Online ISSN 1347-4456 Print ISSN 1347-4464

ABAS: Annals ofBusiness Administrative
ScienceVol. 1, No. 1, April 2002

TAKAHASHI, N.

1

WI, John H.

9HELLER, Daniel A.

17

The degree of self-determination and job satisfaction of white-collar workers inJapanese firms.

Organization strategy of established firms for adapting to a change in productarchitecture: The dynamic management of subunits inside an organization.

Learning from a strategically allied firm: Incorporating a teaching perspective.

http://www.gbrc.jp© 2002 Global Business Research CenterAnnals of Business Administrative Science
Vol.1, No. 1, April 2002

CHIEF EDITOR

Junjiro Shintaku

University of TokyoEDITORIAL BOARD

Makoto Abe
University of Tokyo
Takahiro Fujimoto University of Tokyo
Makoto Kasuya
University of Tokyo
Hotaka Katahira
University of Tokyo
Nobuo Takahashi University of Tokyo
Technical Editor: Maki Nishida, Global Business Research Center

Annals of Business Administrative Science is published quarterly in January, April,
July, and October, by Global Business Research Center, Marunouchi, Chiyoda-ku, Tokyo,
JAPAN. http://www.gbrc.jp

Annals of Business Administrative Science Vol.1 (April 2002)

Learning from a Strategically Allied Firm:
Incorporating a Teaching Perspective
Daniel A. HELLER
Graduate School of Economics, University of Tokyo
E-mail: danielh@grad.e.u-tokyo.ac.jp

Abstract: In order to more accurately represent the inter-firm learning process in a
strategic alliance, this paper argues that, under certain conditions, it is necessary toincorporate a teaching perspective. A framework that does so is proposed and tested
by a case-study analysis. Case findings largely support the framework.
Keywords: strategic alliance, inter-firm learning, competence acquisition

1. Introduction

interactions. In other words, to more accurately

Learning competencies from a partner is an

represent

important area of inquiry in the strategic alliancesometimes it is necessary to consider the other side

literature (Doz & Hamel, 1998; Hamel, 1991).

of the learning transaction, namely, the competence

However,ofsource, as a teacher. Better representation of thiscompetence acquisition is still at an early stage, asinter-firm linkage serves as an initial step inthe research has largely focused on only one side offurthering understanding of the learning transaction

the learning transaction, namely, the competence

and suggests ways it may be improved.

understanding

of

the

processthe competenceacquisition

process,acquirer, or learner.
This short paper argues that when allied firms

2. Two-Sided Learning Transaction

actively support each other's learning goals, it isDefining learning is difficult because the word isnecessary to incorporate a teaching perspective into

used to refer to a variety of subjects, for example, thethe analysis of inter-partner learning in order toacquisition of existing knowledge (i.e., a product),

capture the actual dynamics of the cross-firm

the development of experiential meaning (i.e., a17Heller
process), and a deliberate testing of ideas foror long-term, that is expected to ultimately lead to a

problem solving (i.e., a function) (Smith, 1982). Thisnet financial gain. The ability to teach can bepaper is concerned with the first of these uses.

considered the possession of valuable competencies

Furthermore, the paper generally focuses itsthat are somehow reproducible by the firm.

attention on the learning transaction itself, as

In andragogy, the learner's acquisition of

opposed to the goals or aims of the transaction. Thisknowledge is assumed to be based on a number ofmirrors a primary line of investigation of thefactors including: the need to know why learning isliterature on andragogy, the theory of adult learning

needed, the self-concept of being responsible for(Knowles, Holton, & Swanson, 1998).

one's own decisions, one's accumulated experience,

The paper seeks to investigate a two-sided

one's readiness to learn, the perception of efficacy oflearning transaction between firms, one that consists

learning, and the motivation to learn (Knowles,of firms as teachers and learners. The two sides are

Holton, & Swanson, 1998). Among these items,

discussed in turn below from three angles: function,

motivation has been the subject of considerable

motivation, and ability.

attention (for example, Wlodkowski, 1999). This isResearch on andragogy generally considers theunderstandable, as Walberg and Uguroglu (1980)

teacher to be a facilitator of learning, in other words,

have found that without a motivation to learn, therea process manager and content resource, rather thanwill be no learning.

a content transmitter (see, for example, Knowles,

For firms, the motivation to learn can be1981). This contrasts with the description inconsidered the profit-incentive, as in the case of thepedagogy of an active teacher, who encourages

motivation to teach. The ability to learn can be

students to seek to learn and makes innovative

considered to be a firm's absorptive capacity (see,changes in teaching methods to adjust to different

Cohen & Levinthal, 1990).

learning styles (see, Armstrong, Henson, & Savage,

The objects of teaching/learning considered in1997). Nevertheless, this latter characterization ofthis paper are competencies of a firm. The use of thethe teacher is helpful in that it draws attention to theterm competencies here differs slightly from that ofimportant area of learner motivation, which will be

Prahalad and Hamel (1990) and Hamel and Doz

considered shortly.

