Partner Firms Research Articles

Relational dynamics in information technology outsourcing: An integrative review and future research directions

AbstractThis paper reviews the literature on relational dynamics in information technology outsourcing (ITO) relationships, a type of interorganizational relationship (IOR) between client and vendor firms that can vary considerably in complexity. While relational dynamics are understood to reflect changes in an IOR ex‐post contract which can substantially influence relationship performance and development, prior IOR research is limited in its conceptualization. The extensive ITO literature offers fertile ground for exploring this limitation but has advanced different conceptualizations and is fragmented in empirical findings, which warrants a systematic assessment. We conduct an integrative review of 127 peer‐reviewed empirical studies to enhance our understanding of the constituents of relational dynamics. The findings reveal that relational dynamics involve the occurrence and management of tensions within and across four relationship development stages (transactional, strategic, transformational, and termination). For each stage and between stages, we identify the main tension, the firms’ strategies to manage the tension, and the outcomes. Based on these findings, we develop an integrative framework that offers a comprehensive and multifaceted conceptualization of relational dynamics, revealing that as ITO arrangements progress (or regress), partner firms are confronted with structural and transitional tensions inherent in relationship stability and instability. Based on this framework, we offer future directions for developing a more comprehensive understanding of relational dynamics in ITO and, more broadly, IORs.

Innovation beyond firm boundaries: Strategic alliances and corporate innovation

In this paper, we empirically analyze how strategic alliances affect the innovation output of the firms forming the alliance. We find a positive effect of R&D-related strategic alliances on corporate innovation, as measured by the quantity and quality of patents filed. This effect is stronger for firms led by CEOs with higher general managerial skills, firms with greater experience from earlier alliances, and firms operating in R&D-intensive industries. Furthermore, the innovation-fostering effect of strategic alliances is more pronounced if alliance partnering firms share a common institutional blockholder or have a higher degree of technological proximity. We also document, for the first time in the literature, a unique contractual mechanism through which firms share the benefits of innovation with their alliance partners, namely, “co-patenting.”

The Impact of Network Centrality on Related and Unrelated Knowledge Transfers in Alliances

The formation of R&D alliances is a viable option for firms to supplement their in-house R&D and share the costs and risks inherent in innovations. Strategic R&D alliances promote knowledge transfers in alliance-related areas (intended knowledge transfers) that serve the common scope of the alliance, while also leading to spillovers of knowledge in alliance-unrelated areas, outside the scope of the alliance (unintended knowledge transfers). This paper looks at the social network of the partnering firms, in particular, network centrality which reveals the firm’s position and status in its network. By partnering with other firms, firms can extend their access to resources and information, so the number of partners they have (the centrality of the firm) becomes important. We argue that network centrality promotes cooperation and thus increases the intended knowledge transfer. Furthermore, network centrality also predicts opportunistic behavior in alliances, reducing the transfer of unintended knowledge. The results support the predictions made.

National innovation policies and knowledge acquisition in international alliances

AbstractResearch summaryInternational alliances facilitate learning among firms by providing access to knowledge embedded in different countries, yet we do not know how the partnering firms' distinct national contexts shape their learning in alliances. This study brings together research on learning in alliances and research on national innovation systems to examine how innovation policies in the respective home countries of the focal firms and their partners can increase the effectiveness of knowledge acquisition in alliances. Our analyses indicate that supply‐side innovation policies in the focal firms' home countries and demand‐side policies in their partners' home countries increase the focal firms' knowledge acquisition from their partners.Managerial summaryFirms engaging in alliances should consider their national innovation system as a strategic resource they can leverage not only to improve their own knowledge sourcing but also to become a more attractive partner in international alliances, potentially opening opportunities for engaging in reciprocal knowledge exchange. Managers can expect more learning opportunities when allying with foreign partners from countries with innovation policies that stimulate public technology purchasing or encourage public–private R&D collaboration. In turn, managers of firms from countries with innovation policies that provide funding and talent for R&D can capitalize on these resources to improve their firms' knowledge acquisition from foreign partners.

