Alliance Portfolio Research Articles

Original Innovation through Inter-Organizational Collaboration: Empirical Evidence from University-Focused Alliance Portfolio in China

A university-focused alliance portfolio is a manifestation of industry–university–research cooperation and has become an important path to realize original innovation in science and technology. Unlike traditional technological innovation, original innovation particularly emphasizes new ideas and research areas never covered before. This paper integrates resource-based theory, alliance portfolio theory, and innovation theory, and aims to scientifically establish an evaluation index system of original innovation performance from the three dimensions of initiate research, technology breakthrough, and research breakthrough. The work explores how a university can select partners to realize collaborative innovation in the context of inter-organizational scientific research cooperation with multiple innovation subjects for nationwide research institutes and universities in mainland China. The empirical results show that resource complementarity has a significant positive effect on innovation performance. Three typical universities in the “2011 project” are selected as post-interview cases for enriching empirical evidence. This study contributes to original innovation literature by introducing the concept of resource complementarity in a university-focused alliance portfolio, and further provides implications for original and science-driven innovation studies and suggests directions for university and research institutes.

National depth and R&D alliance portfolio international expansion: The moderation of technological discontinuity and long-term orientation

Numerous studies have reported the positive outcomes of an expanded international R&D alliance portfolio, yet very few investigate what drives its international expansion. This study fills the gap by developing a three-dimensional frame that demonstrates the national depth of prior alliance portfolio (ND), technological discontinuity (TD), and long-term orientation (LTO) to understand antecedents further. First, this study examines the role of ND by illustrating its trust mechanism derived from transaction cost economies and the learning mechanism based on organizational learning theory. Second, it investigates TD'S moderation role by explaining how it mitigates trust and learning mechanisms of ND from the resource-based view. Third, it explores LTO's three-way moderation role by elaborating on how it impacts decision-making. It develops novel quantitative measures and conducts empirical analysis using multi-source matching data of 106 firms spanning 11 years (2006−2016). Results show that national depth negatively impacts R&D alliance portfolio international expansion. High technological discontinuity weakens the negative impacting strength of national depth. High long-term orientation weakens the moderation strength of technological discontinuity.

University-industry collaboration portfolio concentration and focal firms’ innovation performance: evidence from China

ABSTRACT It has been a pervasive phenomenon that a firm constructs multiple collaborations with universities and research institutes from diverse geographic regions. This study examines whether and under what conditions university-industry (UI) collaboration portfolio concentration, the geographical concentration of UI collaboration partners, influence focal firms’ innovation performance. The results suggest that UI collaboration portfolio concentration is negatively associated with focal firms’ innovation performance. Besides, the negative relationship between UI collaboration portfolio concentration and firm innovation performance is stronger for state-owned enterprises (SOEs) than non-SOEs. Moreover, the negative relationship between UI collaboration portfolio concentration and firm innovation performance is stronger for politically connected firms than non-politically connected firms. This study contributes to previous research on alliance portfolios and UI collaborations, and provides some meaningful inspiration for practice.

Business Innovations and Interorganizational Relationships In the Hospitality Industry: Does Partner Diversity Matter?

Innovation is a potential source of differentiation and competitive advantage for the hospitality industry. However, the dynamism of the environment forces hotel operators to establish multiple and simultaneous interorganizational relations—portfolio of alliances—in order to provide the accommodation service and develop innovation activities while being efficient, aimed at remaining competitive in dynamic contexts. The benefits obtained, considering the set of relationships from a global perspective, are superior to those addressing alliances from an individual point of view. Bearing this in mind, this study empirically tests how the diversity among the agent's attributes—resources and cognitive schemes—within the portfolio of alliance can affect the introduction of business innovations. It is also analyzed whether the previous experience in collaboration of the hotel firm moderates this relationship. The results reveal that hotel companies must design their partner configuration according to the type of innovation to be introduced, focusing mainly on areas such as service and marketing.

Open Innovation: How Is the Search for Innovation Affected by Alliance Portfolio Diversity?

The relationship between the alliance portfolio diversity and the search for innovation is explored based on resource view in open innovation. Three elements of the alliance portfolio diversity—industry, organizational, and national diversity—are theorized to affect the result of the search for innovation. The hypothesis are tested by using regressions analysis method with the date collected from 550 new generation of information technology companies in Chengdu Tianfu Software Zone and Wuxi (Taihu) International Technology Zone. The results show that the alliance portfolio diversity has a significant positive effect on innovative search quality. We also find that, the organizational diversity has no impact on innovative search speed. Conclusions is expected to provide inspiration to the enterprise, which are integrating resources to achieve break through innovation bottleneck and technological upgrading.

