Managing Joint Innovation: How to balance trust and control in strategic alliances

313 Pages·2012·1.49 MB·English

by  Francis Bidault (auth.)

Managing Joint
Innovation
How to balance trust and control in
strategic alliances

Francis Bidault
Managing Joint Innovation
This page intentionally left blank
Managing Joint
Innovation
How to balance trust and
control in strategic alliances
Francis Bidault
Professor,
ESMTEuropeanSchoolofManagementandTechnology
Palgrave
macmillan
©FrancisBidault2012
Softcoverreprintofthehardcover1stedition2012978-0-230-27997-1
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10 9 8 7 6 5 4 3 2 1
21 20 19 18 17 16 15 14 13 12
C
ONTENTS
ListofFigures andTables vi
Preface ix
Chapter1 Theworldofalliances 1
Chapter2 Theeraofalliances 17
Chapter3 Cooperationcasualty 44
Chapter4 Relationalquality 62
Chapter5 Thelifeofanalliance 98
Chapter6 Strategyformulation andpartner
selection 129
Chapter7 Alliancenegotiation
andformation 159
Chapter8 Allianceoperationandturnaround 186
Chapter9 Alliancerecoveryandtermination 209
Chapter10 Monitoringrelationalquality 230
Conclusion 253
Appendix–INTOPIA: Alearningtoolfor
alliancemanagement 257
Notes 270
Index 285
v
F T
IGURES AND ABLES
Figures
1.1 Carelman’sdouble-handed axe 2
1.2 Cooperation asanalternative between
“make”and“buy” 6
1.3 Alliancesasanalternativebetweenmarkets
andhierarchy 7
1.4 Thevarietyofallianceforms 8
2.1 Thevaluenetwork 23
2.2 Organizational capabilities 26
2.3 Capabilitydevelopmentandcontribution
inalliances 29
2.4 Industry-financed R&Dexpenditures
(measuredasapercentageoftheGDP) 34
2.5 Numberofpatentsgrantedinthetriad
regions,1995–2005 36
2.6 Thesemiconductorindustry,1980–2010 37
2.7 Keyplayersintheopeninnovation model 39
3.1 A dynamic view ofkeyalliancesuccess
factors 58
4.1 Differentformsoforganization within
alliances 93
5.1 Theratesofterminationofjointventures 104
5.2 Thecycleofrelationalquality 117
5.3 Theevolutionofrelationalquality 121
5.4 Reasonsforrelationalqualitytodrift 124
6.1 Aframeworkforselectingbetweenmake,
buy,andally 137
6.2 Howalliancepartners fittogether 141
6.3 Horizontal,vertical,andunrelatedalliance
partners 143
vi
ListofFiguresandTables vii
6.4 Partners’ assetsandskillscontributions 145
6.5 Thenumberofpartnersandthebalanceof
power 148
6.6 Theformsofalliancegovernance 150
6.7 Thepyramidofalliances 153
6.8 Trust,control,andalliancegovernance
options 156
6.9 Governance optionsgiventhetypeof
uncertainty 157
7.1 Alliancesaswin-winarrangements 165
7.2 Thewin-winrange:thecaseoftechnology
licensing 166
7.3 Adynamicviewofrelationship building 172
7.4 TheFAcT-Mirrormethod 179
7.5 ThestepsoftheFAcT-Mirrormethod 180
7.6 Buildingrelationalqualityintheformation
phase 183
8.1 Acycleofrelationalqualitydeterioration 196
8.2 Rescuingrelationalqualityintheoperation
phase 206
9.1 Bottompairtrawling 217
9.2 Relationalqualityrecoveryoralliance
termination 221
9.3 Easyorhardexitfromalliances 225
9.4 Terminationtrajectories 227
10.1 Regularmonitoringofrelationalquality 233
10.2 Mutual trustandcreativity 235
10.3 Trustinthepartnerandinvestment 237
10.4 Controlandperformanceofalliances 239
10.5 Arelationalqualitydashboard 241
10.6 Amodelformonitoringrelationalquality 243
10.7 Thevariousstakeholdersinvolvedinthe
monitoring ofrelationalquality 245
10.8 Relationalqualitysurveytimeline 247
A.1 ThebusinesscontextofINTOPIA 263
A.2 Horizontal partnerships inINTOPIA 265
A.3 Verticalpartnerships inINTOPIA 265
viii ListofFiguresandTables
Tables
2.1 AsampleofCorning’sjointventures 19
4.1 Teamsvscommitteesinco-development
alliances 71
4.2 Themixoftrustandcontrol 92
5.1 Thenormal evolutionoftrustandcontrol
overtime 115
6.1 Optionsfordevelopingcorecapabilities 136
6.2 Conditionsforthestrategic andculturalfit 138
8.1 Mechanismsofrelationship repair 205
P
REFACE
The content of this book is primarily addressed to execu-
tivesandmanagerswhoare,oratsomepointintheircareers
will be, in charge of heading co-development alliances and
who are looking for a comprehensive framework on which
to base their actions, especially regarding interaction with
the partner firm and its staff. There is substantial evidence,
as will be shown in the first three chapters, that the quality
oftherelationshipbetweenpartnersisastrongdrivingforce
behind the success of alliances. In Chapter 2, we will define
thisconceptwithsufficientrigorandenoughpracticalityto
makeitavariable thatcanbemanaged.
The concepts and frameworks presented in this book are
based on solid academic references and are illustrated with
numerous case studies to highlight issues from an execu-
tive’s perspective. This book, however, is more than just
an attempt to summarize prior research. It contains orig-
inal propositions and attempts to offer a self-contained
framework that can serve to improve the management of
co-developmentalliances.
As can be expected, the idea of this book did not come
suddenly. It feels like I carried it over the many years since
I developed an interest in the study of strategic alliances.
Havingbeeninvolvedextensivelyinthewritingofcasestud-
ies for many years, I can easily trace the beginning of my
own personal journey in this fascinating world. It really
started in 1989 with field research on an alliance between
Digital Equipment Corporation and ITT with my old pal
TomCummings.
Since then, I have been involved in numerous projects, be
it research, courses, or management seminars. But three
projects have recently re-ignited my interest in alliances.
ix