Academic journal article International Journal of Business

Interrelatedness, Interdependencies, and Domain Learning in Alliance Portfolios

Academic journal article International Journal of Business

Interrelatedness, Interdependencies, and Domain Learning in Alliance Portfolios

Article excerpt

I. RESEARCH BACKGROUND

IBM generated more than one-third of its revenues through their alliance portfolio (Feder, 2001; Parise and Casher, 2003). Heimeriks, Klijn, and Reuer (2009) also report that Cisco's alliance portfolio generated more than 13 percent of its total business activity in the 2000s. An alliance portfolio is a firm's collection of direct alliances with partners (e.g., Hoffmann, 2007; Lavie and Miller, 2008), and the collection averagely increased from four to more than thirty partners over the 1990s (Lavie, 2007).

One of the primary activities of an alliance portfolio is learning, which enables a firm to access and acquire new knowledge residing outside its boundaries and to collaboratively leverage existing knowledge with partners (e.g., Beckman, Haunschild, and Philips, 2004). Previous studies approach such learning from the function, structure, and other peripheral attributes involved in the alliance (Lavie and Rosenkopf, 2006; Lin, Yang, and Demirkan, 2007), or by examining process-based learning inside the alliance (e.g., Kale and Singh, 2007). There has been rapid progress in the study of the interorganizational learning, and most research undermines the fact that a firm may also learn by forming alliance that is different from or similar to its core business--domain learning.

This study argues that domain learning is the learning strategy of a firm to maintain an alliance portfolio to conform the relatedness and dependencies toward partners' resources. The resource-based theory (Barney, 1991; Das and Teng, 2000) suggests that greater relatedness leads to convergence learning due to similar bases of knowledge (e.g., Makri, Hitt, and Lane, 2010), while less relatedness leads to divergence learning due to less-redundant knowledge (e.g., Baum, Calabrese, and Silverman, 2000). Another perspective suggests that it is difficult for similar partners to work together within one domain, because their use of similar resources can make them compete against each other (e.g., Chen, 1996) and offer less new skills and knowledge for the other party to learn (e.g., Wang and Zajac, 2007).

This study further argues that these inconsistencies can be resolved by considering the nature of relationships between a firm and its partners in an alliance portfolio. Resource dependence theory (Emerson, 1962; Pfeffer and Salancik, 1978) suggests that the level of interdependence toward partners could explain firm behavior. Specifically, convergence learning is adopted by a firm when there are asymmetrical dependencies toward partners in an alliance portfolio in order to access and exploit partners' knowledge (Grant and Baden-Fuller, 2004). In contrast, a firm tends to employ divergence learning when there are balanced dependencies toward partners, as greater incentives to exchange valuable resources exist (Casciaro and Piskorski, 2005), and there is a stronger relational orientation (Gulati and Sytch, 2007), which stimulates a firm to experiment with its existing capabilities in different industries. In addition, this study proposes that the interaction between these perspectives could explain when the ambidextrous learning mode, rather than divergence or convergence, is chosen.

The contributions of this study are as follows: First, this study introduces the concept of convergence/divergence learning as an extension of the exploitation/ exploration concept of March (1991), and empirically tests the viability of this concept. Second, this study extends RBV (Barney, 1991; Das and Teng, 2000) to organizational learning (Levinthal and March, 1993) by relating a firm's resources with the alliance portfolio that they have. Third, this study extends resource dependence theory (Pfeffer and Salancik, 1978) by asserting that differential dependencies determine a firm's learning decisions. Fourth, this study enriches the ambidexterity hypothesis (e.g., He and Wong, 2004) by integrating the arguments of resource-based and resource dependence theory. …

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