Explicit and tacit synergies between alliance firms and radical innovation: the moderating roles of interfirm technological diversity and environmental technological dynamism

Abstract

This study draws on theories of organizational inertia and relational view to examine how the pursuit of partnership synergy influences radical innovation in different technological contexts. We differentiate between two types of synergy: explicit synergy, defined as the potential to exchange interfirm operational elements to renew processes or capabilities, and tacit synergy, conceptualized as the potential to synthesize cross‐boundary resources to develop new perspectives or thinking modes. We find that both explicit and tacit synergies have positive impacts on radical innovation, and such impacts are contingent on interfirm technological diversity and environmental technological dynamism in opposing ways. Specifically, environmental technological dynamism positively moderates the relationship between explicit synergy and radical innovation but not the relationship between tacit synergy and radical innovation. In contrast, interfirm technological diversity positively moderates the relationship between tacit synergy and radical innovation but not the relationship between explicit synergy and radical innovation. Our study sheds new light on the generation of radical innovation in alliances. It also provides practitioners with useful guidelines for crafting synergy strategies that will facilitate the pursuit of radical innovation.

Regional expansion of emerging market SMEs: the roles of domestic market environmental uncertainty and international alliance partner diversity

“…Furthermore, our findings reveal that domestic market technological and market dynamism propel emerging market SMEs to engage with their IAPD portfolio (Drnevich & West, 2021). Due to the unpredictability in their domestic markets, emerging market SEMs-especially those in the Asia-Pacific region-rely on their IAPD to gain novel knowledge to help identify technology, innovation concepts, and customer information appropriate to target foreign markets (Hao et al, 2020;Huo et al, 2018;Robson et al, 2019). In sum, our findings contribute to the relational view theory by presenting the differential domestic market environment levels under which emerging market SMEs utilize their IAPD portfolios.…”

Tacit knowledge in organizations: bibliometrics and a framework-based systematic review of antecedents, outcomes, theories, methods and future directions

“…Knowledge sharing behaviours affect radical and incremental innovation greatly. According to Hao et al (2020), radical innovation is positively affected by both explicit and tacit synergies and such influences are dependent on “inter-firm technological diversity and environmental technological dynamism in opposing ways”. The impact of ethical leadership on radical and incremental innovation with the tacit and explicit sharing of knowledge mediating roles was investigated by Lei et al (2020) and they suggested that there is a positive relationship between ethical leadership and radical and incremental innovation.…”

Exploring Critical Success Factors of Competence-Based Synergy in Strategic Alliances: The Renault–Nissan–Mitsubishi Strategic Alliance

“…Recent research by Hao et al (2020) has shown that a strategic alliance as a business partnership relates to different types of synergistic effects: explicit and tacit. While explicit synergy emerges when business partners share complement assets or technologies (Zaheer et al 2013), a tacit synergy can be pursued when business partners' knowledge bases spur joint learning and inspiring innovation that could not be predicted upfront (Baum et al 2010).…”

“…In the last, business partners' core competencies can be integrated into new products development, and thus reframing their thinking modes, adding market value (Hernandez and Shaver 2019). For instance, (Hao et al 2020) argued that when automobile manufacturers ally "to adopt each other's core parts," they pursue an explicit synergy, whereas by synthesizing automobile technologies and rechargeable batteries, the tacit synergy "can reframe their way of thinking of how an automobile can be powered" (Hao et al 2020, p. 434).…”