials in the propensity of inter-firm cooperation.35

The Innovative Performance of Alliance Block Members: Evidence from the Microelectronics Industry

The primary goal of this paper is to improve our understanding of the complex relationship between the positioning of companies in alliance networks and their innovative performance. In particular, we expect that a firm's innovative performance depends partly on its position in specific network settings (block membership or nonblock membership), with additional effects caused by the technology positioning strategies firms pursue in terms of technological specialization in alliance blocks. Alliance groups derive their competitive advantage from their superior and particular technologies, which they develop and exploit together in the alliance blocks. Incorporating this moderating effect of the degree of technological specialization in alliance blocks (exploitation or exploration) seems to give more insight in the contextual issues in this stream of literature.strategic technology alliances, alliance block membership strategy, microelectronics industry, innovative performance, technology strategies

Hybrid Modes of Organization. Alliances, Joint Ventures, Networks, and Other 'Strange' Animals

The central message conveyed in this chapter is that there is a whole class of economic organizations that contribute substantially to what Coase (1992) called "the institutional structure of production". These arrangements fall neither under pure market relationships nor within 'firm boundaries'. They have multiplied because they are viewed as efficient in dealing with knowledge-based activities, solving hold-up problems, and reducing contractual hazards. They have properties of their own that deserve theoretical attention and empirical investigation.Hybrids, Alliances, Joint Ventures, organization theory, transaction costs, incomplete contracts