Cognitive mapping the topic of strategic alliance

Cognitive mapping the topic of strategic alliance

Joseph Kim-keung Ho

Independent Trainer

Hong Kong, China

Abstract: The topic of strategic alliance in the subject of Business Management is complex. By making use of the cognitive mapping technique to conduct a brief literature review on the strategic alliance topic, the writer renders a systemic image on the topic of strategic alliance. The result of the study, in the form of a cognitive map on strategic alliance, should be useful to those who are interested in the topics of cognitive mapping, literature review and strategic alliance.

Key words: Strategic alliance, cognitive mapping, literature review

Introduction

As a topic in Business Management, strategic alliance is complex. It is thus useful to employ some learning tool to conduct its study, notably for literature review purpose. For a teacher in research methods, systems thinking and management, the writer is specifically interested in finding out how the cognitive mapping technique can be employed to go through a literature review on  strategic alliance. This literature review exercise is taken up and reported in this article.

On the cognitive mapping exercise for literature review

Literature review is an important intellectual learning exercise, and not just for doing final year dissertation projects for tertiary education students. On these two topics of intellectual learning and literature review, the writer has compiled some e-learning resources. They are the Managerial intellectual learning Facebook page and the Literature on literature review Facebook page. Conducting literature review with the cognitive mapping technique is not novel in the cognitive mapping literature, see Eden and Simpson (1989), Eden, Jones and Sims (1983), Open University (n.d) and the Literature on cognitive mapping Facebook page. In this article, the specific steps involved in the cognitive mapping exercise are as follows:

Step 1: gather some main points from a number of academic journal articles on Strategic alliance. This result in the production of a table (Table 1) with the main points and associated references.

Step 2: consolidate  the main points from Table 1 to come up with a table listing the cognitive map variables (re: Table 2).

Step 3: link up the cognitive  map variables in a plausible way to produce a cognitive map (re: Figure 1) on the topic under review.

The next section applies these three steps to produce a cognitive map on strategic alliance.

Descriptions of cognitive map variables on the strategic alliance topic

From the reading of some academic articles on Strategic alliance, a number of main points (e.g., viewpoints, concepts and empirical findings) were gathered by the  writer. They are shown in Table 1 with explicit referencing on the points.

