Knowledge Sharing in Alliances and Alliance Portfolios

We develop a model of knowledge sharing in alliances and alliance portfolios. We show that, once the issue of encouraging effective collaboration is put center stage, many standard intuitions of the learning race view and alliance portfolio literature are overturned or qualified. Partners engage in learning races in some cases, but exhibit “altruistic” behaviors in other cases. They may reduce their own absorptive capacity or increase the transparency of their own operations to facilitate their partner’s learning. In alliance portfolios, we show that not all substitutability between alliance portfolio partners is bad. We distinguish between substitutability in implementation and substitutability in rival benefits and show that the latter is conducive to knowledge sharing. Our work contributes toward putting the literature on learning alliances on a more solid foundation by emphasizing the importance of commitments that leading firms can make to encourage collaboration.

This paper was accepted by David Simchi-Levi, business strategy.