A strategic contingency model for technology alliance

Published date01 June 2005
DOIhttps://doi.org/10.1108/02635570510599995
Pages623-644
Date01 June 2005
AuthorTeresa L. Ju,Shu‐Hui Chen,Chia‐Ying Li,Tien‐Shiang Lee
Subject MatterEconomics,Information & knowledge management,Management science & operations
A strategic contingency model for
technology alliance
Teresa L. Ju
Department of Information Management, Shu-Te University, Kaohsinn,
Taiwan, Republic of China
Shu-Hui Chen and Chia-Ying Li
Department of Business Administration, National Cheng Kung University,
Tainan, Taiwan, Republic of China, and
Tien-Shiang Lee
Department of International Trade, Kun-Shan University of Technology,
Tainan, Taiwan, Republic of China
Abstract
Purpose – Based on theories of organizational learning and strategic considerations, this study aims
to develop a strategic contingency model for technology alliance and identify how alliance-specific
factors, strategic factors, and organizational capability factors influence firms to acquire competencies
and competitive advantages through technology alliance.
Design/methodology/approach – A six-page, 94-item survey questionnaire was developed and
mailed to top-level managers of the semiconductor firms in Taiwan. A total of 63 valid responses were
received.
Findings – The study results indicate that firms with higher absorption orientation, higher risk
reduction orientation, higher R&D scale economy orientation, and higher top management team
experiences tend to perform better in acquiring competitive advantages. In addition, the strategic fit
between strategic factors, organizational capability factors and technology alliance choice could lead
firms to better competitive advantage.
Research limitations/implications Although the results of this study are fruitful, several
suggestions could be made for academicians and business practitioners. First, the respondent rate of
this study is low and could be improved. Second, in addition to the strategic contingency model as
developed in this study, more research factors could be further investigated. Third, more case studies
could be conducted to reconfirm the results of this study.
Originality/value – The major contribution of this study is to investigate what critical factors
would influence the choice of a technology alliance model, and what effects the influencing factors
have on the relationship between a technology alliance model and the intended competency
development. The results of this study provide very important references for academicians and
practitioners to investigate the effectiveness of technology alliance.
Keywords Competitive advantage, Contingencyplanning, Organizations
Paper type Research paper
1. Research motivations and objectives
The development of the internet has brought a significant impact on the global
economy and changed the way businesses compete. This impact has made today’s
corporate management aware as never before that technological innovation on a global
scale is transforming the competition landscape. However, due to increasing global
competition, rising cost of technological development and rapid technological
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/0263-5577.htm
A strategic
contingency
model
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Industrial Management & Data
Systems
Vol. 105 No. 5, 2005
pp. 623-644
qEmerald Group Publishing Limited
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DOI 10.1108/02635570510599995
diffusion, firms have been pushing for ever-shorter product and service life cycles.
Firms, especially in high-tech industry, are recognizing that they must turn to all
sources of innovations to improve development cycle time (Gupta and Thomas, 2001).
Thus, the acquisition of external technology through various inter-firm relationships
has become a strategic issue, critical for the firms’ survival. Based on suc h rationale, in
the contemporary firms with both domestic and foreign partners, there is a great
momentum behind the growth in inter-firm collaborations and technology transfer
(Robertson and Gatignon, 1998; Barringer and Harrison, 2000). More and more
technology alliances have been announced (Anderson, 1990; Parkhe, 1993; Weaver and
Dickson, 1997), and recognized by top management as an increasingly important facto r
in sustaining competitive advantages and corporate growth.
Traditionally, a firm prefers entering a cooperative arrangement to achieve specific
benefits that were peripheral to the strategic priorities of the partner firms (Doz and
Hamel, 1998). The reluctance to collaborate on strategically important activities
stemmed from the fear of trading off proprietary expertise and giving away trade
secrets. As a result, the focus of inter-firm cooperation and technology transfer
research has been on the nature of the relationships and the mechanisms that firms use
to gain collaboration advantages and protect their proprietary resources. Recently,
many firms have been increasingly willing to participate in strategic technology
alliance, even with their main competitors. This increase is motivated by combining
their respective strengths in the area of intellectual property as well as each company’s
complementary distinct core competencies, so to respond to the growing needs of
customers with quick turnaround time and cost-effective manufacturing.
However, stepping back and taking a broad view of the literature on strategic
technology alliance causes a degree of discomfort. While a majority of studies focus on
the potential advantages and disadvantages of such inter-firm relationships, little
attention is devoted to the factors influencing the choice of alliance model that
participating firm commits its resources. Moreover, much of the existing literature
aims to explain the choice of alliance model based on only a single theoretical
perspective, such as the transaction cost approach (Williamson, 1991; Denecamp, 1995;
Hagedoorn and Narula, 1996) or the resource-based perspective (Tsang, 1997; Das and
Teng, 1998a, b, 2000). Rather surprisingly, little has been done on establishing a
contingency model based on a multi-faceted view (Osborn and Hagedoorn, 1997). Thus,
two major research objectives are in this study. First, using the technology alliance
model proposed by Horton and Richey (1997), this study intends to identify
alliance-specific, strategic and organizational factors relevant to technology alliance to
gain competitive advantages. Second, this study also tries to understand the
performance implications of technology alliance empirically with quantitative surveys.
2. Literature review
2.1 Theoretical background
An important decision that the management of a high-tech company pursuing strategic
alliances has to make is what kind of competitive advantage it desires in a given
market. Once alliances were viewed from a singular perspective based on a
researcher’s host discipline, but now scholars are focusing on developing a more
multifaceted view (Osborn and Hagedoorn, 1997). A dominant paradigm proposed by
Horton and Richey (1997) has pointed out that a contingency model of technology
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