Factors Affecting Knowledge Sharing in Strategic Alliances

220 Pages·2012·0.95 MB·English

Ekonomi och samhälle
Economics and Society
Skrifter utgivna vid Svenska handelshögskolan
Publications of the Hanken School of Economics
Nr 238
Khalid M. Bhatti
Factors Affecting Knowledge Sharing
in Strategic Alliances

The Role of Knowledge Sharing as Strategic Control Behavior
among Multinational Enterprises
Helsinki 2011
<
Factors Affecting Knowledge Sharing in Strategic Alliances: The Role of Knowledge
Sharing as Strategic Control Behavior among Multinational Enterprises
Key words: knowledge, knowledge sharing, cooperative alliance partners, strategic
alliances
© Hanken School of Economics & Khalid M. Bhatti
Khalid M. Bhatti
Hanken School of Economics
Department of Management and Organisation
P.O.Box 287, 65101 Vaasa, Finland
Distributor:

Library
Hanken School of Economics
P.O.Box 479
00101 Helsinki, Finland

Telephone: [phone]
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ISBN 978-952-232-151-0 (printed)
ISBN 978-952-232-152-7 (PDF)
ISSN 0424-7256
Edita Prima Ltd, Helsinki 2011
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Dedicated to my parents
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ACKNOWLEDGEMENTS
I would like to take the time to mention other individuals who were directly or
indirectly involved in the joys and challenges of writing my doctoral dissertation.
First, I would like to thank my supervisor Professor Sören Kock who gave me the
opportunity to come to Hanken and start this research project. I extend a special
thanks to him for providing administrative and professional support during the years
and his valuable comments on my thesis draft. Further, I would like convey my deepest
appreciation to my second supervisor, Professor Pervez Ghauri, Kings College London,
University of London for providing critical inputs for finalizing questionnaires and
reading my thesis draft several times.
It is also a privilege to have had Professor Amjad Hadjikhani from Uppsala University,
Sweden and Professor Ulf Elg from Lund University, Sweden as the pre-examiners for
my work. Their valuable comments helped me to improve the overall quality of the
thesis. I am also honoured to have Professor Amjad Hadjikhani as my opponent at the
forthcoming public defense.
I would also like thank my teachers, Professor Hasan Sohaib Murad, Mr. Farasat Ali,
Mr. Ghulam Farid and my uncle Mr. Salah-ud-din for their encouragement for higher
education.
Although writing a doctoral dissertation is a long and lonely journey, during the process
I encountered across wonderful people. During my second year in Finland I met Mr.
Anthony Okuogume and Ms. Heli Itkonen. Both welcomed me as visiting faculty
member at Kajaani University of Applied Sciences where I have been teaching for
several years. It was a great experience to know Mr. Anthony Okuogume in both
professional and private capacities. I would also like to thank my colleagues Mats and
Åsa for their friendship during these years. It was also a wonderful experience to meet
Dr. Örjan Andersson in both professional and private capacities. I would also like to
convey my special thanks to the Mr. Loïc Liétar, Mr. Juhani Rummukainen, Mr. Juhani
Kalanti and Mr. Anssi Örn who were interviewed for this study. Further, I would like to
thank John Shepherd and Ethan H. Jordan for proof reading of my thesis. I would also
like to thanks my friends Hans, Sheraz, Kashif, Ihsan, Hilal, Tahir, Akbar, Asif and
Nadeem for being with me in this journey.
This thesis would not have been possible without the financial support from the
following foundations and organizations: Nissi Foundation, Foundation of Economic
Education, Foundation of Marcus Wallenberg, Finnish Graduate School in
International Business, Higher Education Commission of Pakistan.
I would like to convey a special appreciation to my parents Mushtaq Ahmad Bhatti and
Tahira Mushtaq, who always embrace the value of positive attitude in life and their
unconditional love. Dear Abu Jaan and Ami Jaan now it is the time to send you a copy
of my dissertation as you are not able to travel for Finland to attend my PhD public
defense. Furthermore, I would like to mention about my brother Zahid and sisters
Sadia, Asma and Ambreen who were always in contact with their best wishes for me.
Additionally, I would also like to mention my aunts, Dr. Farida and Dr. Tayyiba, who
have been role models in the family for pursuing higher education. Farida khala your
unconditional support and love throughout the research process has been a great asset.
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Finally, I would like to thank my wife Saba Khalid for her endless support during the
difficult time in a new country Finland. She finished her own PhD along with taking
care of all family responsibilities. I also appreciate our son Usman for being so
independent while both parents were busy with their professional commitments.
Usman, I know you have been waiting for the day of my PhD public defense. The young
baby boy Farzan who filled our life with happiness is with us when my PhD research
project coming to an end.