Table 1: Main points from the strategic alliance literature and referencing

Main points from the strategic alliance literature	Referencing
Point 1: "Strategic alliances among organizations have grown dramatically during the past two decades (Harrigan, 1986; Gomes-Casseres, 1996; Vanhaverbeke and Noorderhaven, 2002; Larrson et al., 2003). For example, the number of public alliance announcements in the US grew from 100 in 1984 to more than 3,000 in 1994. There are many explanations for such growth, most of which relate to the benefits stemming from the firms’ ability to utilize alliance activity to access complementary assets in a flexible, focused, and fast manner".	Arend, R.J. and R. Amit. 2005. "Selection in Strategic Alliance Activity: Effects on Firm Performance in the Computing Industry" European Management Journal 23(4), Pergamon: 361-381.
Point 2: "As strategic alliances among organizations have multiplied, a substantial body of research on strategically important inter-organizational ties has developed. Researchers have been exploring a broad range of questions through a variety of sociological, organizational, and economic perspectives. Much of that research focuses on the implications of strategic alliances on the performance of firms engaging in such relationships (e.g. Gulati et al., 2000; Kale et al., 2002).".	Arend, R.J. and R. Amit. 2005. "Selection in Strategic Alliance Activity: Effects on Firm Performance in the Computing Industry" European Management Journal 23(4), Pergamon: 361-381.
Point 3: "Too often, alliances are formed without sufficient thought  being given to the strategic purpose for alliance. The thought process is often no more than: "We have a great product. They have a great distribution channel. We should partner-up." Or,  "Everyone else in our industry seems to be forming strategic  alliances. We'd better find a partner of our own.".	Pietras, T. and C. Stormer. 2001. "Making Strategic Alliances Work" Business & Economic Review, July-September: 9-12.
Point 4: "An increasing number of organizations are coming together to address complex societal issues. Most intentional, inter-organizational collaboratives (i.e., strategic alliances) articulate the collaborative effort as the primary method for achieving ideal short and/or long-term goals that would not otherwise be attainable as entities working independently. For example, school violence is one of the most pressing and complex concerns that our communities face today. Research suggests that school violence prevention, intervention, and response are most effective when a web of community organizations come together in creative and collaborative ways".	Gajda, R. 2004. "Utilizing Collaboration Theory to Evaluate Strategic Alliances" American Journal of Evaluation 25(1), Elsevier: 65-77.
Point 5: "Although collaboration has the capacity to empower and connect fragmented systems for the purposes of addressing multifaceted social concerns, its definition is somewhat elusive, inconsistent, and theoretical. In its overuse, the term “collaboration” has become a catchall to signify just about any type of inter-organizational or inter-personal relationship, making it difficult for those seeking to collaborate to put into practice or evaluate with certainty".	Gajda, R. 2004. "Utilizing Collaboration Theory to Evaluate Strategic Alliances" American Journal of Evaluation 25(1), Elsevier: 65-77.
Point 6: "Strategic alliances—contractual asset pooling or resource exchange agreements between firms—have become a topic of considerable interest to scholars of organizations. Because alliances are now prevalent in many industries, and because they inherently challenge the notion that organizations are discretely bounded entities, researchers have labored to understand the antecedent conditions that lead to interfirm collaboration. Particularly in high-technology sectors, alliances appear to have become a routine strategic initiative".	Stuart, T.E. 1998. "Network Positions and Propensities to Collaborate: An Investigation of Strategic Alliance Formation in  a High-technology Industry" Administrative Science Quarterly 43: 668-698.
Point 7: "Most of the work seeking to understand interfirm differences in propensities to establish alliances has asked. What motivates an organization to form an alliance? Oriented by this question, the literature has, with notable exceptions, developed and tested attribute-based explanations of the formation of interorganizational coalitions".	Stuart, T.E. 1998. "Network Positions and Propensities to Collaborate: An Investigation of Strategic Alliance Formation in  a High-technology Industry" Administrative Science Quarterly 43: 668-698.
Point 8: "Network theorists have previously investigated the structural antecedents of interfirm alliances. Scholars working within the "embeddedness" perspective associated with Granovetter (1985) have argued that an established network of interorganizational relationships is a resource that facilitates the establishment and governance of future alliances".	Stuart, T.E. 1998. "Network Positions and Propensities to Collaborate: An Investigation of Strategic Alliance Formation in  a High-technology Industry" Administrative Science Quarterly 43: 668-698.
Point 9: "Excessive persistence with poorly performing alliance may, in many cases, prove more costly to firms than premature alliance termination...... Alliance are often difficult to form,  making managers reluctant to walk away quickly after protracted and expensive negotiations.... If alliances are viewed as critical for corporate advantage, as numerous books and articles suggest, persistence becomes almost like peer pressure".	Inkpen, A.C. and J. Ross. 2001. "Why Do Some Strategic Alliances Persist Beyond Their Useful Life?" California Management Review 44(1) Fall: 132-148.
Point 10: "Any discussion of a knowledge-based approach to alliance management must be based on several truths..... *If managed correctly, alliance can significantly increase a company's financial returns..... *Companies form R&D alliances, not simply to reach short-term financial milestones, but to observe, learn and internalize the know-how of their partners.... *An alliance knowledge management capability is both an important component of alliance success and a differentiating factor....".	Parise, S. and L. Sasson. 2002. "Leveraging knowledge management across strategic alliances" Ivy Business Journal March/April: 41-47.
Point 11: "Strategic alliances are critical to organizations for a number of key reasons: 1. Organic growth alone is insufficient for meeting most organizations' required rate of growth. 2. Speed to market is of the essence, and partnerships greatly reduce speed to market. 3. Complexity is increasing, and no one organization has the required total expertise to best serve the customer".	Conzalez, M. 2001. "Strategic Alliances: the right way to compete in the 21st century" Ivy Business Journal September/ October: 47-51.
Point 12: "Although strategic motives and partner selection criteria have become popular research themes in the examination of international strategic alliances (ISAs), little prior research has specifically investigated the perspective of local partners (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004; Luo, 2002; Yan & Gray, 1994) in order to provide a detailed analysis of Chinese firms. Consequently, what we know about the strategic motives and partner selection criteria of Chinese firms is often derived from the potentially biased viewpoint of foreign multinational enterprises (MNEs)".	Dong, L. and K.W. Glaister. 2006. "Motives and partner selection criteria in international strategic alliances: Perspectives of Chinese firms" International Business Review 15, Elsevier: 577-600.
Point 13: "There is no overarching theory of ISAs [international strategic alliances] that explains the use of this cooperative, hybrid form of organisational arrangement. Different theoretical perspectives identify several of the same strategic motives for ISA formation, while some of the motives overlap".	Dong, L. and K.W. Glaister. 2006. "Motives and partner selection criteria in international strategic alliances: Perspectives of Chinese firms" International Business Review 15, Elsevier: 577-600.
Point 14: "The resource-based view of the firm suggests there is a technological gap between firms from emerging markets and firms from developed markets, with the former seeking access to multiple forms of technological capabilities from the latter (Hitt et al., 2000). Yan and Gray (1994, p. 1492) state that ‘‘the foreign firms contributed more heavily than their local partners in the areas of technology (product design, manufacturing know-how, and special equipment) and global support (technical, marketing, and maintenance services), and the Chinese firms contributed more in the areas of knowledge about skills for dealing with the local government and other institutional infrastructures’’.".	Dong, L. and K.W. Glaister. 2006. "Motives and partner selection criteria in international strategic alliances: Perspectives of Chinese firms" International Business Review 15, Elsevier: 577-600.
Point 15: "A strategic alliance might be viewed as a lesser form of a merger. It is not a merger per se, since alliance partners remain separate business entities and retain their decision-making autonomy. While merger activities have slowed down significantly since 2000, strategic alliances are increasingly, and widely, used by firms. They are particularly prevalent in network-oriented industries such as airline, shipping, telecommunications, multimodal transportation and logistics industries".	Zhang, A. and Y. Zhang. 2006. "Rivalry between strategic alliances" International Journal of Industrial Organization 24, Elsevier: 287-301.
Point 16: "Alliances are formed for many specific reasons, such as entering new markets, reducing manufacturing costs, developing and diffusing new technologies rapidly (Walters, Peters, & Dess, 1994) and learning new management and partnering skills (Medcof, 1997). The popularity of alliances is growing (Lambe, Spekman, & Hunt, 2002) at the expense of other forms of investment such as whole ownership, mergers or acquisitions".	Hyder, A.S. and L.T. Eriksson. 2005. "Success is not enough: The spectacular rise and fall of a strategic alliance between two multinationals" Industrial Marketing Management 34, Elsevier: 783-796.