(1998). In this paper, firm competencies, that is, theTurning first to the motivation to teach, in thecollective learning in an organization and thecontext of a strategic alliance between for-profit

abilities of a firm to coordinate diverse skills andfirms, motivation can be considered as stemming

technologies, are not viewed as limited to productivefrom the perception of some reciprocal benefit which

domains. Rather, the concept is extended tocan be gained by doing so, whether in the short-term

administrative functions, such as, marketing, finance,18

Learning from a Strategically Allied Firm
1995; Hamel 1991).

and human resource management, where collective
learning and abilities to coordinate skills andIn many cases, such a characterization is correct.

technologies are equally critical to successful

Direct competitors, even when engaged in an

corporate management.

alliance of convenience, naturally do not want toCompetencies can be considered to be firm

help each other any more than they have to,resources that are based on organizational routines,

especially not in the form of sharing their valuable

as discussed in Nelson and Winter (1982). This typecompetencies. But what about the case when firmsof resource will typically be difficult to imitate (orengage in little or no direct competition and neither

replicate, see, Kogut & Zander, 1992) due toside can reasonably foresee this changing? For

path-dependency, causally ambiguity, and social

example, such a situation may be the result of thecomplexity (see, Barney, 1997).

allied firms being in very different industries or thesame industry but in different regions or targeting

Thus, it is expected that competencies aredifferent consumer segments in the same region.

difficult to learn. Hence, it should be attractive tofirms to have a facilitator of competence learning.

When competition between firms is lessCompetence learning is defined as the acquiring ofhead-to-head, then it is more likely that firms willcompetencies from a partner. Competence teachingsupport their partner’s learning goals and serve as

is defined as any assistance given to facilitate

active learning facilitators, provided doing so willcompetence learning.

allow a firm to engage in its own inter-firm learning
and/or receive other forms of benefits from its

3. Partner as Learning Facilitator

partner.

The discussion of inter-firm learning in the alliance

In cases where there is a partner that serves as aliterature generally focuses most of its attention onlearning facilitator, it is possible to gain a deeper

the acquiring, or learning, side. The use of the term

understanding of the learning transaction by“learning” itself is indicative of this orientation, as

incorporating findings of the educational literature,theas described previously, into the discussion ofterm

itselfemphasizes

theperson(orlearning between allied firms.

organization) in which a change occurs or is
expected to occur (Boyd, Apps et al., 1980). Anotherreason behind the focus on the learner, or acquirer, is

4. A Teaching/Learning Frameworkthat the source firm in the learning transaction is

A model of inter-partner learning that incorporates

typically viewed as a rival or potential rival, andcompetence teaching is introduced below.

thereby unwilling, or at best, reluctant, to facilitate

Figure 1 depicts a two-firm alliance between aits partner’s learning efforts (Bleeke & Ernst, 1993,

hypothetical Firm 1 and Firm 2.
19

Heller

5. Case Analysis
Figure 1: Inter-firm teaching and learning

An in-depth interview-based case study that was
conducted by the author with over 20 active andcompetence learning

retired managers is used as a critical case to test the

Firm 1framework proposed in Section 4. (For details on
this research method, see Yin, 1994.) The allied

competence
teaching

benefits

benefits

competence
teaching

companies, Firm A and Firm B, are from the same
manufacturingindustry

thoughtheyareheadquartered in different countries, both are
Firm 2internationally active, and their products generally
target distinct customer segments. The main findings

competence learningof the case study are shown in Figure 2.
Firms A and B correspond to Firms 1 and 2 inBlue lines show flow of benefits.

the framework. Throughout the history of the

Red lines show flow of knowledge.

alliance considered here, Firm A has been muchlarger than Firm B in total monetary sales per year.
This fact has been represented in Figure 2, by Firm A

The two allied firms are assumed to possessbeing drawn as a larger circle than Firm B. The twocomplementary class-leading competencies, which

firms

have

also

they continue to build and thus which remaincomplementary industry-leading competencies. Firm

competitive. Also, it is assumed that the firms will

A’s competence strengths lie in what can bedesire to learn these competencies from each other.

considered more strategic areas—namely, marketing,Potential benefits which will be accrued to the firms

finance, and human resource development. Firm B's

in exchange for facilitating learning may include

competence strengths lie in what can be considered

reciprocal competency learning from a partner,

more operational areas—namely, manufacturing,financial gains, and so forth.

engineering, and efficiency in product development.
Throughout

Thus, the proposition that follows from theremainedthehistory

inofpossession

the

of

allianceframework is that when the above conditions are

considered here, Firm A has held a minority

present in an alliance, there will be competence

equity-stake in Firm B. Phase 1 begins with theteaching by the partners to facilitate each other’spurchase of the equity stake. For Firm A, theachievement of inter-firm learning goals.

purchase was motivated in part by a desire to acquirecompetence learning from Firm B. Firm B, on the20