Understanding the Paradox in the Results of National Cultural Distance Impact on International Joint Venture Performance: A Narrative Review of Prior Literature

The literature on international joint ventures (IJVs) continues to grow owing to their crucial importance in global market competition. National cultural distance (NCD) between partner firms is conventionally considered one of the main contributors to unsatisfactory IJV performance, leading to its dissolution. Nevertheless, there is no consensus on the extent of the impact of NCD on IJV performance, nor on whether this impact is predominantly positive or negative. Therefore, we conducted a narrative review to shed light on prior research (including the earliest works) to explore and clarify the causes of these apparent inconsistencies in the research’s results. Theoretically, the current research offers guidance for future study on the topic. Researchers should introduce moderator and mediator variables in pursuit of a more nuanced understanding such as mutual trust between partners. Practically, this paper will help IJV managers mitigate the negative effects of NCD and improve overall venture performance by selecting culturally intelligent managers, providing cross-cultural training for IJV staff, and implementing cooperative conflict resolution. Like any study, this paper has some limitations that should be examined by future researchers.

R&D innovation under uncertainty: a framework for empirical investigation of knowledge complementarity and goal congruence

PurposeThis study aims to introduce a new prescriptive model to aid both managers and researchers in partner selection for innovation-orientated collaboration. This framework demonstrates how prospective partner firms’ complementing bodies of knowledge and goal alignment interact to affect the success of a collaboration.Design/methodology/approachThe authors use geometric modeling to represent the interrelationships among knowledge similarity/dissimilarity, goal congruence, knowledge complementarity (KC) and innovation in alliance formation. Using this model as a framework, the authors derive relationships among predictors of innovation success and determine how they affect the nature of partnerships under varying conditions of KC.FindingsThis research shows how innovation success is strongly determined by partner selection. Specifically, the authors examine the influence of KC and partner goals on three aspects of a potential research and development (R&D) alliance – the potential level of innovation outcome for the alliance, the boundaries of knowledge sharing and limitations arising from knowledge and goal incongruence and the nature of cooperation.Originality/valueAlthough there is broad empirical support that innovation success is influenced by the similarity of R&D partners’ knowledge, further research is still needed to model the relationship more precisely between partner KC and goal alignment. The authors address this gap by developing a model that is both prescriptive and predictive of how innovation success can be achieved in the context of disparate but complementing knowledge and goal sets. The authors conclude with practical implications for practice and future research directions.

СУЧАСНА ТЕОРІЯ МІЖНАРОДНОЇ ТОРГІВЛІ

International trade is a system of international commodity-monetary and economic relations, consisting of foreign trade of all countries of the world. International trade is the central link of the link of global economic relations, mediating almost all types of international division of labor and connecting all countries of the world into a single international economic system. The purpose of the article is to highlight the problematic aspects of the modern theory of international trade. Methods used in the research: comparison, comparative analysis, systematization and logic, etc. The hypothesis of the study was the assumption that trade is a means by which countries can develop specialization, increase the productivity of their resources and, in general, increase the total volume of production (develop as a whole). Presenting main material. Economic and political risks in international trade are determined by geographic, political, and demographic factors. Modern international trade is dynamic. The structure and volumes of exports and imports of the turnover of various countries and regions of the world are rapidly and continuously changing. Originality and practical significance of the research. Modern theories of international trade either develop the principles of classical theories, extending them to a larger number of goods, countries and factors of production, or study certain aspects of international trade that for some reason remained unexplained by classical theory. Conclusions. The competitiveness of large national firms is certainly oriented towards national ones. To analyze their activities, Porter's concept of the value chain (value chain, production chain) is used, i.e. the set of business operations of the firm during which it creates added value. Concentration on the company's most expensive links of this chain (for example, R&D and sales) and the transfer of other operations to partner firms (foreign or domestic small and medium-sized enterprises) allows TNCs to maximize the production of added value. For example, the American company Nike dominates the world market of sportswear and shoes, but it almost does not produce them itself, because it distributes orders mainly to foreign partner companies and specializes in design and logistics.

Risk management, robustness and resilience: mechanisms for stabilizing and improving agility performance

Paper aims This study aims to empirically explore the mechanisms by which supply chain capabilities dedicated to risk management, robustness, and resilience contribute to improved agility performance in times of disruptions from unavoidable risks. Originality This is the first empirical research examining the direct and indirect effects of supply chain capabilities related to risk management, robustness, and resilience on improving agility performance in times of disruptions. Research method The study considers supply chain risk management as a dynamic capability and supply chain robustness and resilience as operational capabilities that have a mediating role in improving the agility performance of partner firms. Data collected through a survey was used for structural equation modeling and other tests to explore the respective effects of these supply chain capabilities in an environment marked by unavoidable risks, vulnerabilities, and disruptions. Main findings The development of a supply chain risk management capability supported by the generation and/or reconfiguration of the operational capabilities inherent in supply chain robustness and supply chain resilience results in improved agility performance for global supply chain partner firms in times of disruptions. Implications for theory and practice The results contribute to the theoretical development of issues related to the mechanisms by which supply chain capabilities, particularly risk management, robustness, and resilience work together to improve agility performance and achieve competitive advantage in times of disruptions.

