Collaborative Patterns and Power Imbalance in Strategic Alliance Networks
Publication: Journal of Construction Engineering and Management
Volume 140, Issue 6
Abstract
Firms are connected with other firms through a variety of economic relationships that can be viewed as a form of social network. Resource-dependency theory (RDT) suggests that formal joint ventures among firms occur as a result of resource procurement, perceived strategic interdependence, expansion opportunities, legitimacy, and risk mitigation. A key unexplored element of RDT is the collaborative structure among firms with technical capabilities subordinate to their alliance partners and whether such structures are able to leverage sufficient market power to influence the industry sector within which they exist. Using the network characteristics of alliance partners in a technology- and capital-intensive industry sector, this work empirically examines the aggregate market power of so-called generalist firms. Collaborative patterns in the resources and mining sector and their impact on firm performance and resource quality are investigated using social network analysis. It is found that firms engaged in strategic alliances outperform firms operating independently; however, beyond a certain number of alliance partners, their performance declines. It was also found that, in aggregate, generalist nontechnical alliance partners can exercise significant market power in dense alliance networks, despite possessing almost no technical industry experience.
Get full access to this article
View all available purchase options and get full access to this article.
References
Ahuja, G. (2000). “Collaboration networks, structural holes, and innovation: A longitudinal study.” Admin. Sci. Q., 45(3), 425–455.
Ahuja, M. K., Galletta, D. F., and Carley, K. M. (2003). “Individual centrality and performance in virtual R&D groups: An empirical study.” Manage. Sci., 49(1), 21–38.
Anderson, D. (1987). An analysis of Japanese coking coal procurement policies: The Canadian and Australian experience, Centre for Resource Studies, Queens Univ., Kingston, Ontario, Canada.
Anderson, E. (1990). “Two firms, one frontier: On assessing joint venture performance.” Sloan Manage. Rev., 31(2), 19–30.
Anvuur, A. M., and Kumaraswamy, M. M. (2007). “Conceptual model of partnering and alliancing.” J. Constr. Eng. Manage., 225–234.
Badger, W. W., and Mulligan, D. E. (1995). “Rationale and benefits associated with international alliances.” J. Constr. Eng. Manage., 100–111.
Berg, S. V., Friedman, P., and Duncan, J. (1982). Joint venture strategy and corporate innovation, Olgeschlagen, Gunn and Hain, Cambridge, U.K.
Bonacich, P. (1972). “Factoring and weighing approaches to status scores and clique identification.” J. Math. Sociol., 2(1), 113–120.
Bonacich, P. (1987). “Power and centrality: A family of measures.” Am. J. Sociol., 92(5), 1170–1182.
Borgatti, S. P., Everett, M. G., and Freeman, L. C. (2002). Ucinet for windows: Software for social network analysis, Analytic Technologies, Harvard, MA.
Borgatti, S. P., Everett, M. G., and Shirley, P. R. (1990). “LS sets, lambda sets and other cohesive subsets.” Soc. Networks, 12(4), 337–357.
Burgers, W. P., Hill, C. W. L., and Kim, W. C. (1993). “A theory of global strategic alliances: The case of the global auto industry.” Strat. Manage. J., 14(6), 419–432.
Casciaro, T., and Piskorski, M. J. (2005). “Power imbalance, mutual dependence, and constraint, absorption: A close look at resource dependence theory.” Admin. Sci. Q., 50(2), 167–199.
Chinowsky, P., Diekmann, J., and Galotti, V. (2008). “Social network model of construction.” J. Constr. Eng. Manage., 804–812.
Chinowsky, P., and Taylor, J. E. (2012). “Networks in engineering: An emerging approach to project organization studies.” Eng. Proj. Organ. J., 2(1–2), 15–26.
de Nooy, W., Mrvar, A., and Batageli, V. (2005). Exploratory social network analysis with Pajek, Cambridge University Press, Cambridge, U.K.
Di Marco, M., Taylor, J., and Alin, P. (2010). “Emergence and role of cultural boundary spanners in global engineering project networks.” J. Manage. Eng., 123–132.
Drees, J. M., and Heugens, P. P. M. A. R. (2013). “Synthesizing and extending resource dependence theory: A meta-analysis.” J. Manage., 39(6), 1666–1698.
Emerson, R. M. (1972). “Exchange theory. Part II: Exchange relations, exchange networks, and groups as exchange systems.” Sociological theories in progress, Vol. 2, J. Berger, et al., eds., Houghton-Mifflin, Boston, 58–87.
Everett, M. G., and Borgatti, S. P. (2005). “Ego network betweenness.” Soc. Networks, 27(1), 31–38.
Freeman, L. C. (1978). “Centrality in social concepts: Conceptual clarification.” Soc. Networks, 1(3), 215–239.
Galaskiewicz, J. (1985). “Interorganizational relations.” Annu. Rev. Sociol., 11(1), 281–304.
Giacobbe, F., and Booth, P. J. (2009). “Controlling international joint ventures: An investigation of Australian parent partners.” Aust. Account. Rev., 19(2), 103–116.
Girvan, M., and Newman, M. E. J. (2002). “Community structure in social and biological networks.” P. Natl. Acad. Sci., 99(12), 7821–7826.
