The Relationship between Firm Strategic Profile and Alliance Partners' Characteristics

Rapidly changing competition, continuing technological innovation, shortening product life cycles, rising internationalization of markets and evolving customer preferences have led to greater numbers of strategic alliances and networks (Ohmae, 1989; Winter et al., 2003). These dramatic and simultaneous changes forced managers to realize that they may not have all the human, financial or technological resources necessary to respond effectively. Consequently, many managers are shifting their strategic focus away from preempting competition to a broader view of building competitive advantage through a selective and often simultaneous reliance on both collaboration and competition (Bartlett and Ghoshal, 1992; Brass et al., 2004; Gimeno, 2004). Ohmae claimed that "globalization mandates alliances, makes them absolutely essential to strategy" (1989: 143). Indeed, joint ventures and alliances are increasingly being perceived as critical elements of a corporation's business network and strategic weapons for competing within a firm's core markets and technologies (Bae and Gargiulo, 2004; Baum et al, 2000; Geringer, 1991; Harrigan, 1987). Furthermore, as companies expand internationally, the importance of government business partners and relationships often grows dramatically. This is particularly true for firms pursuing new technology who are trying to protect their intellectual property rights in other countries. Companies seeking to acquire foreign technology and/or competence must also navigate the shifting and turbulent waters of government regulations and restrictions. Moreover, foreign governments themselves are often the target partners through joint ventures with state-owned enterprises or as sources of capital and/or R & D funding (Rondinelli and Black, 2000). Certainly, these concepts are not new. Geringer (1988) was one of the first to examine partner selection in depth and found that both partner characteristics (national culture, past experience, structure, size) and task-related issues (technical know-how, access to markets, managerial experience, financial assets) were important components of partner selection. Nevertheless, despite Geringer's early analysis, Dacin, Hitt and Levitas (1997) stated almost ten years later, "While partner selection is an integral component of alliance (1) success, very little research has devoted explicit attention to this issue" (1997: 4). This study adds to the extant literature by examining how competitive strategy influences a firm's cooperative strategy, (i.e., with whom they are cooperating--suppliers, customers, etc.) and whether firms choose to develop relationships with their home or the host government. This has not been rigorously discussed in the partner selection literature. Therefore, a preliminary discussion on how a firm's competitive strategy influences its cooperative strategy when pursuing relationships within its business network is followed by the development of nine hypotheses regarding these relationships. The findings from a survey of 110 firms are then presented, and the survey's results are discussed. Competitive Strategies Firms can pursue various strategies to succeed in their competitive environment. Maidique and Patch (1982) outlined four business-level strategic types which are particularly useful when examining technology-related alliances (the test sample in this study). They discuss first mover, second mover or imitator, low-cost producer (LCP), and niche. First movers (first-to-market) try to gain an early, albeit temporary, monopoly in the market by introducing a new product before the competition. Consequently, innovation and R&D are critical to their success. Low-cost producers (cost-minimization) attempt to compete on the basis of relative cost advantages over competitors through economies of scale, overhead minimization, process improvements, etc. Second movers (fast-followers) are quick to copy innovations by others and try to gain customers by avoiding and improving upon competitors' mistakes. …