The governance implication of the geographic concentration of franchise activities for franchise relationships

While the interfirm governance literature has drawn largely upon the transaction cost perspective to investigate the determinants of contract design, the governance implications of partners’ geographic proximity have received relatively little attention. By complementing the agency theoretical lens of geographic dispersion with the economic and sociological perspectives on geographic proximity, I investigate how the geographic concentration of partner firms relates to the design of contracts. Leveraging disclosed documents and contracts on restaurant franchise chains in the U.S., I find that a greater geographic concentration of outlets is associated with less use of enforcement provisions. At the same time, the results show that the relationship between the geographic concentration of outlets and the use of coordination provisions hinges upon the intensity of multiunit ownership in franchise chains. This paper generates new insights into the governance implications of proximate partners that offer similar products or services and the antecedents of contract design.

From Family Household Economics to the Economic Theory of the Modern Family: Sesquicentennial Shifts in Ontology and Epistemology

The article is dedicated to the evolution of institutions of the household and the family, as well as their perception in economics from the nineteenth century to the present day. Modern academic literature largely preserves the notion of an undivided unity of family and household, which is inherited from the 19th century neoclassical economic thought and reflects the socio-economic realities that existed a century and a half ago. However, following the active emancipation of individuals from the traditional family in the West in the first half of the 20th century, the process of gradual disappearance of family households as one of the three major (along with the firm and the state) economic actors began. In modern western countries, the decision makers in the markets of labour, capital and consumer goods are no longer families, but independent individuals. Families do not disappear, but in western countries they are transformed into a kind of partner firms, whose members freely choose/change partners according to changing personal needs. This qualitative change in the nature of family unions was reflected in the 1980s in “the economic theory of the family” based on the approaches of Gary Becker and Robert A. Pollak, where the behaviour of sexual / marital partners is consistently likened to market behaviour. These trends of changing ontology and epistemology of the family as an economic entity are very important for understanding the capabilities and limitations of traditional family support policies manifested in modern Russia.

Applying agility to improve customer performance when supply and demand vary from core conditions

PurposeThe purpose of this research is to extend existing knowledge of supply chain agility by identifying the interrelationships among key elements of agility that may impact customer performance improvement when conditions of demand and supply vary from the core assumptions used to design supply chain networks.Design/methodology/approachThe research employs the principles of middle range theorizing (Merton, 1968) to incorporate observations from field interviews and data collected from executives, managers, and analysts from six global manufacturing firms across a range of industries to form research propositions about the nature of relationships among cognitive agility dimensions, antecedent impediments to cognitive agility, and the relationships between cognitive and physical agility to improve performance that can later be subjected to deductive testing.FindingsThe supply chain designs used by the participating firms to deliver value for core products were not sufficiently agile to meet desired customer performance levels when certain supply or demand conditions varied significantly from the norm. In collaboration with partner firms, the findings suggest that improving cognitive abilities to see, think and act by deploying information-based tactical initiatives in planning, inventory positioning, and supplier lead time performance monitoring enable improved physical agility that enable a firm to respond to changes swiftly and flexibly in the demand and supply environment. Importantly, the findings also suggest that the dimensions of cognitive agility are correlated and are formative elements of the latent construct of cognitive agility, which is antecedent to physical agility.Research limitations/implicationsThese findings are limited in scope to the six companies that participated in this research. Future explorations should generalize to a broader population of firms and conditions. The results do provide evidence of the relationships between the dimensions of agility that are both a contribution and should guide future research on the subject.Practical implicationsFrom a managerial standpoint, the research findings provide insight into how firms might manage agility to improve performance when demand and supply conditions vary from those for which the core supply chain was originally designed. The findings suggest that improving the ability to capture, process, and disseminate information, i.e. cognitive agility dimensions of alertness, accessibility, and decisiveness, facilitates improved information-based initiatives in planning, inventory positioning, and supplier lead time performance monitoring, which in turn enables improved physical initiatives to swiftly and flexibly respond to changes in the demand and supply environment. Such improvements ultimately result in heightened customer service and inventory performance.Originality/valuePrevious research is mute regarding the interrelationships among the identified dimensions of supply chain agility, specifically those considered to be “cognitive” elements and those that involve physical actions. The finding suggesting that the dimensions of cognitive agility are correlated and are formative elements of the latent construct of cognitive agility provides an important theoretical insight that contributes to enhanced understanding of the nature of supply chain agility to foster future quantitative explorations to better understand the phenomena.

