Innovating through alliances: expectations and limitations

Abstract

AbstractIn this paper we have analysed the innovation processes occurring in several cross‐industry technology partnerships in order to suggest some key managerial issues pertaining to the effectiveness of these increasingly popular initiatives. Our general proposition, based on an extensive literature review and clinical research, is that the managerial hurdles in partnerships frequently offset, and in some cases eliminate, the expected innovation advantages. We submit that there is a fundamental tension between the dynamics of innovation and the logic of partnering. The extent of the tension, however, depends on the nature of the innovation project and on the characteristics of the partnership. Thus we recommend that managers involved in the formation of joint‐R&D agreements should carry out an innovation‐partnering assessment to design an appropriate management structure that would minimise the ‘tension’. Lastly, we suggest some ingredients for carrying out such an assessment, and directions for further research.Alliances seem to be today's answer to most management challenges. As recent surveys show, companies all over the world are forming partnerships to alleviate difficulties met in nearly every business activity —design, manufacturing, distribution, service… (e.g. Hergert & Morris, 1987; Urban, 1989), The popularity of such strategic initiatives in the 1980's has led to a dramatic increase in the number as well as in the forms of alliances (Hagedoorn and Schakenraad, 1990).