Organizations can gain substantial knowledge synergies from their alliance portfolios, and research suggests firms may benefit even more when their partners compete directly with each other. However, firms can only capture such synergies if their own inventors are allowed to freely exchange knowledge obtained from these partners to create novel combinations. We challenge this premise and argue that because partners in such configurations are more concerned about the risks of knowledge leakage to their rivals, they will pressure the focal firm into imposing credible safeguards that restrict the access and handling of knowledge inside its organization. We predict that the constraints imposed by these safeguards will be reflected in a higher disconnectedness in the focal firm’s inventor collaboration network, with the extent of these constraints tied to the relative technological bargaining power the focal firm holds over its partners. Importantly, these safeguards are not costless, and we predict that the disconnectedness induced will affect the focal firm’s innovation performance by undermining its ability to create and appropriate inventive value. Using a longitudinal sample of pharmaceutical firms , we find consistent support for these arguments. Our study contributes to research on inter-firm alliances, intra-organizational networks, and innovation, while offering practical insights for managers.
While young firms often benefit from their relationships with established firms, these relationships can be risky. Hence, during their relationship with established firms, young firms must constantly monitor signs of a failing partnership and terminate it before being in a disadvantageous position. However, discontinuing the alliance with an established firm can also be risky, especially if the young firm has limited alternative collaborative opportunities. Our study adopts the young firm’s perspective and dynamically weighs the tradeoffs between the risks of continuing and discontinuing its relationship with established firms, thereby deciding on its termination. We first develop an analytical model to understand how the alliance duration (time from alliance formation to termination) between young and established firms is affected by alliance, firm, and industry characteristics. We then test the resulting hypotheses on a sample of 1,111 alliances with licensing deals formed between 159 established pharmaceutical firms and 448 young biotechnology firms during the 1986 to 2000 period, which straddles the technological discontinuity of combinatorial chemistry. Our empirical results provide partial support for the hypotheses derived from the analytical model, informing us of firms’ rational alliance duration decisions as well as their deviations from rationality. In presenting both optimal alliance duration decisions and suboptimal alliance duration practices, our mixed-method approach offers important implications for theory and practice.
We examine whether acquisitions affect the divestment of firms' alliance-based relational assets. Using data from the biopharmaceutical industry and a matched case–control research design, we find that alliances are more likely to be terminated following acquisitions compared to alliances not subject to acquisitions. This higher termination likelihood is driven by acquisitions where the acquirer's alliance management capacity is stressed, and by alliances inherited from targets. The inherited alliance effect is attenuated by the target's partner's common connections with the acquirer but amplified by the target's partner's unique connections outside the merging firms' alliance portfolios. These findings are consistent with our relational view-based theorizing on the post-acquisition challenges of retaining alliance-based assets, contributing to corporate strategy scholarship on alliances and acquisitions.
Our paper argues that the ongoing discussion on coopetition can be enriched by a value chain configuration (VCC) perspective on firm strategy. To this end, we first explain what value chain configuration is and why it is important to understand its configuration (Asgari, Singh, & Mitchell, 2017; Mitchell, 2014). We then highlight under-explored issues in the coopetition literature (Hoffmann, Lavie, Reuer, & Shipilov, 2018) that an understanding of value chain configuration can shed light on. We conclude by outlining inductive approaches of configuration (Harrigan, 1985; Ketchen & Shook, 1996) and recent interest in correlational analysis (Athey & Imbens, 2019)that can help advance studies of coopetition. Our essay is shaped by the fact that SMR seeks to “promote the integration of strategic management research by encouraging research closely connected with the field’s canonical problems as defined by management practice.”1In light of the conceptual and theoretical advancements in Coopetition (Brandenburger & Nalebuff, 2011; Dagnino, 2009) and value chain literature (Alcácer, 2006; Jacobides & Tae, 2015; Porter, 1985), we avoid lengthy ex-post reviews in favor of suggesting how viewing firms from a value chain perspective can generate valuable insights for the coopetition literature. While the essay will be theoretical in tenor, it will mainly refer to the context of the biopharmaceutical industry as an example—biopharmaceutical value chains are characterized by an extensive mix of cooperative and competitive interactions.
Firms with resources that make them attractive allies are also desirable partners for competitors so that competition among partners is embedded in alliance portfolios. We develop a framework in which competition within a portfolio creates benefits for a focal firm but threatens partners, increasing the hazard of alliance termination. We then propose four mechanisms for managing the threat of competition to partners reflecting aspects of portfolio configuration: alliance governance, social cohesion, social structure of competition, and partner similarity. We test our framework using a sample of 204 biopharmaceutical firms with alliance portfolios comprising 1,621 alliances between 1990 and 2000. The study addresses the interplay of competition and cooperation in alliance portfolios, and more generally, key aspects of value chain integration strategy.
We study how technological discontinuities generate first- and second-order effects on alliance formation and termination, leading to reconfiguration of firms' alliance portfolios. Following technological shocks, we argue that firms often seek alliances that provide new resources while also having incentives to form alliances for reinforced and challenged resources that complement the new resources. In parallel, alliance terminations, even involving resources otherwise unaffected by the discontinuity, increase due to limits in firms' alliance carrying capacity. We study biopharmaceutical firms between 1990 and 2000, which faced a technological discontinuity in 1995 in the form of combinatorial chemistry and high-throughput screening. We improve understanding of how technological discontinuities affect the value of resources and how firms reconfigure alliance portfolios in response.