Trans-specialization understanding in international technology alliances: The influence of cultural distance

Yong Kyu Lew,Zaheer Khan,Rudolf R Sinkovics,Mo Yamin

doi:10.1057/jibs.2016.10

Abstract

In the information age, the firm’s performance hinges on combining partners’ specialist knowledge to achieve value co-creation. Combining knowledge from different specialties could be a costly process in the international technology alliances (ITAs) context. We argue that the combination of different specializations requires the development of “trans-specialization understanding” (TSU) instead of the internalization of partners’ specialist knowledge. This article examines the extent to which inter-firm governance in ITAs shapes TSU, and whether the development of TSU is endangered by cultural distance. We hypothesize that relational governance, product modularity, and cultural distance influence TSU development, which in turn influences firm performance. We collected data from 110 non-equity ITAs between software and hardware firms participating in the mobile device sector. We analyzed the data using partial least squares path modeling. Our findings suggest that TSU largely depends on product modularity and relational governance in alliances. However, while cultural distance negatively moderates the path from relational governance to TSU, it has no effect on the relationship between product modularity and TSU. Based on this, we conclude that product modularity can substitute for relational governance when strong relational norms are not well-developed in international alliances. Thus cultural distance does not invariably amount to a liability in ITAs.

Highlights

The emergence of international inter-firm innovation networks associated with cross-border innovation activities of firms has been one of the defining features of the global economy during the past several decades
trans-specialization understanding” (TSU) has been conceptualized as a limited degree of knowledge sharing, as islands of shared knowledge in a sea of mutual ignorance (Postrel, 2002), the development of which is underpinned by a level of managerial “meta-knowledge” that is akin to the concept of “combinative capability” (Kogut & Zander, 1992), which itself has proved highly influential in international business (IB) thinking (Tallman, 2003)
Given the paucity of research on inter-firm governance and TSU in IB, we engaged in an exploratory process of theoretical development using variancebased partial least squares (PLS) soft modeling rather than covariance-based theory confirmation (Henseler, Ringle, & Sinkovics, 2009; Lohmöller, 1989)

Summary

Introduction

The emergence of international inter-firm innovation networks associated with cross-border innovation activities of firms has been one of the defining features of the global economy during the past several decades. Within the international business (IB) discipline, these developments are reflected in a new conceptualization of the multinational corporation (MNC), emphasizing the capability perspectives, and highlighting the notion of cross-border value “co-creation” (Pitelis & Teece, 2010; Teece, 2014) and emerging MNC roles as “orchestrators” of the wider global value creation processes (Pitelis & Teece, 2010). The extant literature has not addressed the question of how different specializations can be combined effectively in a cross-border setting or, in particular, whether cultural distance may undermine the effectiveness of knowledge combination in such contexts. This article focuses on the above question in the context of international technology alliances (ITAs), wherein performance hinges on partners combining their highly specialist knowledge for a specific and jointly valued purpose. TSU has been conceptualized as a limited degree of knowledge sharing, as islands of shared knowledge in a sea of mutual ignorance (Postrel, 2002), the development of which is underpinned by a level of managerial “meta-knowledge” that is akin to the concept of “combinative capability” (Kogut & Zander, 1992), which itself has proved highly influential in IB thinking (Tallman, 2003)

Methods

Results

Conclusion