Vaasa Finland, October 10th, 2011.
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CONTENTS
1 INTRODUCTION....................................................................................... 1
1.1. Background of the study ....................................................................................... 1
1.2. Key terms of the study .......................................................................................... 4
1.3. Research question and research objectives ......................................................... 7
1.4. Positioning, contribution and limitations of the study ....................................... 9
1.5. Structure of the study .......................................................................................... 17
2 THEORETICAL APPROACHES TO FIRM BOUNDARIES DECISION20
2.1. Transaction cost economics and the firm’s boundary decisions ....................... 20
2.2. Critical analysis of transaction cost economics theory ...................................... 22
2.3. Network approach and firm boundary decisions .............................................. 22
2.4. Critical analysis of network approach ................................................................ 25
2.5. Resource dependency theory and firm boundary decisions ............................. 27
2.6. Critical analysis of resource dependency theory ............................................... 30
2.7. Combining knowledge based perspective and resource dependency theory ... 31
3 KNOWLEDGE SHARING AND INTER-FIRM CONTROL IN
STRATEGIC ALLIANCES ...................................................................... 34
3.1. Knowledge sharing in inter-firm cooperation ................................................... 34
3.2. Knowledge sharing in JV strategic alliances ...................................................... 37
3.3. Knowledge-based perspective of strategic alliance inter-firm knowledge
sharing ................................................................................................................. 39
3.4. Strategic alliances and inter-firm control .......................................................... 42
3.5. Types of control in JV and contractual alliances ............................................... 45
4 KNOWLEDGE SHARING FACTORS AND INTER-FIRM CONTROL
BEHAVIOR IN STRATEGIC ALLIANCES ............................................. 47
4.1. Scope of focal-firm strategy in unstable environments ..................................... 49
4.2. Collaborating on the firm’s relationship and resources characteristics ........... 53
4.2.1. Perceived business network uncertainty ............................................... 54
4.2.1.1. New technology application ................................................... 56
4.2.1.2. Competitors strategic actions ................................................. 56
4.2.1.3. Risk of knowledge spillovers via cooperative partners .......... 57
4.2.2. Perceived resource deficiency ................................................................ 59
4.2.2.1. Complementary knowledge .................................................... 60
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4.2.2.2. Relationship with key customers and competitors ................ 61
5 RESEARCH METHODOLOGY .............................................................. 65
5.1. Introduction ........................................................................................................ 65
5.2. Philosophical stance of the study ....................................................................... 65
5.2.1. Constructivism as a methodological tradition ...................................... 66
5.2.2. Realism and constructivism ................................................................... 68
5.2.3. Critical realism ....................................................................................... 69
5.3. Research strategy and design ............................................................................. 70
5.3.1. Abduction ................................................................................................ 71
5.3.2. Qualitative approach .............................................................................. 73
5.3.3. Case study approach ............................................................................... 75
5.4. Empirical research process ................................................................................. 77
5.4.1. Data analysis ........................................................................................... 82
5.4.1.1. Analyzing case studies: the traditional approach .................. 83
5.4.1.2. Utilizing Nvivo for analyzing interview data ......................... 85
5.5. Selected case and related industry description.................................................. 87
5.5.1. STMicroelectronics’s Strategic Alliances analyzed in the study ........... 95
5.5.1.1. ST- International semiconductor development alliance
(ISDA) ..................................................................................... 95
5.5.1.2. ST-Ericsson JV alliance .......................................................... 97
5.5.1.3. ST-Nokia contractual vertical alliance ................................... 99
6 CASE EVIDENCE .................................................................................. 101
6.1. Perceived Business Network uncertainly as relationship characteristics ........ 101
6.1.1. Finding new technology applications .................................................. 102
6.1.2. Competitors’ strategic actions ............................................................. 103
6.1.3. Knowledge spillover ............................................................................. 105
6.2. Perceived resources deficiency as resource characteristics ............................. 105
6.2.1. Partners’ complementary knowledge .................................................. 107
6.2.2. Relationship with customers and/or competitors .............................. 108
6.3. Views from the alliance partners of STMicroelectronics.................................. 110
6.3.1. ST-Nokia Alliance .................................................................................. 110
6.3.2. ST-Ericsson Alliance ............................................................................. 112
6.4. Partnership characteristics and control behavior ............................................ 114
6.4.1. Relationship based control ................................................................... 114
6.4.2. Resource-based control ......................................................................... 118
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7 DISCUSSION AND CONCLUSIONS ................................................... 122
7.1. Results of the study ........................................................................................... 122
7.1.1. Partnership characteristics and control behavior ............................... 126
7.1.1.1. Relationship based control .................................................... 127
7.1.1.2. Resource based control ......................................................... 128
7.2. The conclusions in relation to previous studies................................................ 131
7.3. Summary of the study ....................................................................................... 132
7.4. Managerial implications ................................................................................... 136
7.5. Suggestions for future research ......................................................................... 137
REFERENCES .......................................................................................... 139

