IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v21y2010i6p1213-1232.html
   My bibliography  Save this article

Alliance Activity as a Dynamic Capability in the Face of a Discontinuous Technological Change

Author

Listed:
  • Jaideep Anand

    (Management and Human Resources, Fisher College of Business, Ohio State University, Columbus, Ohio 43210)

  • Raffaele Oriani

    (Department of Economics and Business, LUISS Guido Carli University, 00196 Rome, Italy)

  • Roberto S. Vassolo

    (Business Policy, IAE Business School, Universidad Austral, Pilar, Buenos Aires (1629), Argentina)

Abstract

Using a dynamic capabilities lens, this study examines how technological and complementary capabilities affect firms' abilities to enter emerging technologies. The empirical evidence from a sample of pharmaceutical firms entering the new biotech fields indicates that both technological and complementary capabilities potentially affect firms' entry into emerging technologies and entry mode. However, the results also show that capabilities in the traditional technology and the emerging technology have different effects. Firms with capabilities in the emerging technology are more likely to enter new technological fields and more likely to use internal development in doing so. Complementary capabilities also increase the rate of entry into emerging technological fields. However, capabilities in traditional technology are found to be unrelated to the propensity to enter new fields, and to the choice of entry mode. These results are consistent with insights from the literature on dynamic capabilities and evolutionary theory. We examine the implications of these results for literatures on strategic alliances and technological competition.

