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Wassmer (2010) "Alliance portfolios: A review and research agenda

26 important questions on Wassmer (2010) "Alliance portfolios: A review and research agenda

What does this article offer?

A review of extant alliance portfolio literature and organizes it around three key areas:

The emergence of alliance portfolios
The configuration of alliance portfolios
The management of alliance portfolios

How is alliance portfolio defined in this study?

A focal firm's past as well as ongoing strategic alliances of all types.

On which level is this study situated?

On the business as well as the corporate level

Which two theories have been integrated in a significant number of studies?

Social network theory
Resource-based view

What are the motivations why firms form strategic alliances?

To access new valuable resources from partners
To reduce transaction costs
To learn from a partner
To deal with uncertainty through future options for expansions
To improve the competitive positioning vis-à-vis rivals

What is one of the main motivations for firms to build alliance portfolios?

The management of risk and uncertainty

On which two perspectives can the emergence of alliance portfolios be explained?

On the firm level analysis
From the level of the individual manager

How can the emergence of alliance portfolios be explained on the firm level analysis?

Firms build alliance portfolios mainly for strategic reasons to enhance their strategic competitiveness.

How can the emergence of alliance portfolios be explained on the level of the individual manager?

Alliance portfolios are simply the result of managers' efforts to maximize their own utility functions

Which dimensions compises alliance portfolio configuration?

The size dimension determined by characteristics such as the number of alliances and partners
The structural dimension constituted by characteristics such as breadth, density, and the level of redundancy within the portfolio
The relational dimension made up of characteristics such as the tie strength of individual alliances in the portfolio
The partner dimension focusing on certain partner-related characteristics

What does the configuration of a focal firm's alliance portfolio determine?

The quality, quantity, and diversity of information and resources to which the focal company has access
The efficiency of the access to these network resources
The flexibility or stability of the focal company's position in the interorganizational field

What are the six prominent research issues that have been discussed in the existing literature?

The role of alliance portfolio size
The role of alliance partners
The role of structural and relational alliance portfolio characteristics
The role of interdependencies between alliances and alliance partners
Changes that firms make in the configuration of their alliance portfolios over time
The role of experience accumulation, learning, and knowledge transfer within alliance portfolios

What is the role of the alliance partners?

Various studies have examined the role that alliance partners play in determining the benefits that firms derive from their alliance portfolios. Partner-level attributes that have been examined include the reputation and quality, resource contributions, and internationality of the partners.

From the perspective of young and entrepreneurial firms, the affiliation to larger already established alliance partners can provide a range of benefits, such as preferential access to valuable resources or spillover effects from the partner’s reputation. Findings, however, stay somewhat inconclusive.

What is the role of international partners in the alliance portfolio?

It can on one side provide many benefits such as access to new resources, information, and capabilities that may not be available from local partners. On the other side, an alliance portfolio with high diversity of international partners can also add additional complexity to the management of the alliance portfolio.

What are the structures and relational alliance mechanisms?

The tie strength of individual alliances
The structure of the network.

In which way can strong ties in the context of alliance portfolios be a double-edged sword?

On one side, an alliance portfolio of strong dyadic ties can affect a focal firm’s innovative capabilities positively if they are trust based, knowledge intensive, and reinforced through the development of social content between alliance partners, relationship-specific investments, and the deepening of mutual knowledge.
On the other side, they can also affect a focal firm’s innovative capabilities negatively by stimulating a vicious circle in which a reduced number of contacts, decreased flexibility for collaboration with new partners, and diminishing responsiveness to new market trends reinforce each other, leading to a small, homogeneous, and closed network.

What are the interdependencies in alliance portfolios and the portfolio effect?

This area of research is central to alliance portfolios because interdependencies in alliance portfolios are critical determinants whether the overall value that firms derive from their alliance portfolios is greater or smaller than the sum of the values of each individual alliance in the portfolio. Surprisingly, this area of research in underresearched and lacks empirical studies on the subject.

Which two different types of outcomes do the interdependencies in alliance portfolio create?

Synergies
Conflict.

On which two different levels can synergy- or conflict creating interdependencies in alliance portfolios occur?

Between individual alliances - more specifically between alliances of one business unit or between various alliances of different business units.
Between a focal firm’s partners within an alliance portfolio.

When do conflicts between partners occur?

When they affect one another negatively because they (a) are members of competing networks, (b) are strong rivals in an industry, or (c) promote competing technologies.

What are the changes that firms make in the configuration of their alliance portfolios over time? From two different perspectives:

The antecedents that drive change in the configurations, including strategic uncertainty, the potential to shape the environment, and the firm’s alliance strategy.
Changes in the alliance portfolio configurations treated as an antecedent to an outcome variable such as a firm’s competitiveness.

What is the role of experience accumulation, learning, and knowledge transfer within alliance portfolios?

The way firms configure their alliance portfolios determines not only which experience they accumulate and how and what they learn but also the benefits they derive from their alliance portfolios. Moreover, the configuration of an alliance portfolio also affects a firm’s absorptive capacity and therefore its ability to use knowledge accessed from its alliance partners. Still, very little is known on how firms configure their alliance portfolios to balance their exploration and exploitation activities.

What are the three factors that need to be considered to fully understand the value that is created by a new alliance?

The amount of prior alliance experience
The heterogeneity of that prior alliance experience
The degree of novelty of the new alliance that is added to the alliance portfolio.

Where is research concerned with alliance portfolio management focused on? (two distinct interrelated topics)

The creation of alliance capability through the engagement in multiple alliances
The approaches and tools used to manage multiple simultaneous alliances

How is alliance capability defined?

A firm's ability to identify partners, initiate alliances and engage in the ongoing management and possible restructuring and termination of these alliances

What are the approaches and tools for alliance portfolio managment?

Some authors have argued that the performance assessment should be systematic, continuous, and conducted on three different levels:

The individual alliance level where the performance of the alliance is assessed,
The business unit level where the performance of the alliance portfolio is assessed, and
The corporate level where the effectiveness of the firm’s alliance policy is assessed.

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