Bing-Sheng Teng

A Resource-Based Theory of Strategic Alliances

The resource-based view of the firm has not been systematically applied to strategic alliances. By examining the role of firm resources in strategic alliances, we attempt, in this paper, to put forward a general resource-based theory of strategic alliances, synthesizing the various findings in the literature on alliances from a resource-based view. The proposed theory covers four major aspects of strategic alliances: rationale, formation, structural preferences, and performance. The resource-based view suggests that the rationale for alliances is the value-creation potential of firm resources that are pooled together. We note that certain resource characteristics, such as imperfect mobility, imitability, and substitutability, promise accentuated value-creation, and thus facilitate alliance formation. We discuss how the resource profiles of partner firms would determine their structural preferences in terms of four major categories of alliances: equity joint ventures, minority equity alliances, bilateral c...

Trust, Control, and Risk in Strategic Alliances: An Integrated Framework

Trust and control are inextricably interlinked with risk in strategic alliances. Hence, to understand how partner firms can effectively reduce and manage this risk, we need to examine the inter-relationships between trust, control, and risk. In this article, we propose a comprehensive and integrated framework of the three constructs in the context of strategic alliances, contending that trust and control are the two principal antecedents of risk. First, we suggest that the three constructs are each comprised of certain key dimensions. Risk can be considered separately as relational risk and performance risk. The two dimensions of trust are identified as goodwill trust and competence trust, and control is differentiated in terms of the three modes of behaviour control, output control, and social control. Second, we discuss systematically the various linkages between the different types of trust, control, and risk in alliances. Third, we suggest several risk reduction approaches — minimizing relational risk through goodwill trust, behaviour control, and social control, while minimizing performance risk through competence trust, output control, and social control. Fourth, we discuss a number of trust-building techniques and control mechanisms to reduce risk in different types of strategic alliances. Finally, we develop propositions for empirical testing of the integrated framework and offer brief comments on future research directions and managerial implications

Transferring R&D knowledge: the key factors affecting knowledge transfer success

Based on a study of knowledge transfer within more than 15 industries, across three forms of governance, and between both domestic and international R&D partners, knowledge transfer success was found to be associated with several key variables, and to hinge upon (a) both R&D units’ understanding where the desired knowledge resides within the source, (b) the extent to which the parties share similar knowledge bases, and the extent of interactions between the source and the recipient to (c) transfer the knowledge and (d) participate in an articulation process through which the source’s knowledge is made accessible to the recipient.

Resource and Risk Management in the Strategic Alliance Making Process

Resource-based and risk-based views of strategic alliances have not been adequately reflected in the literature. This paper identifies four types of critical resources that the partners bring to an alliance: financial, technological, physical, and managerial resource. It also suggests two basic types of risk in strategic alliances: relational risk and performance risk. The alliance making process is examined in terms of the interactive effects of resource and risk on the orientations and objectives of the prospective alliance partners. Managerial implications are discussed and future research directions indicated in the form of propositions for empirical testing.

The Dynamics of Alliance Conditions in the Alliance Development Process

One of the key issues in understanding the developmental processes of strategic alliances is how the alliance conditions change over the different stages of alliance development. A related question concerns the nature of the co-evolutionary dynamics of alliances in terms of their constituent partner firms. In this article we propose an integrated process model of alliances that is based on alliance conditions, allianc developmental stages, and an alliance system comprising co-evolutionary elements. We suggest that alliance conditions, or the key characteristics of an alliance at any given moment, link the alliance environment (firm characteristics) and the alliance development process. We also explore how specific patterns of alliance conditions have differential impacts on the interactive elements of the alliance co-evolutionary system.

A risk perception model of alliance structuring

The literature on the strategic alliance structuring process does not provide an adequate view of the role of decision-makers in that process, especially about how alliance partners form their structural preferences. Given the critical role of structure in alliance management, the decision-making process regarding the choice of an appropriate alliance structure deserves particular research attention. We propose a model of strategic alliance structuring that has managerial risk perception as its core. Our model consists of the following parts: the antecedents of risk perception, relational risk and performance risk, risk perception and structural preference, and the resolution of preferences. We suggest that the structural preferences of partners are based on their perceptions of relational risk and performance risk, and the overall objective is to minimize the total risk. We also develop a number of propositions as elaboration of the model to facilitate empirical research and the effective management of the structuring process.

