Interorganizational Routines and Performance in Strategic Alliances

Abstract

This paper applies evolutionary economics reasoning to the strategic alliance context and examines whether and how routinization processes at the partnering-firm level influence the performance of the cooperative agreement. In doing so, it introduces the concept of interorganizational routines, defined as stable patterns of interaction among two firms developed and refined in the course of repeated collaborations, and suggests that partner-specific, technology-specific, and general experience accumulation at the partnering-firm level influence the extent to which alliances result in knowledge accumulation, create new growth opportunities, and enable partnering firms to achieve their strategic objectives. We also consider how governance design choices at the transaction level shape the effectiveness of interorganizational routizination processes. Based on a sample of 145 biotechnology alliances, we find that only partner-specific experience has a positive impact on alliance performance, and that this effect is stronger in the absence of equity-based governance mechanisms. We interpret these results to support the role of interfirm coordination and cooperation routines in enhancing the effectiveness of collaborative agreements.

A Thought and Exercise on Strategic Planning

“…For example, Hanwha, one of conglomerates in Korea, rephrased their mission around the 1990's and earlier of new millennium to expand into new frontier of industries, say, the solar and research units at the global extent. That seems inevitable to turn from the traditional chemicals and heavy industries since the world market entered into a stiff phase (Zollo, M., Reuer, J. J., & Singh, H., 2002). Most notably, the financial crisis of Korea in early 1990's can be seen very strategically for the case of Sam Sung.…”

“…In the process, however, we need to note the elements of humanity and the concept of common good can play much role or serve an idealistic destination. While the SWOT or stakeholders' analysis undertake to make a point of objective assessment, we see useful researches from the psychologist and professors on the industrial relations (Zollo, M., Reuer, J. J., & Singh, H., 2002). For example, as learnt, the stakeholders may traditionally be viewed from their attributes, which are mostly objective on "definite, dominant, dormant" as well as "power, legitimacy and urgency."…”

“…CU will enter around a 15 th rank among the national universities by 2020." This vision will be enabled by mounting on the five core of vantage points (Zollo, M., Reuer, J. J., & Singh, H., 2002). First, CU will ensure the soundness of finance and budget by the innovative strategic management.…”

R&D partnership portfolios and the inflow of technological knowledge

“…In uncertain environments, firms tend to engage in partnerships with firms they have collaborated with before (Gulati 1995). Such repeat collaboration promotes the development of cooperative routines, especially in the area of R&D in which tacit knowledge sharing requires rich interactions among the personnel of the sponsoring firms (Hoang & Rothaermel, 2005;Zollo, Reuer, & Singh, 2002). Thus, the inflow of technological knowledge from R&D partners increases with repeat collaboration.…”

“…Early-stage experimental and applied research is rife with uncertainties and requires the combination and recombination of bits of knowledge that are implicit, poorly objectified, and embedded within the context of individual firms (Kogut & Zander 1992;Van de Ven & Polley, 1992). Recognizing, identifying, and understanding the value of such knowledge will require significant efforts and so the more firms can rely on a basic, pre-established, understanding of their partners, the more they can mitigate any potential information-gathering problems (Kale, Singh, & Perlmutter, 2000;Simonin, 1999;Zollo et al, 2002). This understanding is significantly greater when firms have collaborated before and so in a research-focused portfolio, firms should benefit more from a reliance on preestablished routines shared with repeat partners.…”