Research on alliance summary

Alliances are defined as "any voluntarily initiated cooperative agreements between firms" (Gulati, 1995). Most of the research of alliance focus on the formation of the alliances, alliance capability.

Formation of the alliance

There are mainly two factors that lead firms to form alliances. First, alliance help with knowledge transfer and innovation. Alliances help with knowledge exchange between partners via many mechanisms and one of the most important mechanisms is the rotations of employees of the firms, their partners and alliances. For technology firms, the partners have contracts to make technical staffs available to the joint ventures. Under this contract, the knowledge transfer is two-folded. First, as the technical staffs come from both firms, their knowledge will contribute to the joint ventures’ knowledge creation process. Second, the staffs in the joint venture will occasionally rotate back to the parent firms and take their experience and new knowledge with them. Knowledge-based view of the firms argues that knowledge is hard to transfer, especially for complex technology information (Kogut & Zander, 1992). In addition, the hierarchical structure of the joint venture makes knowledge transfer easier.Second, alliance is formed through prior interaction and is built on the trust between two firms (Gulati, 1995).


Alliance capability

Alliance capability is defined as the ability for firms to create and capture value through alliances.Alliance capability is discussed at two stages. One is value capture. Before the alliances have been formed, the capability refers to how organizations search and processing information, codify routines. Afer the alliance has been formed, the capability refers to whether the two organizations can coordinate and communicate with each other, how they solve conflicts and update their contract.
The other one is value capture. Before the alliances have been formed, the value capture process depends on contract design, governance and negotiation process. After the alliance has been formed, whether the firms can capture the value depends on the knowledge transfer, absorb capability and monitoring capabilities (Wang and Rajagopalan, 2015).


Alliance portfolio

Moving from discussing signal alliances, research in alliance portfolio is also flourishing. There are three parts of research that focus on alliance portfolio: the emergence of alliance portfolio, the configuration of alliance portfolios and the management of alliance portfolios (Wassmer, 2008).


References:
Gulati, R. (1995). Does Familiarity Breed Trust? the Implications of Repeated Ties for Contractual Choice in Alliances. Academy of Management Journal, 38(1), 85–112.

Wang, Y., & Rajagopalan, N. (2015). Alliance capabilities: Review and Research agenda. Journal of Management.

Wassmer, U. (2008). Alliance portfolios: A review and research agenda. Journal of Management.