Do Alliance portfolios encourage or impede new business practice adoption? Theory and evidence from the private equity industry

AbstractResearch SummaryWe show that the existing alliance portfolio of a firm can impede the adoption of a new business practice. We analyze the private equity industry which features alliances in the form of deal syndication and has recently seen the rise of a novel investment practice: add‐on deals. Using algorithm‐supported induction, we first document robust empirical patterns using machine learning techniques, and then test the theory we construct to explain these patterns using standard econometric methods in a hold‐out sample. We find that when the capabilities required for the new business practice require new partners, existing alliance portfolio members who support current practices can impede access to these new partners (and hence the adoption of the new business practice) through capacity constraints and inter‐partner rivalry.Managerial SummaryAlliance partners play a valuable role in many industries, and particularly in the PE industry as syndication partners. While the benefits of working with such partners are well understood, we uncover a potential weakness that alliance portfolio managers should be aware of. If a new business practice relies substantially on a new type of alliance partner, the existing alliance portfolio may impede access to this partner, thus impeding the adoption of the new practice. For PE fund managers, in particular, this implies balancing their deal syndication strategy with the development of new relationships with corporate partners to adopt add‐on models to complement the traditional LBOs. We also show how to use machine learning techniques to uncover patterns of strategic interest in past transaction data.

Research on the Origin and Composition of Alliance Portfolio Management Ability

With the increase in innovation risk and the acceleration of technological iterations, a single bilateral alliance cannot meet the needs of corporate innovation activities. More and more companies have established multiple alliance relationships with cross-regional and cross-industry external organizations at the same time. However, most companies are still unable to systematically manage alliance portfolios from a holistic perspective, and usually only focus on conflicts and competitive behaviors between alliances. If an enterprise wants to build a high-performance alliance portfolio, it must have the ability to develop and manage several external alliance relationships, that is, the ability to manage alliance portfolios. Based on the combing and analysis of related research results, the origin and connotation of alliance portfolio management capabilities are systematically analyzed, providing a new perspective for innovation management research in alliance portfolios.

Influences of university-industry alliance portfolio depth and breadth on growth of new technology-based firms: Evidence from China

In emerging economies, new technology-based firms (NTBFs) often engage in multiple alliances with universities and research institutes simultaneously to access external knowledge and resources crucial for their survival and growth, thus forming university-industry alliance portfolios (UIAPs). However, little scholarly attention has been paid to this phenomenon. Using panel data of 549 firm-year observations from 149 manufacturing NTBFs listed on Chinese Growth Enterprises Market (GEM) Board, we develop a set of multi-level fixed-effect liner regression models to investigate effects of UIAP relational-dimension configurations on NTBF growth along with the moderating effects of government subsidies. Results reveal negative effects of UIAP depth on firm growth and positive impacts of UIAP breadth on firm growth. Furthermore, results show that government subsidies weaken the negative relationship between UIAP depth and NTBF growth, along with the positive relationship between UIAP breadth and NTBF growth. Contributing to previous research on alliance portfolios, university-industry collaborations, and firm growth, this study provides some practical implications for both industry practitioners and policymakers in emerging economies.

Repeated partnerships in university‐industry collaboration portfolios and firm innovation performance: roles of absorptive capacity and political connections

There is little empirical evidence on the relationship between repeated partnerships and firm innovation performance in the university‐industry collaboration (UIC) portfolio context. This study investigates how repeated partnerships in UIC portfolios influence focal firms’ innovation performance. Using a panel dataset of 768 UIC portfolios in the Chinese manufacturing industry, we theorize and reveal that repeated partnerships in UIC portfolios exert a negative effect on firm innovation performance. Besides, UIC portfolio repeated partnerships have a positive effect on absorptive capacity and that absorptive capacity partially mediates the relationship between UIC portfolio repeated partnerships and firm innovation performance, and political connections strengthen this relationship. These findings contribute to previous research on repeated partnerships and alliance portfolios, and provide practical implications for both firm managers and policymakers.

Alliance Portfolio Diversity as a Lever of Product Innovation

Alliance Portfolio Diversity as a Lever of Product Innovation

Is control still an important managerial function? An examination of structural and control process factors in strategic alliances

Abstract In this paper we aimed to find an answer to the question: is control still important for modern organization in order to favor achievement of superior performances? We have tried to find answer to this question through an empirical investigation in the field of strategic alliances. Thus, we have analyzed the relationship between alliance monitorization and control and various measures of alliance performances. Based on a statistical analysis of data provided by 46 best performers medium and large companies operating in Romania, we found that control is still important for superior performances, whether productivity (e.g. revenues growth) or innovation related performances (e.g. new product development). We used multiple multilinear regressions and found positive associations between alliance monitorization and control, structural control factors and productivity, respectively innovation related performances. Surprisingly, we found that control process factors are not associated with superior innovation performances and for productivity related performances there is only a low intensity association. In terms of explanatory potential of regression models, in five models out of six, the control factors significantly explained why some companies extracted higher value from their portfolio of strategic alliances, as compared to companies extracting more modest value. The various measures of alliance performances (revenues growth, competitive position, customer satisfaction, operations improvement, product improvement, new product development) were also separately investigated.

