The evolution of alliance capabilities

evolution, alliance

Explorative and exploitative learning strategies in technology-based alliance networks

alliance, networks

Building new competencies for new business creation based on breakthrough technological innovations

This paper focuses on the question how companies can build new capabilities or competencies based on discontinuous technological innovations? In particular, we analyze how corporate ventures are set up to develop and commercialize these radical innovations can play a crucial role in the process of building new competencies (not only technological capabilities). New competencies are in turn the basis to create a range of new businesses. Building and deploying competencies are intrinsically related to new business development or other forms of corporate venturing and both co-evolve over time. The paper furthermore analyses what it takes to promote new business development (NBD) or corporate venturing (CV) as a trigger of corporate renewal. We argue that new competencies can only be built through a sequence of CV-initiatives and that both competence building and NBD can only fully be understood in relation to corporate strategy making. On the one hand, existing competencies and corporate strategy (vision or strategic intent) serve to direct and select these NBD-efforts through which the firm can enter new but attractive businesses and build new competencies (required to operate successfully in these businesses). A corporate vision should stretch the company beyond its existing resources and knowledge base; it leads to a fruitful misfit between what the company is and what it intends to become. On the other hand, new competence building also drives and refines the cognition of corporate strategy. New competence building and NBD based on radical innovations also demands to think differently about the organizational context and the role of top and middle managers. Finally, building competencies is not only a dynamic but also an organizational learning process: developing non-traditional businesses and new competencies is a function of a firm’s ability to organize itself into a knowledge-creating system. Management roles also play a crucial role in successfully implementing CV and new competence building

The evolution of alliance capabilities

This paper assesses the effectiveness and differential performance effects of learning mechanisms on the evolution of alliance capabilities. Relying on the concept of capability lifecycles, prior research has suggested that different capability levels could be identified in which different intra-firm learning mechanisms are used to enhance a firm’s alliance capability. However, empirical testing in this field is scarce and little is known as to what extent different micro-level learning mechanisms are indeed useful in advancing a firm’s alliance capability. This paper analyzes to what extent intra-firm learning mechanisms help firms evolve their alliance capability and create competitive heterogeneity. Differential learning may induce firms to yield superior returns in their alliances in comparison to competitors. We present a conceptual model that assumes capabilities evolve through different types of learning. The results show that different learning mechanisms have different performance effects at different stages of the alliance capability development process. This points to differential learning effects of learning mechanisms at the different levels of alliance capability. The main lesson from this paper is that firms can influence the evolution of their alliance capability as different mechanisms have differential performance effects and are more appropriate at different levels of alliance capability

Technological capability building through networking strategies within high-tech industries

Learning through networks has been a research topic for several years now. Technological learning is more and more based on a combination of internal and external learning and firms need to develop both technological and social capital for that purpose. This paper analyses the relationship between both types of capital and their impact on the technological performance of companies in high-tech industries. We claim and find strong empirical evidence that technological capital and social capital mutually reinforce each other¿s effect on the rate of innovation for companies with small patent and alliance portfolios. However, when companies have a strong patent portfolio and an extensive network of alliances then both types of capital become substitutes. We also found that there are two possible equilibriums: the first one emphasizes the development of strong internal technological capabilities supported by a small alliance portfolio. The second is the mirror image of the first one: these firms focus mainly on technology acquisition through alliance partners supported by a minimum of internal technological capabilities. Both strategies can co-exist in an industry. Finally, we find empirical evidence that companies who explore novel and pioneering technologies have a higher rate of innovation in subsequent years

Network Embeddedness and the Exploration of Novel Technologies: Technological Distance, Betweenness Centrality and Density

In this paper we analyze the innovative performance of alliance networks as a function of the technological distance between partners, a firm's network position (centrality) and total network density.We study how these three elements of an alliance network, apart and in combination, affect the 'twin tasks' in exploration, namely novelty creation on the one hand and its efficient absorption on the other hand.For an empirical test, we study technology-based alliance networks in the pharmaceutical, chemical and automotive industry.innovation networks;cognitive distance;centrality;density

Explorative and exploitative learning strategies in technology-based alliance networks

This paper aims to improve our understanding of how exploitative and explorative learning of firms is enhanced through their social capital. Both types of learning differ considerably from each other and we argue that the distinction between them may be an important contingency factor in explaining the value of direct, indirect and (non-)redundant technology-based alliances. In particular we argue that, since companies have to find a balance between explorative and exploitative learning (March, 1991), redundant and non-redundant links play a complementary role in inter-organizational learning processes: redundant information improves exploitative learning, non-redundant information enhances a firm’s explorative learning. The empirical results support the predictions about the contingency of the value of redundant information for both types of learning. Direct and indirect ties improve both types of learning but the impact on explorative learning is much larger. We find that direct ties have a moderating effect on indirect ties only in the case of exploitative learning. Firm size and technological distance between a firm’s partners also have a differential effect on exploitative and exploitative learning

Organizational structure in process-based organizations

This paper investigates the role of the organization structure in process-based organizations. We argue that companies cannot be designed upon organizational processes only or that process management can be simply imposed as an additional structural dimension on top of the existing functional or product dimension. It is more promising to consider process-based companies as organizations with a multidimensional structure with process ownership as a dominant dimension. The paper focuses on a number of consequences of the implementation of process-based organization structures. First, the complementary role of different types of processes is clarified. Second, we focus on the question how processes can be translated into the design of organizational units. Two key ideas underpin a process-based organizational structure. First, organizational units are organized around core processes. Second, other processes are added to these units minimizing the necessity of cross-unit coordination. This has several implications for planning and control activities and the way how process-based business units fit together to create a performing corporation. The latter can no longer be conceived within the traditional strategy-structure paradigm because of the fundamentally different role of middle and top manager