Strategies of Cooperation: Managing Alliances, Networks, and Joint Ventures

470 Pages·2005·3.32 MB·English

by  John Child

Cooperative Strategy
‘Theauthorshaveprovidedanambitiousoverviewofthecooperativestrategyliterature.
Thebookwillbewelcomedbyseriousstudentsandscholarsfocussedonthisimportant
phenomenon.’
Paul W. Beamish, Canada Research Chair in International Business, Ivey Business
School,UniversityofWesternOntario
‘Thisbookprovidesacomprehensive,well-organizedandrichlyillustratedanalysisof
inter-firmcooperation.Whilerelevantformanagersandbusinessstudents,itextensively
draws on the most up-to-date research, making it also a valuable source for academics
studyingstrategicalliancesandthewidearrayofmanagementissuestheyraise.Child,
Faulkner, and Tallman have done a remarkable job of putting together in a highly
consistent way all the knowledge available on what has become an essential facet of
businessdevelopment,namelyCooperativeStrategy.’
Pierre Dussauge, Professor of Strategic Management, HEC – School of Management,
Paris
‘Ihighlyrecommendthisbookforalliancescholarsandpractitioners.Thebreadthof
coverageofthepracticalandtheoreticalliteratureoncooperativestrategyisoneofthe
book’sprimarycontributions.Theauthorsdemonstrateacomprehensiveunderstanding
ofthesubjectmatterandthenumerouscasestudiesdemonstrateacloseconnectionwith
actualexperience.’
AndrewInkpen,J.KennethandJeanetteSewardChairinGlobalStrategy,Thunderbird,
TheGarvinSchoolofInternationalManagement
‘Companiesneedtoknownotjusthowtocompetewithotherfirms,buthowtoco-
operate with them. The proliferation of joint ventures, partnerships, and strategic alli-
ances reflect the increasingly dispersed and networked structure of modern business
organisation.
Thisbookisamanager’sguidetothissignificanttrend.Inparticularitemphasizesthe
importance of not merely building co-operative structures but of making them work,
bothnationallyandacrossborders,tobringbenefitstoalltheparticipants.’
Frances Cairncross, Rector, Exeter College, Oxford and former Management Editor,
TheEconomist
‘In today’s environment, alliances and networks provide essential building blocks to
access dispersed capabilities as well as end markets. As such, they have far-reaching
implications for strategy, organization, and managerial skill sets. John Child, David
Faulkner,andSteveTallmanhaveskilfullyconnectedtheoryandday-to-daypracticeto
offer a guide to some of the most important decisions and processes managers must
handle.’
JeffreyJ.Reuer,AssociateProfessorofStrategy,UniversityofNorthCarolina
‘Broad in scope and rich in detail, Cooperative Strategy is a great primer for both
academicsandpractitioners.’
ProfessorOdedShenkar,FordMotorCompanyChairinGlobalBusinessManagement,
FisherCollegeofBusiness,TheOhioStateUniversity
Cooperative
Strategy
John Child, David Faulkner
and
Stephen B. Tallman
1
3
GreatClarendonStreet,Oxfordox26dp
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(cid:1)JohnChild,DavidFaulknerandStephenB.Tallman2005
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Firstpublished2005
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ISBN0-19-926624-7 978-0-19-926624-1
ISBN0-19-926625-5(Pbk) 978-019-926625-8(pbk)
13579108642
n CONTENTS
ACKNOWLEDGEMENTS vii
LISTOFFIGURES viii
LISTOFTABLES x
LISTOFBOXES xi
LISTOFABBREVIATIONS xii
1. Introduction 1
PartI TheNatureofCooperationanditsRoleinStrategy 15
2. EconomicPerspectives 17
3. ManagerialandOrganizationalPerspectives 33
4. TrustinCooperativeStrategies 50
PartII EstablishingCooperation 71
5. Motives 75
6. PartnerandFormSelection 96
7. NegotiationandValuation 123
8. Networks 145
9. TheVirtualCorporation 164
PartIII ManagingCooperation 191
10. GeneralManagement 193
11. Control 214
12. CorporateGovernanceofJointVentures 248
13. OrganizationalLearning 271
14. HumanResourceManagement 303
15. Culture 328
