Jongkuk Lee

The Timing of Codevelopment Alliances in New Product Development Processes: Returns for Upstream and Downstream Partners

Upstream biotech firms (i.e., upstream partners) and downstream pharmaceutical firms (i.e., downstream partners) often form alliances to cope with performance uncertainty and to exploit product specificity in new product development. Although the performance implications of such alliances have been investigated, research has not offered insight into how the timing of such codevelopment alliances influences partner returns. The authors develop and test predictions that timing changes the costs and benefits accruing to upstream and downstream partners and that the effect of timing is influenced by a set of alliance, firm, and market conditions. An event study of 276 codevelopment agreements between biotech and pharmaceutical firms during 1998–2010 reveals that alliance governance structure, partner technological capability, and the competitiveness of market environments change the abnormal returns achieved by partners entering these relationships in important ways.

The Alignment of Contract Terms for Knowledge-Creating and Knowledge-Appropriating Relationship Portfolios

Interfirm collaborative relationships for developing new products involve the two fundamental tasks of creating new knowledge and appropriating the newly created or current stocks of knowledge. This study examines the alignment of two contract terms—form of resource integration (how partners integrate their resources) and form of equity sharing (whether partners are engaged in equity investment)—for knowledge-creating and knowledge-appropriating relationship portfolios. By analyzing interfirm relationship agreements initiated in the pharmaceutical industry between 1990 and 2006, the author shows that knowledge-creating and knowledge-appropriating relationship portfolios benefit from different alignments of contract terms to address their unique concerns. The author also shows that the appropriate alignments of contract terms are more critical for small firms than for large firms. The results provide specific insights into the management of knowledge-creating and knowledge-appropriating relationship portfolios for developing a greater number of radical and incremental new products.

A dynamic process of buyer‐seller technology adoption

Purpose – The objective of this paper is to propose a process through which channel stakeholders interact with one another to adopt a buyer‐seller technology with the purpose of improving the efficiency of their supply chain. The paper seeks to examine how ongoing business relationships between channel stakeholders influence the process of buyer‐seller technology adoption.Design/methodology/approach – The paper extends the technology acceptance model (TAM) to dyadic adoption behaviour by incorporating a social network perspective for buyer‐seller relationships.Findings – Buyer‐seller technology adoption occurs at multiple levels throughout a supply chain network. Although each channel stakeholder forms its own behavioural intention to adopt a new enterprise technology, actual adoption occurs at the dyadic level between two channel stakeholders. Network embeddedness and resource dependence can influence the individual firm and dyadic processes of buyer‐seller technology adoption.Research limitations/implic...

Project Customization and the Supplier Revenue–Cost Dilemmas: The Critical Roles of Supplier–Customer Coordination

This study examines customization as a coordination problem in transactions with business customers. Marketing research has investigated challenges associated with customized offers from the customer side; however, scant research has examined the suppliers challenges and their performance implications. The authors distinguish between project revenues and costs to reveal a fundamental dilemma that suppliers face during customization. Analyses of dyadic survey data collected from a software supplier and its business customers, as well as objective revenue and cost data, reveal a tension between project revenues and costs. The outcomes of customization depend on factors that relieve the coordination problem, such as customer demand ambiguity, customer participation, product modularity, project team technological capability, and relational embeddedness. These findings provide a basis to assess the value of customization as a tool to implement a customer-oriented business-to-business marketing strategy.

If it takes a village to foster innovation, success depends on the neighbors: : The effects of global and ego networks on new product launches

Launching breakthrough and incremental new products is vital to firm performance; it also resonates with both ego (i.e., directly connected partners) and global (i.e., interconnected ties in an industry) network perspectives. Prior research has listed several ego network– and global network–level factors that affect innovations, but this study goes a step further, to reveal the interactions of these factors as critical product launch mechanisms. An analysis of alliance networks in the consumer packaged goods industry from 1990 to 2010 shows that a central position in a global network represents a double-edged sword: it improves a firms incremental new product launches but harms its breakthrough new product launches. Furthermore, a firms ego network (manifested as density and diversity) and R&D capability enable it to leverage its global network position by enhancing the benefits for incremental new products and mitigating its hazards for breakthrough new products. This studys findings thus offer new insights into the role of ego and global networks in facilitating or hindering new product launches.

