Performance Effects Of Alliance Portofilio Management Capability

Corporate alliance portfolio as a focal firm’s egocentric alliance network, represents the collection of most direct ties that a firm can gather from the outside business world. In the real business situations, firms rarely count on a single high-performing alliance, instead they tie with many partners simultaneously with strategic aims of gaining resources, cutting costs, reducing risks and expanding market shares. An alliance portfolio aggregates all needed network recourses, transferable as capital, information and technology, and other social-specific resources, such as legitimacy, status and reputation. It is well recognized that an alliance portfolio itself has become the source of sustainable competitive advantage over competitors. However, the construction of high-performing alliance portfolio and the process of realizing its potential value all require corporate capability. Therefore, developing efficient alliance portfolio management capability has become an urgent and challenging issue for all firms.Whereas the bulk of alliance portfolio management studies attract great attentions from scholars, this field is quite new. Typically, studies of alliance portfolio management capability are few and remote. The absent of a systematic and complete framework produces different incomparable views from different angles. To fill this gap. this dissertation aims to answer the fundamental question:"How to effectively construct and manage an alliance portfolio?", from the perspective of capability, and argues the interlinks between alliance portfolio management capability, alliance efficiency ambidexterity (as to simultaneously achieve common value creation efficiency and private value appropriation efficiency), and the performance of firm. Based upon social network theory, alliance theory, the capability perspective, the RBV perspective and the contingency theory, this dissertation explores three sub-issues:(1) at corporate level, what are the definition and dimensions of alliance portfolio management capability? How it effect the performance of a firm?;(2) At industry level, how the paradigm of modularity influence a firm’s choice over capability building?:(3) At network level, how the latecomer firms manage the alliance portfolio with multiple leading firms. To answer these questions, following studies have been undertaken:(Ⅰ) By addressing the concept and dimensions of alliance portfolio, I propose a framework of the effects of alliance portfolio management capability on firm performance via alliance efficiency. Although the concept of alliance portfolio is no stranger to academic research, most are only referring it. To clarify the progress of this stream, I applied a method similar to that described in Provan et al.(2007) and Wassmer (2010), conducting an extensive search of papers which has listed the term of "alliance portfolio (or a synonym) in either its title, abstract, key words, or in its hypothesis or variables.64papers are founds,54aboard, and9domestic. With these papers and other relevant papers from a broad field (such as social network theory, capability perspective, the RBV perspective and transaction cost perspective), this dissertation covers a through literature review, discusses the on-going debates of how to define alliance portfolio management capability, thereby propose a multidimentional, process-based conceptualization of alliance portfolio management capability, i.e. portfolio design, partnering proactiveness. relational governance, and resources configuration. Also the conceptualization of alliance efficiency ambidexterity has been proposed upon prior studies, i.e common value creation efficiency vs. private appropriation efficiency.Ⅰ argue that these two types of efficiency present two separate but complementary paths to performance enhancement. Following the underlying logic ofapability-efficiency-performance’.Ⅰ propose a base conceptual framework that describes how alliance portfolio management capability affects the corporate performance via alliance efficiency.(II) Empirical test of the conceptual framework of relationship between alliance portfolio management capability and corporate performance. By using data from217questionnaires,Ⅰ run reliability and validity test, correlation analysis, and structural equation modeling. The results show that most of hypotheses were supported. Specifically, the four dimensions of alliance portfolio management capability are all positively associated with common value creation efficiency, while three dimensions of alliance portfolio management capability (i.e. portfolio design, partnering proactiveness and resources configuration) are all positively associated with private value appropriation efficiency. Relational governance, however, are found to be negatively associate with private value appropriation efficiency. At last but not least, common value creation efficiency and private value appropriation efficiency are both positively associated with firm performance. Common value creation efficiency are found to have a positive but insignificant effect on private value appropriation efficiency. Empirical results tests and modifies the proposed conceptual framework and make it more realistic. (Ⅲ) Empirical test of the impact of modularity paradigm on the relationship between alliance portfolio management capability and alliance efficiency. The paradigm of modularity has swiftly shifted the traditional inter-firm collaboration network, hereby scholars hold two contradicting views:one suggests that the modularity paradigm has reduced the depth of collaboration among firms, because the embedded knowledge of each product module reduces the level of mutual dependence between firms, as well as lowered the imposed control on alliances; the other view argus that modularity paradigm has ’thickened’ the interfirm interchanges by making the pairs more embedded into the value network. I classified the paradigm of modularity into two levels:the modularity of component and the modularity of interorganizational processes, and argue that different modularity type would have varied moderating role on the relationship between alliance portfolio management capability and alliance efficiency. By using data from107questionnaires, results show that component modularity negatively impact on the relationship between alliance portfolio management capability and common value creation efficiency, while interorganizational processes modularity remains insignificant. Regarding to the relationship between alliance portfolio management capability and private value appropriation efficiency, the role of component modularity is mixed while the interorganizational processes modularity negatively affects the above-mentioned relationships. Overall, some hypotheses are found valid.(Ⅳ) A case study of asymmetric relationships between a latecomer firm and its multiple alliances with multinational leading firms. With the aim to identify dynamics of alliance portfolio management capability and its consequences, this case study explores two Chinese care manufacturers-the Huachen Auto Group and the Zhejiang Geely Holding Group, illustrate the evolution of alliance portfolios with oversea partners and discuses its consequence on performance. Hereby I propose a strategy matrix at pre-alliance stage, and discuses tactics that allows the latecomers firms to benefits from asymmetric relationships with its bigger partners.In conclusion, this dissertation goes beyond the traditional alliance research which has predominantly focused on single alliances, propose a framework of how to build management capability at alliance portfolio level which balance the common value creation efficiency and private value appropriation efficiency in the long run. This dissertation further demonstrates the paradigm of modularity as a contextual factor that shapes a firm’s preference over alliance efficiency in the short run, broaded the scope of modularity research and alliance portfolio research. Last but not least, the methodology of building and maintaining asymmetric alliance portfolio has been fully explored, provides insights on latecomer firm’s competitive strategy.