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The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing

  • Zhiang (John) Lin

    ()

    (School of Management, University of Texas at Dallas, Richardson, Texas 75080)

  • Haibin Yang

    ()

    (Department of Management, City University of Hong Kong, Kowloon, Hong Kong)

  • Irem Demirkan

    ()

    (School of Management, University of Texas at Dallas, Richardson, Texas 75080)

Registered author(s):

    Although alliance studies have generally favored an ambidextrous approach between exploration and exploitation, they tend to overlook a firm's characteristics, its industry constraints, or the dynamic network in which the firm is embedded. This study examines the ambidexterity hypothesis and its boundary conditions with a unique research method. We not only analyze empirical data from five U.S. industries spanning eight years, but also expand theoretical insights to the network level by building a computer simulation model. Both our empirical and simulation results reveal the contingencies of the ambidexterity hypothesis in alliance formation. Our findings show that although an ambidextrous formation of alliances benefits large firms, a focused formation of either exploratory or exploitative alliances benefits small firms. In an uncertain environment an ambidextrous formation enhances firm performance but so does a focused formation in a stable environment. Finally, the simulation model demonstrates that a firm's centrality and structural hole positions in network relations can moderate the relationships between alliance formation choices and firm performance, and that the ambidexterity hypothesis may be limited to the earlier stage of the network. Our study provides critical evidence into the viability of adopting a dynamic network perspective in understanding the ambidexterity hypothesis and advancing strategic alliance research beyond static and dyadic levels.

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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0712
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    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 53 (2007)
    Issue (Month): 10 (October)
    Pages: 1645-1658

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    Handle: RePEc:inm:ormnsc:v:53:y:2007:i:10:p:1645-1658
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    1. Lori Rosenkopf & Paul Almeida, 2003. "Overcoming Local Search Through Alliances and Mobility," Management Science, INFORMS, vol. 49(6), pages 751-766, June.
    2. 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, 01.
    3. Olav Sorenson, 2003. "Interdependence and Adaptability: Organizational Learning and the Long--Term Effect of Integration," Management Science, INFORMS, vol. 49(4), pages 446-463, April.
    4. Ghemawat, Pankaj & Ricart, Joan E., 1993. "Organizational tension between static and dynamic efficiency, The," IESE Research Papers D/255, IESE Business School.
    5. Henk W. Volberda & Arie Y. Lewin, 2003. "Co-evolutionary Dynamics Within and Between Firms: From Evolution to Co-evolution," Journal of Management Studies, Wiley Blackwell, vol. 40(8), pages 2111-2136, December.
    6. Marta Ballesta & Joshua Livnat & Nishi Sinha, 1999. "Corporate Reorganizations: Changes in the Intensity of Labor and Capital Expenditures," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 26(9-10), pages 1205-1238.
    7. Manju K. Ahuja & Dennis F. Galletta & Kathleen M. Carley, 2003. "Individual Centrality and Performance in Virtual R& D Groups: An Empirical Study," Management Science, INFORMS, vol. 49(1), pages 21-38, January.
    8. 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.
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