Institute for Operations Research and the Management Sciences (I N F O R M S)
Abstract
Alliances are typically viewed as an acceleration strategy for firms able to access or acquire the resources and capabilities of partner firms, yet theoretical and empirical work suggests that alliances can actually impair speed performance due to the costs stemming from partner cooperation and coordination. In this paper, we advance the premise that firm heterogeneity may determine whether alliances enhance, or impair, the speed performance of firms. We then turn to focus on one particular kind of firm heterogeneity, the intrinsic speed capabilities of the firm, by which we mean the ability to execute investment projects or operations faster at the same cost. Our expectation is that slow firms, or those firms lacking intrinsic speed capabilities, will realize substantial speed benefits from partnering due to the capability access from partner firms. We also expect that the benefits enjoyed by slow firms from partnering can persist into future projects due to capability acquisition from the partnership, but that these benefits hinge on the firm possessing absorptive capacity in the form of previous partnering experiences. Results from random coefficient models that address selection concerns and from treatment effect analyses provide support for these expectations in on-shore oil and gas drilling projects