Suggested Citation

  • Jaideep Anand & Raffaele Oriani & Roberto S. Vassolo, 2010. "Alliance Activity as a Dynamic Capability in the Face of a Discontinuous Technological Change," Organization Science, INFORMS, vol. 21(6), pages 1213-1232, December.
    • Handle: RePEc:inm:ororsc:v:21:y:2010:i:6:p:1213-1232
    DOI: 10.1287/orsc.1090.0502
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.1090.0502
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.1090.0502?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    2. David J. Teece, 2003. "Competition, Cooperation, and Innovation Organizational Arrangements for Regimes of Rapid Technological Progress," World Scientific Book Chapters, in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 16, pages 447-474, World Scientific Publishing Co. Pte. Ltd..
    3. Arrow, Kenneth J, 1974. "Limited Knowledge and Economic Analysis," American Economic Review, American Economic Association, vol. 64(1), pages 1-10, March.
    4. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    5. Srinivasan Balakrishnan & Birger Wernerfelt, 1986. "Technical change, competition and vertical integration," Strategic Management Journal, Wiley Blackwell, vol. 7(4), pages 347-359, July.
    6. Kogut, Bruce & Chang, Sea Jin, 1991. "Technological Capabilities and Japanese Foreign Direct Investment in the United States," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 401-413, August.
    7. Oliver E. Williamson, 1991. "Strategizing, economizing, and economic organization," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 75-94, December.
    8. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    9. Zucker, Lynne G. & Darby, Michael R., 1997. "Present at the biotechnological revolution: transformation of technological identity for a large incumbent pharmaceutical firm," Research Policy, Elsevier, vol. 26(4-5), pages 429-446, December.
    10. Robert D. Dewar & Jane E. Dutton, 1986. "The Adoption of Radical and Incremental Innovations: An Empirical Analysis," Management Science, INFORMS, vol. 32(11), pages 1422-1433, November.
    11. Andrew A. King & Christopher L. Tucci, 2002. "Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities," Management Science, INFORMS, vol. 48(2), pages 171-186, February.
    12. Jaideep Anand & Harbir Singh, 1997. "Asset Redeployment, Acquisitions And Corporate Strategy In Declining Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 99-118, July.
    13. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    14. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    15. Helfat, C.E. & Raubitschek, R.S., 2000. "Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products," Papers 00-1, U.S. Department of Justice - Antitrust Division.
    16. John Hagedoorn, 1993. "Understanding the rationale of strategic technology partnering: Interorganizational modes of cooperation and sectoral differences," Strategic Management Journal, Wiley Blackwell, vol. 14(5), pages 371-385, July.
    17. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 725-760, August.
    18. Rebecca Henderson & Iain Cockburn, 1994. "Measuring Competence? Exploring Firm Effects in Pharmaceutical Research," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 63-84, December.
    19. Fernando Merino & Diego R. Rodríguez, 1997. "A consistent analysis of diversification decisions with non‐observable firm effects," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 733-743, October.
    20. Jean-François Hennart & Young-Ryeol Park, 1993. "Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States," Management Science, INFORMS, vol. 39(9), pages 1054-1070, September.
    21. Bruce Kogut & Udo Zander, 1996. "What Firms Do? Coordination, Identity, and Learning," Organization Science, INFORMS, vol. 7(5), pages 502-518, October.
    22. Mitchell, Will & Singh, Kulwant, 1992. "Incumbents' use of pre-entry alliances before expansion into new technical subfields of an industry," Journal of Economic Behavior & Organization, Elsevier, vol. 18(3), pages 347-372, August.
    23. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
    24. Frank T. Rothaermel & David L. Deeds, 2004. "Exploration and exploitation alliances in biotechnology: a system of new product development," Strategic Management Journal, Wiley Blackwell, vol. 25(3), pages 201-221, March.
    25. Jakki Mohr & Robert Spekman, 1994. "Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques," Strategic Management Journal, Wiley Blackwell, vol. 15(2), pages 135-152, February.
    26. Montgomery, Cynthia A. & Hariharan, S., 1991. "Diversified expansion by large established firms," Journal of Economic Behavior & Organization, Elsevier, vol. 15(1), pages 71-89, January.
    27. Frank T. Rothaermel, 2001. "Incumbent's advantage through exploiting complementary assets via interfirm cooperation," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 687-699, June.
    28. Narin, Francis & Noma, Elliot & Perry, Ross, 1987. "Patents as indicators of corporate technological strength," Research Policy, Elsevier, vol. 16(2-4), pages 143-155, August.
