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MNC-SME strategic alliances -- A model framing knowledge value as the primary predictor of governance modal choice

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  • O'Dwyer, Michèle
  • O'Flynn, Eamonn

Abstract

This paper addresses a deficit in research on strategic alliance formation which, as noted by Gulati (1998) [Gulati, R., 1998. Alliances and networks. Strategic Management Journal 19, 293-317], has resulted in little attention being given to transaction costs and knowledge-based imperatives for alliance formation. In addition, Contractor and Ra (2002) [Contractor, F.J., Ra, W., 2002. How knowledge attributes influence alliance governance choices: a theory development note. Journal of International Management 8, 11-27] illustrated that theory on governance modal choice from the perspective of transactions costs and knowledge characteristics is underdeveloped, thereby proposing an interactive model predicting governance modal choice in an attempt to redress this imbalance. Using a multiple case study methodology the present study examines the important aspects of governance mode and knowledge exchange in strategic alliances between a multi-national corporation (MNC) and small and medium enterprises (SMEs). In doing so this paper qualifies the model proposed by Contractor and Ra (2002) [Contractor, F.J., Ra, W., 2002. How knowledge attributes influence alliance governance choices: a theory development note. Journal of International Management 8, 11-27], suggesting a model framing knowledge value as the primary predictor of governance modal choice as an appropriate framework to evaluate both the knowledge exchange relationships and governance modal choice relationships between MNCs and SMEs. Thus this paper advances theory on the motives for alliances, specifically, the effect on governance modal choice of a company's desire to acquire or access knowledge. In addition the paper furthers theory on organisational learning and absorptive capacity focusing on their influence on governance mode, in the context of management strategy.

Suggested Citation

  • O'Dwyer, Michèle & O'Flynn, Eamonn, 2005. "MNC-SME strategic alliances -- A model framing knowledge value as the primary predictor of governance modal choice," Journal of International Management, Elsevier, vol. 11(3), pages 397-416, September.
    • Handle: RePEc:eee:intman:v:11:y:2005:i:3:p:397-416
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    2. Sylvaine Mercuri & Maha Raïs, 2010. "Alliance stratégique entre PME et Grande Firme Internationale : Quel rôle pour le middle manager ?," Post-Print halshs-00692411, HAL.
    3. Valle, Sandra & García, Francisco & Avella, Lucía, 2015. "Offshoring Intermediate Manufacturing: Boost or Hindrance to Firm Innovation?," Journal of International Management, Elsevier, vol. 21(2), pages 117-134.
    4. Gnyawali, Devi R. & Singal, Manisha & Mu, Shaohua Carolyn, 2009. "Knowledge ties among subsidiaries in MNCs: A multi-level conceptual model," Journal of International Management, Elsevier, vol. 15(4), pages 387-400, December.

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