APPENDICES
Appendix 1 Interview guide for first interview at STMicroelectronics .................. 185
Appendix 2 Interview guide for second interview at STMicroelectronics .............. 191
Appendix 3 Interview guide for interview with STMicroelectronics-Nokia
Alliance ........................................................................................................... 197
Appendix 4 Interview guide for interview with STMicroelectronics- Ericsson
Alliance ........................................................................................................... 201
Appendix 5 Nvivo use in linkage interview data at the analysis stage .................. 205

TABLES
Table 1 Forms of strategic alliances analyzed in the dissertation ................................ 7
Table 2 Theoretical Explanations of Inter-organizational Relationships .................... 11
Table 3 Potential advantages of Participating in Inter-organizational
Relationships .................................................................................................... 14
Table 4 Comparison of Resource Dependency and TCE Perspectives ....................... 31
Table 5 Object and types of control for different inter-firm cooperative ventures. ... 52
Table 6 Abduction research approach in the present study ........................................ 73
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Table 7 Data collection timeline ................................................................................... 79
Table 8 Case study analysis .......................................................................................... 85
Table 9 JV for joint development ................................................................................. 98
Table 10 JV Complementary areas of focus and key competencies .............................. 98

FIGURES
Figure 1 Relationship between need for knowledge sharing and degree of control ...... 2
Figure 2 Strategic needs of partners ................................................................................ 3
Figure 3 Relationship between partners' characteristics and strategic motives ........... 4
Figure 4 Theoretical foundations of Inter-organizational Relationships ..................... 10
Figure 5 Inter-organizational relationships in a vertical alliance ................................. 16
Figure 6 Inter-organizational relationships in a horizontal alliance ............................ 16
Figure 7 Structure of the study ...................................................................................... 18
Figure 8 Network model ................................................................................................. 24
Figure 9 The four modes of organizing economic activity ............................................ 26
Figure 10 Theoretical framework ..................................................................................... 63
Figure 11 The zone of constructivist methodology ......................................................... 69
Figure 12 Process of Nvivo use in linkage interview data at the analysis stage ............ 87
Figure 13 Vertical JV alliances and M&As to build partnerships for future growth ..... 91
Figure 14 Horizontal alliances for advancing in process R&D partnerships ................. 93
Figure 15 ISDA Horizontal Alliance around IBM ........................................................... 96
Figure 16 The ST-Ericsson JV strategic alliance deal ..................................................... 97