    29. Sidney G. Winter, 2003. "Understanding dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 991-995, October.
    30. Glenn Hoetker, 2007. "The use of logit and probit models in strategic management research: Critical issues," Strategic Management Journal, Wiley Blackwell, vol. 28(4), pages 331-343, April.
    31. Bruce Kogut, 1988. "Joint ventures: Theoretical and empirical perspectives," Strategic Management Journal, Wiley Blackwell, vol. 9(4), pages 319-332, July.
    32. Roberto S. Vassolo & Jaideep Anand & Timothy B. Folta, 2004. "Non‐additivity in portfolios of exploration activities: a real options‐based analysis of equity alliances in biotechnology," Strategic Management Journal, Wiley Blackwell, vol. 25(11), pages 1045-1061, November.
    33. Zheng Jane Zhao & Jaideep Anand, 2009. "A multilevel perspective on knowledge transfer: evidence from the Chinese automotive industry," Strategic Management Journal, Wiley Blackwell, vol. 30(9), pages 959-983, September.
    34. Gans, Joshua S. & Stern, Scott, 2003. "The product market and the market for "ideas": commercialization strategies for technology entrepreneurs," Research Policy, Elsevier, vol. 32(2), pages 333-350, February.
    35. Rita Gunther McGrath & Atul Nerkar, 2004. "Real options reasoning and a new look at the R&D investment strategies of pharmaceutical firms," Strategic Management Journal, Wiley Blackwell, vol. 25(1), pages 1-21, January.
    36. Frank T. Rothaermel & Charles W. L. Hill, 2005. "Technological Discontinuities and Complementary Assets: A Longitudinal Study of Industry and Firm Performance," Organization Science, INFORMS, vol. 16(1), pages 52-70, February.
    37. Kathleen M. Eisenhardt & Claudia Bird Schoonhoven, 1996. "Resource-based View of Strategic Alliance Formation: Strategic and Social Effects in Entrepreneurial Firms," Organization Science, INFORMS, vol. 7(2), pages 136-150, April.
    38. Pierre Dussauge & Laurence Capron & Will Mitchell, 1998. "Resource redeployment following horizontal acquisitions in Europe and North America, 1988-1992," Post-Print hal-00464384, HAL.
    39. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    40. Patel, Pari & Pavitt, Keith, 1997. "The technological competencies of the world's largest firms: Complex and path-dependent, but not much variety," Research Policy, Elsevier, vol. 26(2), pages 141-156, May.
    41. Jeffrey J. Reuer & Mitchell P. Koza, 2000. "On lemons and indigestibility: resource assembly through joint ventures," Strategic Management Journal, Wiley Blackwell, vol. 21(2), pages 195-197, February.
    42. Joshua S. Gans & David H. Hsu & Scott Stern, 2002. "When Does Start-Up Innovation Spur the Gale of Creative Destruction?," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 571-586, Winter.
    43. Nelson, Richard R & Winter, Sidney G, 1977. "Simulation of Schumpeterian Competition," American Economic Review, American Economic Association, vol. 67(1), pages 271-276, February.
    44. Maurizio Zollo & Sidney G. Winter, 2002. "Deliberate Learning and the Evolution of Dynamic Capabilities," Organization Science, INFORMS, vol. 13(3), pages 339-351, June.
    45. Mary Tripsas, 1997. "Unraveling The Process Of Creative Destruction: Complementary Assets And Incumbent Survival In The Typesetter Industry," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 119-142, July.
    46. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    47. Lori Rosenkopf & Paul Almeida, 2003. "Overcoming Local Search Through Alliances and Mobility," Management Science, INFORMS, vol. 49(6), pages 751-766, June.
    48. Robert M. Grant & Charles Baden‐Fuller, 2004. "A Knowledge Accessing Theory of Strategic Alliances," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 61-84, January.
    49. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
    50. Udo Zander & Bruce Kogut, 1995. "Knowledge and the Speed of the Transfer and Imitation of Organizational Capabilities: An Empirical Test," Organization Science, INFORMS, vol. 6(1), pages 76-92, February.
    51. Dong-Jae Kim & Bruce Kogut, 1996. "Technological Platforms and Diversification," Organization Science, INFORMS, vol. 7(3), pages 283-301, June.
    52. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    53. Pisano, Gary P., 1991. "The governance of innovation: Vertical integration and collaborative arrangements in the biotechnology industry," Research Policy, Elsevier, vol. 20(3), pages 237-249, June.
    54. Boyes, William J. & Hoffman, Dennis L. & Low, Stuart A., 1989. "An econometric analysis of the bank credit scoring problem," Journal of Econometrics, Elsevier, vol. 40(1), pages 3-14, January.
    55. Michelle Gittelman & Bruce Kogut, 2003. "Does Good Science Lead to Valuable Knowledge? Biotechnology Firms and the Evolutionary Logic of Citation Patterns," Management Science, INFORMS, vol. 49(4), pages 366-382, April.
    56. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
    57. Constance E. Helfat, 1997. "Know‐how and asset complementarity and dynamic capability accumulation: the case of r&d," Strategic Management Journal, Wiley Blackwell, vol. 18(5), pages 339-360, May.
