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Reexamining the tradeoff between value creation and value appropriation: The role of internal organizational resources vs. External strategic international alliances

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  • Tower, Annette P.
  • Hewett, Kelly
  • Saboo, Alok

Abstract

Firms can achieve sales growth by strategically emphasizing value creation or value appropriation activities. Surprisingly little is known about the impact of pursing these activities with internal resources as well as via strategic international alliances. Using a data set of 1469 strategic international alliances over a 20-year period, the authors examine how emphasizing value creation versus appropriation – and implementing each internally versus externally – impacts sales growth. Using a novel construct, strategic international alliance emphasis, that captures the tradeoff between value creation and appropriation via international alliances, the authors find that an external focus on value creation increases sales growth. This effect can be further enhanced when firms focus simultaneously on value appropriation internally. In addition, the ratio of international alliances and percentage of joint ventures in firms' alliance portfolios impacts the effect of external value creation on sales growth. These results highlight the importance of coordinating strategic emphases internally and externally.

Suggested Citation

  • Tower, Annette P. & Hewett, Kelly & Saboo, Alok, 2021. "Reexamining the tradeoff between value creation and value appropriation: The role of internal organizational resources vs. External strategic international alliances," Journal of Business Research, Elsevier, vol. 123(C), pages 302-312.
    • Handle: RePEc:eee:jbrese:v:123:y:2021:i:c:p:302-312
    DOI: 10.1016/j.jbusres.2020.09.048
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    Cited by:

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    2. Fernandes, Kiran Jude & Milewski, Simon & Chaudhuri, Atanu & Xiong, Yu, 2022. "Contextualising the role of external partnerships to innovate the core and enabling processes of an organisation: A resource and knowledge-based view," Journal of Business Research, Elsevier, vol. 144(C), pages 146-162.
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    4. Gasparin, Marta & Quinn, Martin & Green, William & Saren, Michael & Conway, Steve, 2022. "Stories of value: Business model innovation adding value propositions articulated by Slow Storytelling," Journal of Business Research, Elsevier, vol. 149(C), pages 101-111.
    5. Carnes, Christina Matz & Cavanaugh, Jeffrey & David, Parthiban & O'Brien, Jonathan, 2023. "Cash creates value for supply chain systems, but who appropriates that value?," Journal of Business Research, Elsevier, vol. 161(C).

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