The many faces of multi-firm alliances: Lessons for managers

California Management Review

Volumn , Issue 3, 1997, Pages 101-117

  Hwang, Peter ^a   Burgers, Willem P ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0031514931     PISSN: 00081256     EISSN: None     Source Type: Journal    
DOI: 10.2307/41165901     Document Type: Article

References (30)

1. M. Hergert and D. Morris, "Trends in International Collaborative Agreements," in F.J. Contractor and P. Lorange, eds., Cooperative Strategies in International Business (Lexington, MA: Lexington Books, 1987).
2. B. Gomes-Casseres, "Group versus Group: How Alliance Networks Compete," Harvard Business Review, 72 (July/August 1994): 62-74.
3. Gomes-Casseres, op. cit.
4. See, for example, A. Parkhe, "Strategic Alliance Structuring: A Game Theoretic and Transaction Cost Examination of Interfirm Cooperation," Academy of Management Journal, 36/4 (1993): 794-829.
5. See, for example, Ranjay Gulati, Tarun Khanna, and Nitin Nohria, "Unilateral Commitments and the Importance of Process in Alliances," Sloan Management Review (Spring 1994).
6. Parkhe, op. cit.
7. Note that a two-party prisoner's dilemma is a special case of the multi-firm prisoner's dilemma and is modeled exclusively in the four end-points of the cooperation and non-cooperation payoff curves C and NC.
8. The key players in ACE included DEC, Microsoft, Santa Cruz Operation (SCO), Zenith, and Compaq. The network originated with the effort by Mips Computer Systems (MIPS) to find allies to support its Reduced Instruction Set Chip (RISC) architecture. The intended standards encompassed microprocessors, operating systems, memory access schemes, graphical interfaces, and bustypes.
9. "ACE Consortium Members Disagree As Much As They Agree," PC Week, June 10, 1991, pp. 130-131.
10. They include Microsoft's OS/2 3.0, Windows NT, and a new version of UNIX developed by SCO based on DEC'S Ultrix and the OSF's OSF/1 standard. Then, in October of 1991, ACE was joined by AT&T, and subsequently AT&T's System V release 4 was added as yet another operating system standard.
11. "ACE Spec Holding Its Own Despite Group's Setbacks," PC Week, July 6, 1992, p. 10.
12. Larry D. Browning, Janice M. Beyer, and Judy C. Shetler, "Building Cooperation in a Competitive Industry: SEMATECH and the Semiconductor Industry," Academy of Management Journal, 38/12 (1995): 113-151.
13. William J. Spencer and Peter Grindley, "SEMATECH After Five Years: High-Technology Consortia and U.S. Competitiveness," California Management Review, 35/4 (Summer 1993): 9-32.
14. Browning, Beyer, and Shetler, op. cit.
15. J. Bendor, R. Kramer, and S. Stout, "When in Doubt: Cooperation in a Noisy Prisoner's Dilemma," Journal of Conflict Resolution, 35 (1991): 691-719.
16. J. E. McCann, "Design Guidelines for Social Problem-Solving Interventions," Journal of Applied Behavioral Science, 19 (1983): 177-189.
17. K. K. Fung, "On the Slippery Slope: Conformance verses Defection in a Multi-Party Prisoner's Dilemma," Journal of Economic Behavior and Organization, 9 (1988), 325-343.
18. For a detailed discussion on QWERTY, see W. Brian Arthur, "Competing Technologies and Economic Prediction," Options, International Institute for Applied Systems Analysis, Laxenburg, Austria, April 1984; Paul David, "Clio and the Economics of QWERTY," American Economic Review, Papers and Proceedings, May 1985.
19. For a detailed discussion on QWERTY, see W. Brian Arthur, "Competing Technologies and Economic Prediction," Options, International Institute for Applied Systems Analysis, Laxenburg, Austria, April 1984; Paul David, "Clio and the Economics of QWERTY," American Economic Review, Papers and Proceedings, May 1985.
20. "Strategic Alliance Illusions," Computerworld, March 21, 1994, p. 43.
21. As early as 1987, it had been expected that the more sophisticated UNIX operating system would over time replace MS-DOS. By 1993, the situation had changed drastically. Netpower and several other RISC workstation suppliers had begun running off-the-shelf Microsoft Windows NT on their machines. As a result, analysts cautioned that UNIX vendors should hear "a warning siren with the shrink-wrapped Windows NT invading RISC." See "Netpower: Shrink-Wrap Invades RISC; Company Bucks Unix Trend with Microsoft Windows NT," Unix Review, 11 (September 1993): 9.
22. "The Need to Know," Unix Review, 13 (January 1995): 7.
23. The proposed typology is exhaustive except for a game where the payoff line of cooperation is always above that of non-cooperation. In such a game, total cooperation is the stable solution. We did not discuss this game type since the focus of this paper is on non-cooperative games.
24. The lofty goal held by Soviet communism was that of a slippery slope, a gigantic multi-party prisoner's dilemma that held many people in its grip for many years.
25. J.D. Steinbruner, The Cybernetic Theory of Decision (Princeton, NJ: Princeton University Press, 1974); M. Levine, "Hypothesis Theory and Nonlearning Despite Ideal S-R Reinforcement Contingencies," Psychological Review, 78 (1971).
26. J.D. Steinbruner, The Cybernetic Theory of Decision (Princeton, NJ: Princeton University Press, 1974); M. Levine, "Hypothesis Theory and Nonlearning Despite Ideal S-R Reinforcement Contingencies," Psychological Review, 78 (1971).
27. Fung, op. cit.
28. Ranjay Gulati, Tarun Khanna, and Nitin Nohria, op. cit.
29. B.M. Staw, "The Escalation of Commitment to a Course of Action," Academy of Management Review, 6 (1981): 577-587. Consistent with the common usage of the term, rational behavior refers to actions that promote the actor's narrow, selfish interests. An interesting question regarding rationality arises when the sources of escalating commitment come from one's emotional factors such as pride, honor, or face. Is the escalation of commitment rational under such circumstances? While the answer critically depends on how much value one attaches to these factors and it is necessarily subjective to the individual decision makers, we wish to emphasize here that careful analysis of the stakes and incentives before making commitments is essential to guard against poor reasoning that may lead to bad decisions.
30. "Strategic Alliance Illusions," Computerworld, March 21, 1994, p. 43.