Enhancing sustainable supply chain management performance through alliance portfolio diversity: the mediating effect of sustainability collaboration

PurposeWhile strategic alliances is a concept increasingly discussed in the field of sustainable supply chain management (SSCM), an emerging and more crucial concept regarding alliances—namely, the alliance portfolio—is mostly ignored in the SSCM context. Mainly drawing on the categorisation–elaboration model (CEM), this research develops a three-layer model to explore the effects of three alliance portfolio diversity facets on the three triple-bottom-line SSCM performances through the mediation of sustainability collaboration.Design/methodology/approachThe field data are collected from 321 Vietnamese manufacturers. Scale accuracy is assessed through the confirmatory factor analysis method. Hierarchical linear regressions are applied to test the proposed model and hypotheses.FindingsPartner, governance, and functional alliance portfolio diversities have a U-shaped, inverted U-shaped, and positive linear effect, respectively, on sustainability collaboration. Sustainability collaboration is in turn found to enhance the SSCM performances in terms of economic, environmental, and social.Originality/valueThis research introduced a new theoretical lens, CEM, to the SSCM field. It also provided findings that can help firms to manage their alliance portfolios more dynamically in terms of the nature and diversity level of the portfolio and in a way that adds to the triple bottom line through the mediating effect of sustainability collaboration.

The role of alliance portfolio diversity on firm innovation and performance: the case of Colombia

ABSTRACT This research aimed to understand the direct influence of a firm's alliance portfolio diversity on its product and process innovation performance and the indirect influence of the former on financial performance, mediated by innovation performance. To reach this goal, we proposed a model based on alliance portfolios and absorptive capacity theories and tested it in a sample of 806 Colombian manufacturing firms with structural equation modeling. The results supported the hypothesis that alliance portfolio diversity has a direct influence on product and process innovation and an indirect impact on financial performance. Product innovation, as expected, mediated this indirect relationship. On the other hand, process innovation did not. Another interesting finding was that, for high levels of absorptive capacity, the positive influence of diversity on innovation performance was more intense. This study contributes by extending the research of alliance portfolios in the innovation management field by understanding their phenomena under an emerging economy context.

How Do Alliance Portfolio Factors Affect a Precision Medicine Firm’s Innovation Performance?

Precision medicine is an approach to disease treatment and prevention that seeks to maximize effectiveness by taking into account individual variability in genes, environment, and lifestyle. The medical paradigm has been changed with the emergence of precision medicine and many companies with business related to precision medicine should cooperate with other companies. The purpose of this study is to analyze the alliance portfolio factors that affect firms’ innovation performance. This study examined whether the diversity factors of the alliance portfolio and alliance management capability influenced its innovation performance. Additionally, we investigated the moderate effects of participation of research organizations in the alliance portfolio. As a result, there was an inverted U-shaped relationship between the industry diversity of the portfolio and innovation performance; therefore, the participation of research organizations in the alliance portfolio showed a positive effect. Additionally, the value governance diversity changed to have a positive effect by interacting with research organizations. This study provides information on the alliance portfolio factors that affect the innovation performance of precision medicine companies.

Whether and when do alliance terminations pay off?

Engaging in multiple strategic alliances, a firm forms an alliance portfolio. While a larger alliance portfolio signals investors a firm's ability to exploit new opportunities and improve financial performance, having multiple alliances may also undermine financial performance due to a firm's limited ability to effectively manage these alliances. Announcing an alliance termination, a firm signals an intention to increase the effectiveness of a larger alliance portfolio. This article examines the extent to which alliance termination announcements create value for firms with multiple alliances. Building on the resource-based view of the firm and organizational learning literature, the paper hypothesizes a U-shaped relationship between alliance portfolio size and a firm's cumulative abnormal stock return following an alliance termination announcement. This effect is moderated by the amount of a firm's alternative resources and partner-specific experience that affect its ability to effectively manage multiple alliances. The results show that alliance termination announcements create firm value when an alliance portfolio is large.

Functional diversity of alliance portfolio and corporate social responsibility

This paper seeks to bridge them by exploring the impact of a firm’s alliance portfolio on its CSR. Drawing from the organizational learning lens, we propose that alliance portfolio represents an important source of knowledge and insights that are necessary for a firm to adopt and implement various CSR practices. As the functional diversity of a firm’s alliance portfolio increases, it can gain more distinctive CSR-related knowledge, and its CSR performance will reasonably increase. Further, we propose that the learning from alliance portfolio demonstrates an incremental nature and is contingent upon the governance structure of a firm’s alliances. The empirical findings in the sample of 521 public firms in China strongly support the positive linkage between functional diversity of alliance portfolio and CSR. The findings also reveal that this relationship weakens for firms with more prior alliances and a higher reputation – two variables we employ to indicate the incremental effects of learning from alliance portfolio. And the relationship becomes stronger as a firm’s portfolio includes more equity-based alliances.