Alliance Experience and Governance Flexibility

Prior work has mapped the transaction at the heart of an alliance to the risks of opportunism inherent in that alliance and, ultimately, to how the alliance is structured and governed. We extend this approach by noting that the parties in an alliance do not necessarily perceive the same hazards as predominant and thus may have different preferences for how the alliance is structured. Nevertheless, it is in each partys best interest to find a structure that protects its interests, while also allowing its partner to protect its interests sufficiently. Drawing from the alliance management capabilities literature, we argue that firms with more alliance experience are better able to protect their interests under any given alliance structure, making the choice of structure less consequential to them. The resulting governance versatility provides a competitive advantage by enabling firms to form advantageous alliances that are less available to inexperienced competitors. Our study of innovative alliances in biopharmaceutical industry lends support to the hypotheses, allowing us to advance the literature on governance choice in alliances, the literature on alliance management, and their intersection.

Understanding the Effects of Plural Marketing Structures on Alliance Performance

A plural alliance structure involving multiple downstream partners has become increasingly popular, yet investigations of marketing alliances continue to address mainly dyadic structures. The authors present learning and dependence balancing as key mechanisms to understand the relative performance differences between plural and dyadic structures, as well as the determinants of effective collaboration in a plural structure. Two complementary studies test the performance of plural and dyadic structures in a wide range of high-tech industries. The analysis of both plural and dyadic structure alliances in an event study shows that plural structures outperform dyadic structures for the upstream firm when marketing alliances extend to product-related tasks, the upstream firm has more alliance experience, or the industry is growing fast; however, dyadic structures perform better when the upstream market is more competitive. A second study, focusing only on plural structure alliances, shows that horizontal relationship factors (i.e., market overlap and prior relationship between downstream partners) interact with the upstream firms greater alliance experience and reputation to lead to better returns for the upstream firm.

Market-Driven Technological Innovation Through Acquisitions The Moderating Effect of Firm Size

This study is an effort to reveal market-driven innovation via acquisitions. By differentiating the organizational process of resource integration pertaining to market- versus technology-driven innovation via acquisitions, we show that product market relatedness and technology relatedness have differential effects on postacquisition innovation performance, depending on the size of the acquirer. Our analysis of acquisitions in high-tech industries indicates that larger firms maximize their postacquisition technological innovation performance at a lower level of technology relatedness and, in contrast, at a higher level of product market relatedness, whereas the opposite is true for smaller firms. This study contributes to the acquisitions research by identifying (a) market-driven innovation via acquisitions and (b) different mechanisms through which product market and technological resources affect postacquisition technological innovation.

When do firms enter a repeated partnership? The effect of contract terms and relative partner characteristics

Purpose The purpose of this paper is to understand the mechanisms of partner selection from the transaction cost economics’ viewpoint. This paper reveals that a firm’s choice to initiate a new alliance with a new partner or form a repeated alliance with an existing partner depends on contract terms and the relative characteristics of partners. Design/methodology/approach The authors examine 555 alliances in high-tech industries from 2001 to 2009, which the authors collected from secondary sources, including the Securities Data Company Platinum and Compustat databases. The authors use a logit model to reveal the effect of contract terms and relative partner characteristics on repeated partnership. Findings The results show that repeated partnership is less likely to be combined with equity sharing. Repeated partnership is also negatively associated with the functional scope of a new alliance. Finally, a firm is more likely to enter a repeated partnership when its partner is from a different country. Originality/value This research provides new insights into how the choice of an alliance partner depends on contract terms and the relative characteristics of partners. Identifying factors associated with partner selection helps us understand the fundamental mechanisms of initiating a new alliance. It allows focal firms to foresee the behavior of their peers or competitors in certain circumstances and thus provides important insights for developing corresponding strategies more effectively.