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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
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 11 (2005)
    Issue (Month): 3 (September)
    Pages: 397-416

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    Handle: RePEc:eee:intman:v:11:y:2005:i:3:p:397-416

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    Related research

    Keywords: MNC-SME strategic alliances Governance mode Knowledge transfer Organisational learning Appropriation concern;

    References

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    1. Contractor, Farok J. & Ra, Wonchan, 2002. "How knowledge attributes influence alliance governance choices: A theory development note," Journal of International Management, Elsevier, Elsevier, vol. 8(1), pages 11-27.
    2. Hall, Richard & Andriani, Pierpaolo, 2003. "Managing knowledge associated with innovation," Journal of Business Research, Elsevier, vol. 56(2), pages 145-152, February.
    3. Mowery, David C. & Oxley, Joanne E. & Silverman, Brian S., 1998. "Technological overlap and interfirm cooperation: implications for the resource-based view of the firm," Research Policy, Elsevier, vol. 27(5), pages 507-523, September.
    4. Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 13(2), pages 387-409, October.
    5. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
    6. John Hagedoorn & Rajneesh Narula, 1996. "Choosing Organizational Modes of Strategic Technology Partnering: International and Sectoral Differences," Journal of International Business Studies, Palgrave Macmillan, vol. 27(2), pages 265-284, June.
    7. Nakamura, Masao & Shaver, J. Myles & Yeung, Bernard, 1996. "An empirical investigation of joint venture dynamics: Evidence from U.S.-Japan joint ventures," International Journal of Industrial Organization, Elsevier, vol. 14(4), pages 521-541, June.
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    Cited by:
    1. Globerman, Steven & Nielsen, Bo Bernhard, 2007. "Equity versus non-equity international strategic alliances involving Danish firms: An empirical investigation of the relative importance of partner and host country determinants," Journal of International Management, Elsevier, Elsevier, vol. 13(4), pages 449-471, December.
    2. 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, Elsevier, vol. 15(4), pages 387-400, December.
    3. Sylvaine Mercuri & Maha Raïs, 2010. "Alliance stratégique entre PME et Grande Firme Internationale : Quel rôle pour le middle manager ?," Post-Print halshs-00692411, HAL.

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