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Building on the complementarity nature of extant dyadic and portfolio level alliance research, this paper discusses the role of alliance capability and relational quality as antecedents of alliance performance. Although prior research focused extensively on the influence of dyadic issues on alliance performance, more recent studies focus on firm-level capabilities to manage sets of alliances. We specify an integrated framework that merges these two previously separated streams of research and discuss how firm-level alliance capabilities affect dyadic level relational quality. The framework suggests that relational quality mediates between both alliance capability and alliance performance and provides a detailed discussion on how firm-level mechanisms improve the quality of dyadic relationships. We also discuss implications and options for future research.

In this chapter, we empirically investigate an important question of “how does knowledge sharing and knowledge leakage impact the alliance performance in dyadic coopetitive alliance settings that involve small- and medium-sized enterprises (SMEs).” Taking the perspective of the focal SME to address this question, we posit that while knowledge sharing positively associates with alliance performance, inadvertent knowledge leakage is negatively related to performance. We further postulate that under the conditions of high knowledge leakage, the positive impacts of knowledge sharing on performance would be reduced. Our structural model results based on a survey of 186 SMEs in the high-tech and knowledge-intensive industries in Sweden show support for two of the hypothesized relationships. More specifically, the results show that knowledge sharing has a positive effect on alliance performance but knowledge leakage has an insignificant direct effect on performance. However, knowledge leakage plays a negative moderating role on the relationship between knowledge sharing and performance. We contribute by demonstrating the effects of knowledge sharing and leakage in under-researched but important dyadic one-to-one coopetitive alliances involving SMEs.

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.

To maintain and enhance innovation performance, many firms nowadays look for resources from external sources such as strategic alliances and regional network embeddedness. While considering the important interdependencies among different alliances, research has established an alliance portfolio perspective. From an alliance portfolio perspective, firms can consciously configure the dimensions of their alliance portfolios such as partner characteristics, relational properties, or structural properties. However, within the context of alliance portfolio configuration, the role of regional networks has been largely overlooked. As most high-tech firms are regionally clustered, this is an important research gap. In addressing this gap, this study explores the link between regional network density, alliance portfolio configuration, and its contribution to firm innovation performance. We examine how regional network density and alliance partner diversity influences firm level innovation output. We also investigate the moderating effect of overall network partner status and partner diversity on the link between regional network density and innovation performance. Our empirical evidence is derived from a longitudinal quantitative study of 1,233 German biotechnology firms. We find that regional network density and alliance partner diversity has an inverted U-shape effect on firm level innovation performance. However, overall network status as well as alliance partner diversity negatively moderates the link between regional network density and innovation output. Thus, our study contributes to a better understanding of the link between regional networks, alliance portfolio configuration, and firm level innovation performance.

In this chapter, we have presented four case studies of the firms which are operating in the medium complete adapting countries. The four cases are Arvidsson Textile Share Company in Estonia, Partec Rockwool in Lithuania, Accel Share Company in Lithuania and Ragn-Sells in Estonia. The case studies are prepared following the structure of the theoretical framework applied in this book. We have found out that the performance of Arvidsson Textile Share Company is successful as it matches the expectations if the partners and it has remained to be more or less the same since its establishment. The performance of Partec Rockwool was also successful from the very beginning until it was replaced by the fully owned firm. Accel Share Company's operations in Lithuania was successful from the very beginning as it found the right people with the right competence in the local market. In the case of Ragn-Sells in Estonia, the alliance was successful but not up to the full expectation.

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.

We examine the benefits for firms participating in collaborations funded via minority equity placements. Selling firms, on average, realize significant increases in share value – strongly correlated with the size of the equity stake, its beta, and the relatedness of the two firms (by industry). Shares of purchasing firms, though, show neutral responses on average (but positive response for R&D intensive alliances). Further, purchasing firms have better financial performance than their industry peers in the years surrounding the announcement (suggesting, unlike joint ventures, that poor performance is not their motivation). Selling firms, however, may be motivated by poor operating performance.

Different forms of inter-organisational encounters, including joint ventures, alliances, mergers and acquisitions, have over the last decades become fashionable and much-sought means of globalisation. A continuous concern shared by managers involved in these different forms of inter-organisational encounters is the challenge of making them work in practice – their successful implementation and management. The cultural dimensions of these different kinds of inter-organisational encounters, particularly in cross-border contexts, have been deplored as being particularly difficult. This paper builds on prior research and aims to understand how the cultural dimensions of inter-organisational encounters have been approached by researchers on mergers and acquisitions on the one hand and researchers on alliances and joint ventures on the other hand. Based on a comparative literature review, the findings suggest that the two fields, despite their valuable contributions and the similarities in the phenomena they study, have remained surprisingly isolated from one another and would offer opportunities for cross-fertilisation. Through its theoretical contribution, the paper intends to offer insights to researchers in both streams of research.

This chapter highlights and examines the journey of strategic alliances, how alliances lead to the creation of new alliances, and whether alliances succeed or precede firms' market networks. Moreover, the chapter attempts to identify the market and environmental factors which impact the journey and the end result of alliances. The findings show that before the alliance and in the early strategic alliance phase, firms can have direct and indirect relationships/networks which can lead to the formation of strategic alliances. The other finding is that one of the main factors which determines the journey of strategic alliances is the degree of internationalization of the firm and the market. The journey of alliances was also found to be different in the various groups of Eastern and Central Europe (ECE) countries depending on the pace or degree of adaptation of those countries. It was also found that well-developed networks have a positive impact on the alliance results. Moreover, the chapter also provides evidence that alliances enable firms to defend and strengthen existing networks to build new networks and to penetrate partners' networks. It is finally observed that it is difficult to determine whether alliances succeed or precede networks.

Although primarily treated as two distinct research streams, strategic alliances and mergers and acquisitions together occupy much of the strategic management discourse. Alliances, in many cases, end in acquisitions as firms use alliances as intermediate strategic options to eventually acquire a partner. As the discipline of strategy matures and the frequency and the volume of inter-firm cooperation continue to rise, it is imperative to integrate these two research streams for a holistic understanding of the theory of the firm. The purpose of this conceptual piece is threefold. First, we review the extant studies that combine these two governance modes: alliance and acquisitions. Second, drawing on the dominant strategic management theories, we highlight how prior inter-firm alliances inform future acquisitions in terms of (a) pre-combination decisions, (b) post-deal integration processes, (c) alternatives and strategies, and (d) performance outcomes. Finally, in view of the emerging trends and evocative gaps, we offer a conceptual road map to encourage future theoretical development and empirical research.