Building Social Capital and Creating Value Developing and Managing Strategic Alliances

2004 Michael A. Hitt, R. Duane Ireland and Michael D. Santoro. When strategic alliances provide firms with access to new knowledge, complementary resources, new markets and new technologies that facilitate their ability to learn, build and enhance resources and capabilities and enlarge their strategic network, they can be a source of competitive advantage. Because of the value created by these outcomes, strategic alliances, as a type of cooperative strategy, are being widely used on a global basis. However, because approximately 50 per cent of strategic alliances fail, a better understanding is needed regarding the effective development and management of these collaborative ventures. Using resource-based, social capital and knowledge-based theories, we offer a conceptual framework that emphasizes the development and management of strategic alliances. The capability that results when the firm is able to create value by how it develops and manages strategic alliances is based on alliance scope, partner selection and resource configuration, optimization and exploitation. In addition, we argue that managing alliances is integrated with social capital to affect the creation of value. We conclude the chapter by examining implications of our model and by providing direction for future research.

Developing and Managing Strategic Alliances, Building Social Capital and Creating Value Chapter