Abstract:
Research summary
The literature on technological alliances emphasizes that search for knowledge drives alliance formation. However, in conceptualizing technological knowledge, prior work on alliances has not made a distinction between domain knowledge–knowledge that firms possess in distinct technological domains–and architectural knowledge–knowledge that firms possess about how to combine elements from different technological domains. We argue that firms seek partners that are similar in domain knowledge to deepen their knowledge and partners that are dissimilar in architectural knowledge to broaden their knowledge. Our results indicate that the likelihood of alliance formation increases when two firms are similar in domain knowledge and dissimilar in architectural knowledge. Further, our results show that these effects are positively moderated by the degree of decomposability of a firm’s knowledge base.

Managerial summary
In dynamic environments, companies need to continually deepen and broaden their technological knowledge, and they often look for alliance partners who can provide them that knowledge. For knowledge deepening, companies are more likely to form alliances with those companies that have expertise in similar technological fields. For knowledge broadening, they are more likely to form alliances with those companies that have expertise in the same technological fields but have different recipes for combining knowledge from those fields. Furthermore, a company with a modular knowledge base is more likely to seek a partner that has expertise in similar technological fields or whose recipes for combining knowledge from different technological fields are different from the recipes it has.

Authors’ Names: Sai Yayavaram, Manish K. Srivastava and MB Sarkar

Journal Name: Strategic Management Journal

Publication Details: 9 March 2018

URL: https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.2791