    58. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    59. Richard Makadok & Jay B. Barney, 2001. "Strategic Factor Market Intelligence: An Application of Information Economics to Strategy Formulation and Competitor Intelligence," Management Science, INFORMS, vol. 47(12), pages 1621-1638, December.
    60. Jaideep Anand, 2004. "Redeployment of corporate resources: A study of acquisition strategies in the US defense industries, 1978-1996," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 383-400.
    61. Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colombo, Massimo G. & Grilli, Luca & Piva, Evila, 2006. "In search of complementary assets: The determinants of alliance formation of high-tech start-ups," Research Policy, Elsevier, vol. 35(8), pages 1166-1199, October.
    2. Giovanni. Gavetti & Daniel A. Levinthal, 2004. "50th Anniversay Article: The Strategy Field from the Perspective of Management Science: Divergent Strands and Possible Integration," Management Science, INFORMS, vol. 50(10), pages 1309-1318, October.
    3. Frank T. Rothaermel & Andrew M. Hess, 2007. "Building Dynamic Capabilities: Innovation Driven by Individual-, Firm-, and Network-Level Effects," Organization Science, INFORMS, vol. 18(6), pages 898-921, December.
    4. Mahka Moeen, 2017. "Entry into Nascent Industries: Disentangling a Firm's Capability Portfolio at the Time of Investment Versus Market Entry," Strategic Management Journal, Wiley Blackwell, vol. 38(10), pages 1986-2004, October.
    5. Laurence Capron & Will Mitchell, 2009. "Selection Capability: How Capability Gaps and Internal Social Frictions Affect Internal and External Strategic Renewal," Organization Science, INFORMS, vol. 20(2), pages 294-312, April.
    6. Mehmet Ali Köseoglu & John A. Parnell & Melissa Yan Yee Yick, 2021. "Identifying influential studies and maturity level in intellectual structure of fields: evidence from strategic management," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 1271-1309, February.
    7. Rakesh B. Sambharya & Jooh Lee, 2014. "Renewing Dynamic Capabilities Globally: An Empirical Study of the World’s Largest MNCs," Management International Review, Springer, vol. 54(2), pages 137-169, April.
    8. Ashton Hawk & Jeffrey J. Reuer & Andrew Garofolo, 2021. "The Impact of Firm Speed Capabilities on the Decision to Partner or Go It Alone," Strategy Science, INFORMS, vol. 6(3), pages 191-208, September.
    9. Carolin Haeussler & Matthew J. Higgins, 2012. "Explaining Preferences for Control Rights in Strategic Alliances: A Property Rights and Capabilities Perspective Approach," NBER Working Papers 18364, National Bureau of Economic Research, Inc.
    10. Jing Zhang & Charles Baden‐Fuller, 2010. "The Influence of Technological Knowledge Base and Organizational Structure on Technology Collaboration," Journal of Management Studies, Wiley Blackwell, vol. 47(4), pages 679-704, June.
    11. Frank T. Rothaermel & Maria Tereza Alexandre, 2009. "Ambidexterity in Technology Sourcing: The Moderating Role of Absorptive Capacity," Organization Science, INFORMS, vol. 20(4), pages 759-780, August.
    12. Bruce Rasmussen, 2010. "Innovation and Commercialisation in the Biopharmaceutical Industry," Books, Edward Elgar Publishing, number 13680.
    13. Alessio Cozzolino & Gianmario Verona, 2024. "Decision tree for adaptation after radical changes: linking dynamic capabilities, ambidexterity, and strategic alliances," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(3), pages 745-769, September.
    14. Mahka Moeen & Will Mitchell, 2020. "How do pre‐entrants to the industry incubation stage choose between alliances and acquisitions for technical capabilities and specialized complementary assets?," Strategic Management Journal, Wiley Blackwell, vol. 41(8), pages 1450-1489, August.
    15. Nickerson, Jack A. & Yen, C. James & Mahoney, Joseph T., 2011. "Exploring the Problem-Finding and Problem-Solving Approach for Designing Organizations," Working Papers 11-0107, University of Illinois at Urbana-Champaign, College of Business.
    16. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    17. Bei, Xiaoshu, 2019. "Trademarks, specialized complementary assets, and the external sourcing of innovation," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    18. Zhang, Jing & Baden-Fuller, Charles & Mangematin, Vincent, 2007. "Technological knowledge base, R&D organization structure and alliance formation: Evidence from the biopharmaceutical industry," Research Policy, Elsevier, vol. 36(4), pages 515-528, May.
    19. Basu, Sandip & Phelps, Corey & Kotha, Suresh, 2011. "Towards understanding who makes corporate venture capital investments and why," Journal of Business Venturing, Elsevier, vol. 26(2), pages 153-171, March.
    20. Lee, Po-Yen & Lin, Hui-Tzu & Chen, Hung-Hsin & Shyr, Yi-Hwan, 2011. "Dynamic capabilities exploitation of market and hierarchy governance structures: An empirical comparison of Taiwan and South Korea," Journal of World Business, Elsevier, vol. 46(3), pages 359-370, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:21:y:2010:i:6:p:1213-1232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.