In this paper, we offer a comprehensive alliance portfolio diversity construct that includes partner, functional, and governance diversity. Grounding our work primarily with the resource‐ and dynamic capabilities‐based views, we argue that increased diversity in partners' industry, organizational, and national background will incur added complexity and coordination costs but will provide broadened resource and learning benefits. Increased functional diversity results in a more balanced portfolio of exploration and exploitation activities that expands the firm's knowledge base while increased governance diversity inhibits learning and routine building. Hypotheses were tested with alliance portfolio and performance data for 138 multinational firms in the global automobile industry during the twenty‐year period from 1985 to 2005. We found alliance portfolios with greater organizational and functional diversity and lower governance diversity were related to higher firm performance while industry diversity had a U‐shaped relationship with firm performance. We suggest firms manage their alliances with a portfolio perspective, seeking to maximize resource and learning benefits by collaborating with a variety of organizations in various value chain activities while minimizing managerial costs through a focused set of governance structures. Copyright © 2010 John Wiley & Sons, Ltd.

A firm's ability to acquire and exploit external knowledge is often critical to achieving and sustaining a competitive advantage. In this study, we adopt a multi-dimensional view of absorptive capacity and focus specifically on the application of external knowledge that has been obtained via university-firm collaborations. We examine various organizational conditions that we propose influence a firm's ability to apply external knowledge for explorative and exploitative innovations. We collected data by a survey of firms in industries that frequently work with university research centres (URCs) and from publicly available sources. Results show that predictors of exploration and exploitation of the application of external knowledge differ. Surprisingly, technological relatedness, a common measure of absorptive capacity, is negatively associated with the application of external knowledge to explorative innovations, indicating that knowledge from more distant sources is applied more to exploration. Results also indicate that the effects of two external learning capabilities (prior experience with URCs and technological capability) on knowledge application are moderated in such a way by the tacitness of the knowledge transferred that experience is a stronger predictor when the knowledge is more explicit and technological capability is a stronger predictor when the knowledge is more tacit. We discuss the implications of these findings for research on the application of external knowledge. Copyright (c) Blackwell Publishing Ltd 2009.

University research centers can be beneficial to industrial firms by providing firms with a number of relationship alternatives that facilitate the advancement of knowledge and new technologies. This multi-method field study indicates that larger more mechanistic firms especially those in resource intense industrial sectors use knowledge transfer and research support relationships to build competencies in non-core technological areas. In contrast, smaller more organic firms particularly those in high tech industrial sectors focus more on problem solving in core technological areas through technology transfer and cooperative research relationships. We also found that champions at the firm play a key role in these dynamics. Implications for industry and universities are discussed.

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We explore transaction cost economics (TCE) and real option (RO) rationales for alliance governance and find the predictive power of each depends upon the type of uncertainty confronted. Our review of alliance activity from 1995 through 2000 for 642 alliances confirms that governance is influenced directly by partner, task, and technological uncertainty and by interactions among asset co-specialization, partner uncertainty, and task uncertainty. Consistent with TCE, co-specialized assets increased the likelihood of hierarchical governance. Partner and task uncertainty increased this effect. Consistent with RO, we find technological uncertainty decreased the likelihood of hierarchical governance.