Disentangling Reputational Effects in Alliances

An important consequence of an alliance is that partnering firms combine their reputations by associating them to jointly implemented projects. However, an often-overlooked aspect is that those reputations may themselves change due to both the announcement of the firms’ decision to form the alliance and the performance of joint projects. We develop a formal model that provides an integrated perspective of these reputational effects, while allowing us to isolate and characterize each of them. We find that the way in which the firms’ competence levels affect their decision to form an alliance determines how the firms’ reputations evolve following the announcement of the alliance and the performance of joint projects. This indicates that the analysis of the reputational effects of an alliance requires understanding the firms’ alliance formation decision in the first place. We show, for instance, that a firm’s reputation may decrease following the decision to form an alliance, and that the impact of project performance on the reputations of alliance partners can be very asymmetric. Among other things, our analysis implies that a firm’s desirability as an alliance partner does not necessarily increase with its reputation and level of competence.Funding: A. Almeida Costa and L. Almeida Costa thankfully acknowledge funding from the Fundação para a Ciência e a Tecnologia [Grants UID/ECO/00124/2019, UIDB/00124/2020, UIDP/00124/2020, and Social Sciences DataLab–PINFRA/22209/2016], as well as from POR Lisboa and POR Norte [Social Sciences DataLab–PINFRA/22209/2016].Supplemental Material: The e-companion is available at https://doi.org/10.1287/stsc.2022.0175 .

The Effect of Litigation Experience on the Scope of R&D Alliances

This paper examines the role of partnering firms’ litigation experience on their proclivity to enter into broad scope R&D alliances. Although prior alliance research proposed factors that will likely influence partnering firms’ preference for engaging in a broad scope alliance, these studies have focused on product market and capability linkages between partnering firms that are likely to intensify competitive concerns, while understudying how partnering firms’ prior experience can generate similar concerns. In this study, we attempt to fill this theoretical gap by unpacking partnering firms’ prior litigation experience as a novel dimension of experience that has been hitherto not considered in alliance research. We suggest that partnering firms’ greater litigation experience will be negatively associated with their choice of a broad scope alliance. Furthermore, we argue that insofar as partnering firms’ litigation experience intensifies competitive concerns and induces them to opt-out a broad scope alliance, such concerns will allay for partners when partners share dyadic experiences such as common technological experience and collaborative experience. Using a sample of R&D alliance agreements in the biopharmaceutical industry we furnish evidence for our theory.

A Theory of Network Resource Slack in a Firm’s Dyadic Relationships

Extant literature on slack resource has concentrated on examining excess resources that reside within the firm boundaries. We study the resources that are created within a firm’s alliance network but not fully utilized within the duration of a focal alliance. We term these unused resources network resource slack in this paper. We build a novel theory on how different types of network resource slack affect the focal alliance value and how firms can reach out to and connect with other partner firms in order to utilize the network resource slack.

The Dark Side of Technological Modularity: Opportunistic Information Hiding During Interorganizational System Adoption

To drive competitive advantage in today’s fast-paced and disruptive business environment, firms are increasingly investing in the modularization of their technology infrastructure. In a rapidly changing and interconnected business environment where flexibility is key, modularity is often hailed as a foundational pillar of information technology systems of the future. For networked firms, modularity has been traditionally viewed as unambiguously beneficial because it allows for closer alignment with partner firms and also mitigates risk by lowering partner switching costs. However, we find that in interfirm networks undergoing technology transitions in the form of adoption of new interorganizational systems such as blockchains, modularity can also engender additional risks. Specifically, the early stages of IOS adoption are characterized by information asymmetries, and we find that high levels of technological modularity can render firms more susceptible to opportunistic information withholding by network partners. Our findings run counter to the traditional view of modularity as a capability that can improve the efficiency of IOS adoption, or as a governance mechanism that reduces risks associated with IOS adoption. As optimism and investments toward modularity grow, by identifying associated risks, our work cautions managers to adopt a more qualified view of this capability during technological transitions.

Career Change of Young Talent and the Influence of Knowledge Transfer on Vocational Commitment: a Study of Hospitality Apprentices in Bavaria (Germany)

Career change of young talent aggravates human resource shortages in various industries and the analysis of vocational commitment during the educational phase becomes paramount. Knowledge transfer modes and dynamics in the education of young professionals can influence their vocation or “calling” in the sector they are specialising for. With the background of the knowledge-based view, the goal of this study is to identify knowledge transfer-related aspects of education that exert a relevant influence on apprentices’ vocational commitment. The findings of the study of 331 hospitality apprentices in Bavaria, Germany, reveal that both academic sources and firm sources in the apprenticeship-based, also called dual, educational system affect the vocational commitment of apprentices. Specifically, the satisfaction with the training in the educational centre, the existence of organisational mentorship, and a personalised training system in the firm significantly affect vocational commitment after the educational stage. Consequently, educators along with mentors and managers in the partner firms can help enhance their students’ vocational commitment and potentially decrease their likelihood of leaving a sector.