Learning from a Strategically Allied Firmother hand, accepted the equity purchase to alleviatecompetence learning goals in a number of ways. For

an ongoing financial crisis at the firm that had been

example, short-term teams were sent to visit Firm B

caused by some strategic missteps that were thenwith the explicit purpose of learning. Firm A also

amplified by an external shock.

invited Firm B to set up one of its manufacturing

In addition, there were various opportunities forfacilities, which was then run by Firm A. Desiring to

the firms to engage in mutually beneficial productcontinue to be able to pursue the opportunities fromand market initiatives. During Phase 1, the firms

which it was benefiting, Firm B actively engaged in

exploited a number of these opportunities, including

competence teaching of Firm A to assist in its

the joint development of products, component supply,

partner’s learning efforts, in some cases, even going

andbeyond what was expected by Firm A.

original-equipment-manufacturing,among

Phase 2 gradually developed after a number ofothers.

years. Firm A’s learning from Firm B waned, andAlso, in Phase 1, Firm A strongly pursued its
Figure 2. Teaching and
Learning in Case

competence
teaching

Blue lines show flow of benefits.
Red lines show flow of knowledge.
Dotted line indicates a decreased flow.

Firm A
competence
learning

benefits

competence
teaching
waningbenefits

Firm B

Firm A
competence
learning
waningbenefits
waningPhase 1

benefits

Firm B

Phase 2competence
teaching
re-establishedFirm A
competence
learning
re-establishedcompetence
teaching

benefits
re-establishedbenefits

Firm B

Phase 3competence learning

21

Heller
research interviews suggested that this was due infinancial difficulties, the firm still possessedlarge part to decreased motivation in Firm A to seek

numerous operational

to learn from Firm B. Consequently, competence

superior to those of Firm A. The decision was madeteaching by firm B also decreased.

to strengthen alliance ties, with Firm A eventuallycompetencies

that

were

raising its equity stake in Firm B.

Firm A’s lower motivation to learn from Firm B
can be attributed to Firm A having successfully

Phase 3 began when Firm A decided to increase

learned numerous operational competencies over theits equity stake in Firm B. Subsequently, Firm A

course of Phase 1. Indications are that this learningsought to help Firm B improve its more strategic

was due in large measure to competency teaching bycompetences

Firm B, in addition to other forms of organizational

executives to work inside Firm B for extended

learning at Firm A. As a result, Firm A managed toperiods of time. The functional areas of expertise of

improve dramatically its operational performance.

the dispatched managers corresponded to Firm A’sThus, the perceived need to learn from Firm B

strategic strengths—most notably, marketing anddecreased, as the gap between the two firms’

finance. In addition, the dispatches also started some

operational competencies was perceived to havehuman resource development initiatives.

bydispatching

managers

andeither narrowed considerably, or in some cases, even

In Phase 3, Firm A also renewed its efforts tobeen reversed. Since it viewed its learning goals as

learn from Firm B. However, these efforts were notlargely accomplished, Firm A was consideringfound to be as systematic or widespread as they had

whether or not to continue the alliance relationship.

been in Phase 1.

Developments at Firm B pressed the issue.

6. Discussion

A new financial crisis began to emerge for Firm
B, again caused by strategic miscalculations

Incorporating insights from the educational literatureamplified by an external shock. Firm B increasingly

into the discussion on inter-partner learning, resulted

needed the ongoing support of Firm A and actively

in the development in Section 4 of a new framework

sought closer alliance ties. It was not until this point

for inter-partner learning, which holds that whenthat Firm B was strongly motivated to seek to learn

allied firms are supportive of each other's learningcompetencies from Firm A. To encourage Firm A togoals and stand to benefit from facilitating astrengthen the alliance ties, Firm B granted Firm A

partner’s learning, there will be competencevery broad access inside the firm so that Firm A

teaching.

could verify that Firm B still possessed class-leadingThis framework was tested in Section 5 using acompetencies. As a result of these inquiries, Firm A

case that met the specified conditions. The

was able to confirm that indeed, despite Firm B’sframework was largely supported by the case22

Learning from a Strategically Allied Firmfindings. In both firms, indications and examples of

and

other

industries

witheach firm having taught competencies to its partner

product/industry characteristics.

comparable

were found. However, one of the firms was found tohave only engaged in competence teaching in the

Acknowledgements

latter part of the observed alliance period. The firms

The author would like to thank Takahiro Fujimoto

alternately played the roles of teacher and learner,(Professor, University of Tokyo) for his invaluable

depending on the competency.

advice concerning some of the key concepts of theThus, the framework introduced in the paper

paper. Gratitude is also extended to the Academic

can help explain what is happening in the real world

Association for Organizational Science (in Japanese,and may suggest ways in which the learning process

Soshiki Gakkai), which hosted a national conference

can be improved. Nevertheless, numerous limitations

in June 2000 at Shiga University in Japan, where an

to the study exist.

earlier version of this paper was presented andFirstly,

betterspecification

of

the

term

numerous helpful comments were received.

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