Conflict and Co-Operation in Technology-Based Alliances

Abstract

This paper focuses on conflicts of interest faced by technology-based firms which are embedded in an industry network. In the industry situation analysed here, issues have arisen as to how they can innovate effectively when judged from the perspective of their network partners while achieving their own internal objectives of growth and enhancement of innovative capability. The conceptual conclusions derived from the study are assessed for their generalisability to the global context of the oil industry, and to other industries in the United Kingdom (UK) and elsewhere. It is concluded that where a perceived conflict of interest arises in sharing leading edge technology, firms act in ways which are detrmental to the industrial network as a whole and, ultimately, to the technology leader firm itself. In order to maximise the returns to the technology-based firm, it must (i) select the group of clients/suppliers and portfolio of projects which offer the best spectrum of complementary resources in the light of its growth strategy; and (ii) structure its set of relationships to minimise the perceived risk to its competitive position. Thus, it must identify how to select, win and manage a portfolio of appropriately worded contracts, which collectively minimise its own and its multiple partners' conflicts of interest while ensuring that the required complementary resources will be forthcoming for current and future projects.