Goldberg, A. I., Cohen, G., and Fiegenbaum, A. (2003). “Reputation building: Small business strategies for successful venture development.” J. Small Bus. Manage., 41(2), 168–186.
Granovetter, M. S. (1973). “The strength of weak ties.” Am. J. Sociol., 78(6), 1360–1380.
Gulati, R. (1998). “Alliances and networks.” Strat. Manage. J., 19(4), 293–317.
Gulati, R., and Gargiulo, M. (1999). “Where do networks come from?” Am. J. Sociol., 104(5), 1439–1493.
Hillman, A. J., Withers, M. C., and Collins, B. J. (2009). “Resource dependence theory: A review.” J. Manage., 35(6), 1404–1427.
Hirschman, A. O. (1964). “The paternity of an index.” Am. Econ. Rev., 54(5), 761–762.
Hubbell, C. H. (1965). “An input–output approach to clique identification.” Sociometry, 28(4), 377–399.
Katz, L. (1953). “A new index derived from sociometric data analysis.” Psychometrika, 18(1), 39–43.
Knoke, D., and Kuklinski, J. (1982). Network analysis, Sage, Beverly Hills, CA.
Kogut, B. (2000). “The network as knowledge: Generative rules and the emergence of structure.” Strat. Manage. J., 21(3), 405–425.
Levine, S., and White, P. E. (1961). “Exchange as a conceptual framework for the study of interorganizational relationships.” Admin. Sci. Q., 5(4), 538–601.
Ling, F. Y. L., Ibbs, C. W., and Chew, E. W. (2008). “Strategies adopted by international architectural, engineering, and construction firms in southeast Asia.” J. Prof. Issues Eng., 134(3), 248–256.
Nohria, N., and Garcia-Pont, C. (1991). “Global strategic linkages and industry structure.” Strat. Manage. J., 12(S1), 105–124.
Oliver, C. (1990). “Determinants of interorganizational relationships: Integration and future directions.” Acad. Manage. Rev., 15(2), 241–265.
Ozorhon, B., Arditi, D., Dikmen, I., and Birgonul, M. T. (2008). “Implications of culture in the performance of international construction joint ventures.” J. Constr. Eng. Manage., 361–370.
Park, C. U., and Han, J. (2001). “The structure of auto parts supply network of Korean auto industry.” Korean J. Sociol., 35(6), 1–27.
Park, H., Han, S. H., Rojas, E. M., Son, J. W., and Jung, W. (2011). “Social network analysis of collaborative ventures for overseas construction projects.” J. Constr. Eng. Manage., 344–355.
Pfeffer, J., and Nowak, P. (1976). “Joint venture and interorganizational interdependence.” Admin. Sci. Q., 21(3), 398–418.
Powell, W. W., White, D. R., Koput, K. W., and Owen-Smith, J. (2005). “Network dynamics and field evolution: The growth of interorganizational collaboration in the life sciences.” Am. J. Sociol., 110(4), 1132–1205.
Pryke, S. D. (2004). “Analysing construction project coalitions: Exploring the application of social network analysis.” Constr. Manage. Econ., 22(8), 787–797.
Rezgui, Y., and Miles, J. (2010). “Exploring the potential of SME alliances in the construction sector.” J. Constr. Eng. Manage., 558–567.
Sanaei, M., Javernick-Will, A., and Chinowsky, P. (2013). “The influence of generation on knowledge sharing connections and methods in construction and engineering organizations headquartered in the US.” Constr. Manage. Econ., 31(9), 991–1004.
Schilling, M. A., and Phelps, C. C. (2007). “Interfirm collaboration networks: The impact of large-scale network structure on firm innovation.” Manage. Sci., 53(7), 1113–1126.
Seabright, M. A., Levinthal, D. A., and Fichman, M. (1992). “Role of individual attachment in the dissolution of interorganizational relationships.” Acad. Manage. J., 35(1), 122–160.
Shan, W., and Hamilton, W. (1991). “Country-specific advantage and international cooperation.” Strat. Manage. J., 12(6), 419–432.
Sillars, D. N., and Kangari, R. (2004). “Predicting organizational success within a project-based joint venture alliance.” J. Constr. Eng. Manage., 500–508.
Taylor, J. E., Levitt, R., and Villarroel, J. A. (2009). “Simulating learning dynamics in project networks.” J. Constr. Eng. Manage., 1009–1015.
Wambeke, B. W., Liu, M., and Hsiang, S. M. (2011). “Using Pajek and centrality analysis to identify a social network of construction trades.” J. Constr. Eng. Manage., 1192–1201.
Wasserman, S., and Faust, K. (1997). Social network analysis: Methods and applications, Cambridge University Press, Cambridge, U.K.
West, J. M. (2012). “A comparative analysis of the future cost of electricity generation in OECD and non-OECD countries.” Electricity J., 25(1), 68–83.
Yu, J., Gilbert, B. A., and Oviatt, B. M. (2011). “Effects of alliances, time, and network cohesion on the initiation of foreign sales by new ventures.” Strat. Manage. J., 32(4), 424–446.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 140 • Issue 6 • June 2014
Copyright
© 2014 American Society of Civil Engineers.
History
Received: Apr 24, 2013
Accepted: Jan 13, 2014
Published online: Feb 25, 2014
Published in print: Jun 1, 2014
Discussion open until: Jul 25, 2014
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.