16. EmergingEconomies 359
vi CONTENTS
PartIV PerformanceandEvolution 381
17. AlliancePerformance 383
18. TheEvolvingAlliance 399
PartV Conclusion 419
19. ClosingReflections 421
INDEX 431
n ACKNOWLEDGEMENTS
Allbooksbenefitfromthesupportandforbearanceofferedbyagreatmanypeopleand
thisoneisnoexception. Ourfamiliesgraciouslytoleratedthetimethatpreparationof
CooperativeStrategytookfromthem. Wearealsoindebtedtoourcolleaguesandstudents
fortheencouragementandsupporttheyofferedtowardthepreparationofthisbook.
John Child owes special thanks to George Frynas with whom he taught cooperative
strategytotheBirminghamBusinessSchool’sMBAandMBA(InternationalBankingand
Finance) programmes. Also to Rehan ul-Haq and Suzana Rodrigues who share a keen
interest in the subject. As always Jane Whitmarsh gave invaluable office support just
whenitwasmostneeded.
David Faulkner owes much to discussions with his former colleagues at the Said
BusinessSchoolintheUniversityofOxford,aswellastonewcolleaguesatRoyalHollo-
way, University of London. He hasdeveloped manyinsights into cooperative strategy
andthesocialnatureofstrategicalliancesthroughworkingwithMarkdeRond,nowat
theJudgeInstituteinCambridge.
SteveTallmanthankshiscolleaguesonthefacultyandstaffoftheDavidEcclesSchool
of Business at the University of Utah, and particularly colleagues in the Management
Department,whichhechairedatthetimethiswaswritten. ThanksespeciallytoMichelle
Young, Robin Mullins, Teresa Wright, Karin Fladmoe-Lindquist, Bill Hesterly, Anoop
Madhok,andAnupamaPhenefortheirsupportduringthatbusytime.
Thisbookisasignificantextensionandimprovementoveritspredecessor,Strategiesof
Cooperation.ThisowesmuchtothewaysinwhichDavidMussonandMatthewDerby-
shireatOxfordUniversityPressfacilitatedtheprocessofcooperationbetweenitsauthors
onbothsidesoftheAtlantic.
JohnChild
ChairofCommerce
BirminghamBusinessSchool
UniversityofBirmingham
DavidFaulkner
ProfessorofStrategy&DirectoroftheMBA
SchoolofManagement
RoyalHolloway,UniversityofLondon
StephenB.Tallman
E.ClaiborneRobinsDistinguishedProfessorofBusiness
RobinsSchoolofBusiness
UniversityofRichmond,Virginia
n LIST OF FIGURES
1.1 Differentcombinationsofcooperationandcompetition 3
1.2 Themovetowardsthefederatedenterprise 5
1.3 Alliancedevelopment,astracedthroughthebook 9
4.1 Phasesofalliancedevelopmentandtheevolutionoftrust 61
6.1 Themake–buy–allymatrix 100
6.2 Thestrategicfit–culturalfitmatrix 102
6.3 TheculturewebofaUKclearingbank 105
6.4 Theculturalprofile 106
6.5 Thetwofundamentalmotivesforcooperativestrategy 110
6.6 Classificationofnetworkorganizations 112
6.7 Expansionoptionsandtypesofpartnership 115
6.8 Thethreetypesofalliancesbetweencompetitors 117
7.1 Possiblenegotiationoutcomes 126
7.2 Themanagerialgridofnegotiatingpossibilities 127
8.1 Levelofascendingintegrationofcooperativeforms 153
8.2 Patternofcommunicationinakeiretsu 156
8.3 Thetypicalpatternofcommunicationinanequal-partnernetwork 157
9.1 Competitionandcooperationdonotdependonownershippatterns 171
9.2 Autonomousandsystemicinnovationsrequiredifferenthandling 186
10.1 Typicalnetofrelationshipsofanalliancegeneralmanager 199
11.1 Fourwaysofdividingcontrolbetweenjointventurepartners 220
11.2 Apartner’schoiceofalliancecontrolpolicyinthelightofcontingencies 235
12.1 AnalyticalframeworkforcorporategovernanceinIJVs 260
13.1 Organizationallearningloopsatthreelevels 275
13.2 Determinantsoflearninginandfromalliances 283
14.1 TheHRMcycle 306
LISTOFFIGURES ix
15.1 Culturecontrastedwithothersourcesofhumanthinkingandbehavior 329
15.2 Fouroptionsinthemanagementofculturaldiversityinalliances 344
16.1 Areasofharmonybetweendevelopedandemergingeconomyalliancepartners 371
16.2 Conflictingprioritiesbetweendevelopedandemergingeconomypartners 371
18.1 Alife-cyclemodelofallianceevolution 403
18.2 Developmentofinter-partnercooperation 404
18.3 Theprocessofallianceevolution 414