Sanjit Sengupta

Impact of Strategic Alliances on Firm Valuation

This study analyzed 119 strategic alliances formed during the period 1987–91. Using the event study methodology, we found that announcements of technological alliances enjoyed greater abnormal retu...

Managing the paradox of inter‐firm learning: the role of governance mechanisms

Organizational learning in inter‐firm exchange relationships poses a double‐edged sword. On one hand, inter‐firm learning is a desirable extension of organizational learning, developing a firm’s knowledge base, and providing fresh insights into strategies, markets, and relationships. On the other hand, inter‐firm learning can lead to unintended and undesirable skills transfer, resulting in the potential dilution of competitive advantage. This risk can be exacerbated by disparities in inter‐firm learning, resulting in uneven distribution of benefits and risks in the collaborative relationship. This paper articulates these two different views on inter‐firm learning, and second, develops a framework for the role of governance in regulating knowledge transfer. In particular, appropriate governance mechanisms must be crafted which match the learning intentions of the partners, the type of knowledge sought, and the designed duration for the collaboration, so as to maximize the benefits of learning while minimizing the risks. Implications for strategy and future research are offered.

Some Approaches to Complementary Product Strategy

Abstract Without complementary products, many high-tech innovations might be relegated to the scrap heap. For example, the development of desktop computers was not the sole impetus for the personal computing revolution. This innovation also depended on the development of word processing, spreadsheet, and desktop publishing software, as well as peripheral devices such as laser printers. Development of complementary products clearly offers increased opportunities for firms in many high-tech markets. However, managers must balance those opportunities with the added risks their firms face in attempting to develop products that may extend beyond their core lines of business. Focusing on the early business analysis stage of the product development process, Sanjit Sengupta identifies some alternative approaches that firms use for developing and marketing complementary products. Using data from 103 projects in the computer, consumer electronics, software, and communications industries, his study explores the relationships between a firm’s complementary product strategy and such conditions as complementary product opportunity, organizational fit, and the multiplier effect of the complementary product on sales of the primary product. His study also examines the sources of competitive advantage in complementary product strategies. Contrary to the notion that only large, well-funded firms can pursue a complementary product strategy, the study identifies various alternatives to expensive, in-house development efforts. Depending on the level of resources available for a particular project, a firm may choose various modes for adopting a complementary product strategy, including co-development alliances, proprietary interface development, co-marketing alliances, and original equipment manufacturer (OEM) agreements. Findings from this study indicate that competitive advantage in complementary product strategy comes from the multiplier effect on sales of the primary product and from the innovativeness of the complementary product. Even if the complementary product has low sales potential by itself, the product may still offer a significant competitive advantage through its multiplier effect on the sales of the primary product. Somewhat surprisingly, the results suggest that organizational fit and complementary product opportunity have no effect on competitive advantage. However, organizational fit does appear to be an important condition for adopting a complementary product strategy.

The Co‐Diffusion of Complementary Innovations: Supermarket Scanners and UPC Symbols

Co-diffusion is the positive interaction between the demands for complementary innovations that have separate adoption tracks. This interaction is of growing importance to business strategy because a firm can facilitate the diffusion of an innovation by supporting and participating in the development and commercialization of related complementary technologies. This phenomenon is of special importance where connectivity among products is central to end-user value. Louis P. Bucklin and Sanjit Sengupta report results of their empirical investigation of the co-diffusion of laser scanners in supermarkets and Universal Product Code (UPC) symbols printed on the packages of stocked items. Their results show asymmetric two-way co-diffusion effects between these innovations. Co-diffusion effects are found to be stronger than innovation effects. Finally, the analysis reveals differential co-diffusion effects across major market segments.

Strategic alliances: a valuable way to manage intellectual capital?

