Abstract
This paper focuses on the strategic context of the K‐engine innovation at Rover Group. The argument is that during the 1960s and 1970s, British Leyland's attempt to establish engineering and development capabilities was undermined by a lack of financial commitment by top management, and numerous occasions of corporate reorganisation. Later, the strategic alliance with Honda provided an opportunity for Rover's corporate rejuvenation, and was part of a clearer top management focus on how to bring new products to the market. The strategic alliance also gave Rover the chance to gain crucial organisational competencies and know‐how from this joint venture. This is in contrast to previous European‐Japanese joint ventures, which often saw the Japanese partner on the receiving end of know‐how transfer.
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