ABSTRACT
This chapter considers the dominant theoretical perspectives adopted to investigate alliances. Alliances are formed as an efficient response to conditions where transactions cannot be easily conducted through market contracts, but the transaction costs of an alliance are not so high as to mandate internal organization. P. W. Beamish and N. C. Lupton point out that in research on cooperative strategies transaction cost economics has been used in two general ways: in studying the choice between different modes of foreign direct investment, and in minimizing transaction costs within a particular agreement. Contrasting with networks, the emphasis of alliance portfolios is on the focal organization and how it manages all of the one-to-one relationships simultaneously. Networks as a unit of analysis have become increasingly important in understanding the value creation and competitive advantage of firms. The resource-based view of the firm argues that differential firm performance is fundamentally due to firm heterogeneity.