The Client and Service Provider Relationship in IT Outsourcing Project Success

The role of organizational attitude for an effective knowledge sharing (KS) in IT outsourcing (ITO) relationships has not been adequately addressed. In this paper, we investigate the relationship between KS and ITO success as well as the potential moderating effect of organizational attitude on the relationship between KS and partnership quality in ITO. By leveraging structural equation modeling (SEM) on survey data from 153 ITO projects, results show that organizational attitudes significantly influence knowledge sharing and partnership quality, which in turn, results in successful ITO project. Moreover, the relationship between knowledge sharing and partnership quality is more pronounced when the partner firms have positive attitudes to KS. We further showed that partnership quality mediates the relationship between knowledge sharing and the success of an ITO project. Finally, the results of this study indicate that positive organizational attitude improves knowledge sharing between the client and service providers (i.e vendors), and creates stronger outsourcing partnerships.

Partner Fit between Partner Firms and IJV Performance: A Non-linear Relationship

Purpose This study analyzes the effect of partner fit between international joint venture (IJV) partners on IJV performance as a nonlinear relationship. Design/Methodology/Approach A survey was conducted on international joint venture companies belonging to the manufacturing industry in Korea formed between Korean and foreign companies, and multiple regression analysis was conducted. Findings As a result of empirical analysis, it was confirmed that there was an inverted U-shape relationship between partner fit and IJV performance. Research Implications This study suggest that partner fit has a positive effect on IJV performance to a certain level, but excessive partner fit may lead to a decline in IJV performance because over-embeddedness hinders new learning and innovation between partners.

ADVANTAGES AND PROSPECTS OF CO-BRANDING IN THE UKRAINIAN MARKET

BACKGROUND AND OBJECTIVES. The marketing practices of companies over the past two decades have increasingly been based on co-marketing, or inter-firm marketing alliances. The mutual recognition and understanding that each firm's success depends in part on the other firm forms the foundation underlying co-marketing activities. Firms move from trying to win alone to forming networks of partner firms. Corporations understand the need for alliances to acquire and maintain competitive advantage.METHODS. We used general scientific and special research methods: abstract-logical – to summarize theoretical and methodological foundations of co-branding as an integrative marketing tool for joint development of companies; economic-statistical – to analyze the level of development of poultry companies; monographic – to study the experience of individual companies with horizontal form of co-branding; analysis and synthesis – to study the components of co-branding companies; sociological research – to identify key success factors of co-branding.FINDINGS. The structural and logical model of co-branding alliances of poultry companies, the use of which is based on a co-branding strategy, creates the necessary basis for its further development within the framework of modern marketing theory, will increase the effectiveness of co-branding.CONCLUSION. Co-branding, which is a form of strategic collaboration between two brands that involves bringing them together to create a new product or service, makes the marketing alliances of companies visible to the consumer. In doing so, companies imply recognition of the fact that their prominence represents added value. Closer collaboration with retailers, more focused promotion, and co-branding are becoming ways for many consumer companies to control costs and keep prices down. An example of such cooperation is the use of a co-branding strategy for poultry companies.

Value co‐creation on technology‐enabled platforms for business model responsiveness and position enhancement in global value chains

AbstractGlobal value chains (GVCs) enable multinational enterprises (MNEs) to engage supplier and partner firms in developing/emerging economies for lower production costs and sell products in advanced economies for maximum profits. However, digital technologies are shifting the basis of value offering in GVC from products and services to platforms. Considering that these platforms facilitate business exchanges in multi‐actor networks, the partner or supplier firms of MNEs can easily become competitors to MNEs if these firms participate in different networks. Nevertheless, relatively little research addresses how MNEs can develop structural flexibility for competitive association with and differentiation from their partner firms while developing effective strategies to optimize value creation and capture from their relationship with these partner firms. This study develops a conceptual framework to explain how value co‐creation on technology‐enabled platforms facilitates structural flexibility and strategic management of firm relationships and activities in GVC. The framework has significant implications for responsive business models and enhanced positions for firms to participate and influence value creation and appropriation in GVC.