chapter  17
17 Pages

Alliance Networks

The network view on alliances states that fi rms are embedded in a set of interfi rm linkages between multiple parties. Whereas alliance portfolios only consider the set of direct relationships between a fi rm and its partners, alliance networks also involve indirect relationships: the set of relationships between a fi rm and third parties intermediated by the fi rm’s alliance partners. An alliance network functions as a repository of knowledge, resources and information, and can potentially enhance a fi rm’s competitive advantage. However, an alliance network also involves (social) obligations, interdependencies and lock-in effects, which threaten a fi rm’s autonomy and control. Therefore, from the perspective of a focal fi rm, an alliance network increases management complexity and coordination costs. The extent to which network benefi ts outweigh costs depends on a fi rm’s strategic intent, its position in the alliance network and its ability to infl uence network processes and outcomes. As the opening two sections of this chapter explain, this cost-benefi t balance makes it critical to understand the nature of alliance networks, as well as the role of a fi rm’s network position and how a fi rm can leverage its position to its advantage. Taking the alliance network view as a reference point, the third section also presents managerial guidelines, and concludes with a summary and a case illustration.