Value of Alliance Portfolio Reconfiguration During Industry Change Evidence from Automobile Industry

During industry change, firms usually update their resources by reconfiguring alliance portfolio. Firms not only hold existing network resources accessed through its current alliance portfolio, but also acquire new network resources accessed through a newly formed alliance. In this research, we move beyond the collection of dyadic relationships of individual alliances and examine more holistically the mutual dependences of existing and new resources during alliance portfolio reconfiguration, with a focus on the effect of the structural characteristics of the firms’ alliance portfolio on firm value. Using strategic alliances of 34 firms in the global automobile industry in the period 2009–2018, we combine textual analysis with event studies conducted on stock market returns. By separating a firm’s ego alliance network of existing resources into core(technology) resource network and complementary(marketing) resource network, our results show that firms’ embeddedness (reflected by network cohesion) in existing core resource network is negatively associated with the value of new alliance for challenged new resource, while embeddedness in existing complementary resource network is positively associated with the value of new alliance for reinforced new resource. Our study contributes to a better understanding of the alliance portfolio reconfiguration, its structures, and market return consequences in the era of industry change.

Alliance choices: A Behavioral Theory of Problemistic and Slack Searches under CEO Overconfidence

How do firms configure exploration versus exploitation in alliance portfolios when facing behavioral heuristics? Based on the behavioral perspective, this study uses problemistic and slack searches as the behavioral explanation for exploration versus exploitation configurations in alliance portfolios. Simutaneously, it takes into account the moderating role of CEO overconfidence by considering the influence of decision makers' subjective interpretations on performance feedback and slack, during the decision-making process. It employed a feasible generalized least squares approach to regression to empirically test the model using data of 224 publicly traded firms in the United States (U.S.) comprising high-tech industries. The findings show that both, below-aspiration performance and absorbed slack, play positive roles in focusing attention on exploration rather than exploitation alliances. The results also show that CEO overconfidence intensifies the positive roles of below-aspiration performance and absorbed slack in the exploration alliance choice. This study contributes to extant literature by extending the behavioral theory to the choices of exploration versus exploitation in alliance portfolio configurations, and filling the limited attention on managers' subjective interpretation of behavioral drivers as boundary conditions in behavioral research.

The Effects of Alliance on Foreign IPO Firms’ Survivability in the United States

The purpose of this paper is to understand how foreign firms’ alliances and the characteristics of those alliances (ties to a host country and alliance portfolio diversity) influence firms’ survivability. Using data from 162 foreign firms that made IPOs in the U.S. financial market between 2000 and 2008, this study investigates how number of alliances, alliances with US firms, and alliance portfolio diversity post-IPO influenced the foreign the firms’ long-term survivability. Relying on the resource-based view, we hypothesized that number of alliances and alliances with US firms would have positive impact on survivability and that alliance portfolio diversity would have an inverse U-shaped relationship with survivability. The study finds that a greater number of alliances post-IPO has a positive impact on firm survivability, but ties with US firms do not have significant effect. Contrary to our expectation, the relationship between alliance portfolio diversity and survivability is U-shaped (not inverted). A moderately diverse alliance portfolio diminishes a firm’s survivability, but a high level of alliance portfolio diversity has a positive impact on the firm’s survivability. To the best of our knowledge, this is the first study to investigate the relationship between the alliances of foreign firms and survivability post-IPO. This study sheds new light on the implications of alliance building by foreign firms.

CEO Career Variety As Behavioral Antecedent Of Organizations' Strategic Alliance Portfolios

This study takes a behavioral perspective on the antecedents of strategic alliances. Considering the impact of CEOs on their organization’s strategic choices and behaviors, career variety and its motives pose a particularly influential and interesting executive characteristic. By analyzing a multiyear sample of the S&P 500 companies, this study offers two main contributions to management research: 1. The study connects TMT research with strategic management research to reveal a TMT-based antecedent of a firm’s composition of strategic alliance portfolios. 2. We introduce a novel concept to analyze and understand the influence of career variety as an observable characteristic. Results propose that while the alliance portfolio size increases with an increasing level of career variety of a CEO, mid-ranged executives are most capable of creating a balanced and ambidextrous strategic alliance portfolio as well as a healthy mix of competitive and non-competitive partnerships. These results contradict current market mechanisms revealed by previous studies, which point to an increasing market value of CEOs with greater career diversity.