Cognitive Biases and Strategic Decision Processes: An Integrative Perspective

Previous studies have not adequately addressed the role of cognitive biases in strategic decision processes. In this article we suggest that cognitive biases are systematically associated with strategic decision processes. Different decision processes tend to accentuate particular types of cognitive bias. We develop an integrative framework to explore the presence of four basic types of cognitive bias under five different modes of decision making. The cognitive biases include prior hypotheses and focusing on limited targets, exposure to limited alternatives, insensitivity to outcome probabilities and illusion of manageability. The five modes of strategic decision making are rational, avoidance, logical incrementalist, political and garbage can. We suggest a number of key propositions to facilitate empirical testing of the various contingent relationships implicit in the framework. Lastly, we discuss the implications of this framework for research and managerial practice.

Time and Entrepreneurial Risk Behavior

Risk and risk behavior form an important segment of the entrepreneurship literature. Entrepreneurial risk behavior has been studied with both trait and cognitive approaches, but the findings do not adequately explain either how entrepreneurs differ from non-entrepreneurs, or how different types of entrepreneurs can be specified in terms of their risk behavior. This paper is an attempt to address these issues by introducing two temporal attributes that we consider significant for understanding risk behavior, given that risk is inherently embedded in time. First, we suggest the notion of risk horizon, differentiating short-range risk from long-range risk. Second, we examine the risk behavior of entrepreneurs in terms of their individual future orientation, in tandem with their risk propensity. We propose a temporal framework that seeks to explain, at once, the different types of risk behavior among entrepreneurs as well as the distinction between entrepreneurs and non-entrepreneurs. The framework is also applied to networking and alliancing activities of entrepreneurs. Finally, a number of propositions are developed to facilitate empirical testing of the insights implicit in the temporal framework of entrepreneurial risk behavior.

Governance structure choice in strategic alliances

Purpose – Strategic alliances have a variety of governance structures that can be broadly classified as joint ventures, minority equity alliances, and contractual alliances. This paper seeks to empirically examine the roles of four key determinants of governance structure choice, namely, joint R&D and joint marketing objectives, alliance management experience, and international partners.Design/methodology/approach – Several hypotheses are developed regarding governance structure choice and are tested with data from 765 alliances. A multinomial logistic regression (logit) model is used for statistical analysis, with five control variables.Findings – All hypotheses are supported, so that the roles of alliance objectives, alliance management experience, and international partners are demonstrated as being significant as determinants of governance structure choice in alliances.Research limitations/implications – Limitations stem from the data being from a single source, one that also relies on press announcem...

Sustaining Strategic Alliances: Options and Guidelines

Strategic alliances have become a popular competitive weapon in todays business environment. By definition, strategic alliances refer to interfirm co-operative arrangements aimed at pursuing mutual strategic goals. Examples of strategic alliances include joint ventures, joint R&D, product swap, equity investment and sharing, licensing, and others. The number of newly forged alliances has been growing at more than 25 per cent annually in recent years [1, 2]. Nevertheless, while many firms are rushing into such alliances as a quick-fix solution to their problems, the failure rate ofstrategic alliances has been consistently high [3]. A recent report on airline alliances found that fewer than 40 per cent of regional and fewer than 30 per cent of international alliances have been successful [4]. Many partners terminated their alliances before achieving intended objectives. It has been a busy twoway street: companies keep pulling themselves out of alliances even as more companies continue to forge new alliances. Hence, some theorists have suggested that strategic alliances may be a transitional governance mode, leading eventually to either more permanent organizational forms via mergers and acquisitions, or to dissolution. Thus, it is necessary to study alliances in some depth in order to understand the causes of alliance failures, and to provide effective guidelines for more sustainable alliances.