Search results

In the network strategy view, relative competitive advantage stems not merely from opportunity structures embedded in networks but also from the distribution of ability and motivation among firms. Thus, there is a need to “bring the firm back in” to the network strategy narrative. We demonstrate that a mixed-methods design, blending large-sample data with micro-data on specific firms and their networks, can increase our understanding of the interplay of network structure and actor mechanisms, thus bridging the chasm between theory and practice in network strategy. We believe this is a critical step toward the “strategic design of networks.”

This paper studies the moderating effect of industry structure on strategy-performance relationships in international markets.

We have carried out a survey among a sample of German, Norwegian and Singaporean small and medium sized firms, and test – using structural equation modelling (EQS) – four hypotheses founded in industrial organisation,

We find that industry structure indeed matters. The general picture is that cautious internationalisation strategies are more effective in fragmented industries than in concentrated industries. Also, with somewhat more nuance, global marketing strategies – such as standardisation and integration – seem by and large to be more effective in concentrated industries than in fragmented industries.

The operationalisation of industry structure in an international context is challenging and we have deviated from the traditional Herfindahl–Hirschman Index. This may be a limitation but we also consider it a strength, given the weaknesses of this index in an international setting. The study is cross-sectional and should ideally follow each firm over time, again a challenging endeavour.

Despite a considerable amount of studies on strategy – performance relationships in international markets, there is no general agreement on the topic. We argue that a contingency approach needs to be taken, and that industry structure is one important factor not yet analysed.

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

With the disaggregation and fine-slicing of global value chains, offshoring and outsourcing has become increasingly relevant for many MNEs. The purpose of this chapter is to understand the value creation of the receiving partner of outsourcing activities. This is a firm that will have many outsourcing alliances with partners, and one perspective to frame these alliances is the alliance portfolio perspective. We ask – how can a firm on the receiving end of outsourcing create value through the management of its alliance portfolio?

Through a case study of a company supplying products to manufacturing industries, we investigate ways in which the company adds value for customers through different models of customer integration. Applying an alliance portfolio perspective, we study benefits of grouping alliances with customers and suppliers.

Whereas most studies of alliance portfolios have focused on value creation within a portfolio, we find that the mediating capability of coordinating between groups or portfolios of alliances is critical. We also see that the risk aspect is important for firms receiving outsourcing activities.

Our findings have implications for the strategy and organization of the mediating firm on the receiving end of outsourcing. We have only data from one firm, and therefore our findings need to be tested further.

Our findings have implications for managers organizing large alliance portfolios to include risk and mediation capabilities.

The chapter uses original in-depth data.

In this chapter, we make the argument that science-based firms in the life sciences are expected to actively expand the volume and scope of collaborations, and broaden the kinds of partners with whom they collaborate, as they grow larger, older, and become successful. We base our arguments on a general process of organizational learning in which organizations with diverse ties are exposed to a broader stock of knowledge, heterogeneity in the portfolio of collaborators facilitates innovation, and repeat contracting enables organizations to deepen their protocols for the exchange of information and resources. We draw from these ideas the conclusion that interfirm collaboration is not a transitional stage, or stepping stone, to success or maturity, but a significant organizational practice in technologically advanced fields. Extending this argument, we suggest this strategy of interfirm collaboration represents neither dependency nor specialization but an alternative way of accessing knowledge and resources.

Strategic Alliances (SAs) have become widely used by global businesses for pursuing strategic goals.¹ Because of the special nuances that can make these kinds of joint ventures (JVs) effective means for achieving challenging strategic goals, they are generally more difficult to establish and manage. Some of the larger, more successful users of SAs recognize the special nature of these relationships and some such as Cisco and Pfizer have even created high-level divisions or departments in their organization explicitly focused on planning, pursuing, and managing outside strategic partnerships. These units not only monitor the alliances (in some cases, dozens at a time) but also develop tools and insights that will allow the organization to engage in SA more successfully.

Carlos Ghosn, ex-chairman and CEO of Nissan and Renault, once admired as a role model of a global leader, was jailed in November 2018. This chapter examines why Nissan senior executives took the controversial step of reporting Ghosn’s alleged behavior to the Prosecutor’s office, knowing it would send him to jail, rather than manage the situation internally. Clearly, the trust that Ghosn had built during the Nissan revival was no longer alive. We describe three phases across two decades of Ghosn’s leadership in Nissan. In each phase we analyze the relationship between Ghosn’s behavior and the business outcomes, on the one hand, and Ghosn’s relationship with the senior leaders at Nissan, on the other hand. Ghosn built trust with Nissan leaders in Phase I through his skillful global leadership and positive social processes. The trust was reinforced on its own momentum through Phase II. Starting with Phase III, mistakes in managing social dynamics became evident: Ghosn did not adjust his social relationships at Nissan, following changes in the environment and the organization. He became disconnected from the Nissan senior executives and employees, who eventually blew the whistle on his behaviors. Ironically, it seems that many of the factors that led to Ghosn’s success at Nissan turned into factors which led to his downfall. Ghosn’s case tells us that the virtuous circle of leadership can sometimes spiral so far that it is taken for granted. Neglecting to tend this virtuous circle can unravel it.

Over the past years, unprecedented attention has been paid to alliance management in the academic and management literature. However, failure rates of alliances have remained very high. Nonetheless, research efforts have shown that alliance management can be significantly enhanced by prior alliance experience. Consequently, it has become important for firms to understand how to make use of their alliance experience and how to develop alliance capabilities. On the basis of a global survey among alliance managers, this study aims to reveal recent trends in alliance capability building and tries to uncover novel ways in which firms try to enhance their alliance performance.