Considers two forms of strategic alliances, technological and marketing, and examines how these alliances foster formation and maintenance of intellectual capital. Empirical evidence suggests that on average, strategic alliances do create value for shareholders that is consistent with the creation of intellectual capital. Between the two, technological alliances are potentially more beneficial than marketing alliances, and more likely to create intellectual capital. Empirical evidence is consistent with the notion that the gains from alliances are not shared equally by all the partners. When intellectual capital is created by the smaller or financially weaker partner, the return may be appropriately captured by the owner of such capital through strategic alliances. However, if the intellectual capital is created by the larger or financially stronger firm which moves first in an alliance relationship, the return on this intellectual capital may be subject to opportunistic exploitation by the late moving partner.

An Empirical Investigation of Key Account Salesperson Effectiveness

This study develops and empirically tests a model representing the determinants of key account salesperson (KAS) effectiveness. The model supported suggests that the determinants of KAS effectiveness are strategic ability and intrapreneurial ability operating though the intermediate processes of communication quality and customer trust. Strategic ability is the KASs ability to analyze customer organizational and business problems and focus on their long-term interests. Intrapreneurial ability is the KASs ability to locate personnel or other resources within the seller firm and deploy them to assist the customer account.

Mapping the outsourcing landscape

Purpose – This article develops a framework that helps clients and service providers make better decisions about whether and when to outsource, and on the appropriate type of outsourcing arrangement.Design/methodology/approach – The paper is conceptual in nature.Findings – Companies must align the governance of business functions to the underlying needs, resources, and desired outcomes. Simple procurement may suffice for acquiring standard business services such as cafeteria catering. When economies of scale exist and when transfer of explicit, codified knowledge is involved, straight‐forward transactional “lift and shift” IT and BP outsourcing arrangements will yield cost savings and efficiency. When transfer of know‐how is more tacit, and the goal is to add value to the clients customers beyond cost efficiency, longer‐term strategic outsourcing is appropriate. Finally, when there are risks to expropriation of proprietary knowledge and capital invested, transformational outsourcing is best.Practical imp...

Increasing the Effectiveness of Export Assistance Programs

Abstract This study focuses on the export assistance needs of small and medium-sized firms in the California EnviroTech industry. The objectives of this study are to: (1) provide public sector assistance providers research-based recommendations to increase the effectiveness of their export assistance programs to the EnviroTech industry; and (2) promote the advantages of a single industry study as the basis for providing public sector export assistance.

Serving base‐of‐the‐pyramid markets: meeting real needs through a customized approach

Purpose – This article aims to propose a continuum of strategic engagement approaches to base‐of‐the‐pyramid (BOP) markets ranging from non‐profit and government aid to corporate social responsibility (CSR) programs and social entrepreneurship. A framework is presented to identify which approach to serving the BOP market makes the most sense under certain conditions, depending on availability of consumer resources to participate in the initiative, the infrastructure available for the initiative to leverage, and whether the focus of the initiative is to be self‐sustaining over time.Design/methodology/approach – This is a conceptual article based on literature review and synthesis.Findings – Eight different approaches to engage with BOP markets are recommended under different combinations of three underlying conditions: consumer resources, infrastructure availability and self‐sustainability goals.Originality/value – The paper presents a continuum of strategic engagement approaches to BOP markets.

Some antecedents of exclusivity in bilateral interorganizational relationships

In bilateral interorganizational relationships, individual firms self-interest is subordinate to the larger interest of the collective system. Bilateral governance is facilitated by exclusivity under certain conditions. Exclusive relationships draw partners closer and improve coordination. However, exclusivity leads to a loss of flexibility in dealing with turbulent environments. We test relationships between exclusivity and antecedent variables from transaction-cost analysis, resource-dependence theory, and organization theory. We find that while relationship-specific investment calls for more exclusivity, interdependence and rapid technological change call for less. Further, in the computer and semiconductor industry, exclusivity is negatively related to perceived effectiveness. Hence exclusivity should be used judiciously in the management of bilateral interrorganizational relationships.