Significant changes have been taking place within the international business environment since the early 1980s. One of the most striking areas of change involves the prevailing patterns in global competition. In particular, the nature of global competition is being transformed by the growing number of strategic alliances among firms from different countries as well as within countries. Although such ventures are intrinsically difficult to manage and involve sensitive technology protection issues, many experts argue that as business risks soar and international competition grows more intense, alliances among firms from different countries will continue to expand as a "natural" strategic response to the multiple uncertainties and growing turbulence in the emerging global business setting. 1

What makes these alliances strategically important is that many of them, whether equity-based or not, involve some form of technology transfer or collaborative R&D activities. While alliances may involve joint marketing arrangements or distribution agreements, in the majority of cases that have been examined by scholars, some form of cross-national transfer of technology is usually involved. In the past, most instances of technology transfer were unidirectional in nature, with the firm that developed the technology providing its know-how to other international users in return for licensing fees, royalties, products, or equity.2 Today, we are witnessing a trend toward bidirectionality, whereby both participants in the relationship respectively are willing to share some of their know-how with a counterpart firm. Moreover, even where there is an apparent imbalance in the technological capabilities of the two participating firms, the focus may be on bringing together what David Teece has called "complementary assets." In such an instance, the firms may be exchanging "respective distinctive competencies," such as manufacturing for R&D.3