With a set of main points collected, the writer produces a set of cognitive map variables. These variables are informed by the set of main points from Table 1. These variables are presented in Table 2.

Table 2: Cognitive map variables based on Table 1

Cognitive map variables	Literature review points
Variable 1: Drivers of interest in strategic alliance	Point 1: "Strategic alliances among organizations have grown dramatically during the past two decades (Harrigan, 1986; Gomes-Casseres, 1996; Vanhaverbeke and Noorderhaven, 2002; Larrson et al., 2003). For example, the number of public alliance announcements in the US grew from 100 in 1984 to more than 3,000 in 1994. There are many explanations for such growth, most of which relate to the benefits stemming from the firms’ ability to utilize alliance activity to access complementary assets in a flexible, focused, and fast manner". Point 16: "Alliances are formed for many specific reasons, such as entering new markets, reducing manufacturing costs, developing and diffusing new technologies rapidly (Walters, Peters, & Dess, 1994) and learning new management and partnering skills (Medcof, 1997). The popularity of alliances is growing (Lambe, Spekman, & Hunt, 2002) at the expense of other forms of investment such as whole ownership, mergers or acquisitions".
Variable 2: Improve intellectual understanding of strategic alliance	Point 2: "As strategic alliances among organizations have multiplied, a substantial body of research on strategically important inter-organizational ties has developed. Researchers have been exploring a broad range of questions through a variety of sociological, organizational, and economic perspectives. Much of that research focuses on the implications of strategic alliances on the performance of firms engaging in such relationships (e.g. Gulati et al., 2000; Kale et al., 2002).". Point 5: "Although collaboration has the capacity to empower and connect fragmented systems for the purposes of addressing multifaceted social concerns, its definition is somewhat elusive, inconsistent, and theoretical. In its overuse, the term “collaboration” has become a catchall to signify just about any type of inter-organizational or inter-personal relationship, making it difficult for those seeking to collaborate to put into practice or evaluate with certainty". Point 6: "Strategic alliances—contractual asset pooling or resource exchange agreements between firms—have become a topic of considerable interest to scholars of organizations. Because alliances are now prevalent in many industries, and because they inherently challenge the notion that organizations are discretely bounded entities, researchers have labored to understand the antecedent conditions that lead to interfirm collaboration. Particularly in high-technology sectors, alliances appear to have become a routine strategic initiative". Point 7: "Most of the work seeking to understand interfirm differences in propensities to establish alliances has asked. What motivates an organization to form an alliance? Oriented by this question, the literature has, with notable exceptions, developed and tested attribute-based explanations of the formation of interorganizational coalitions". Point 8: "Network theorists have previously investigated the structural antecedents of interfirm alliances. Scholars working within the "embeddedness" perspective associated with Granovetter (1985) have argued that an established network of interorganizational relationships is a resource that facilitates the establishment and governance of future alliances". Point 10: "Any discussion of a knowledge-based approach to alliance management must be based on several truths..... *If managed correctly, alliance can significantly increase a company's financial returns..... *Companies form R&D alliances, not simply to reach short-term financial milestones, but to observe, learn and internalize the know-how of their partners.... *An alliance knowledge management capability is both an important component of alliance success and a differentiating factor....". Point 13: "There is no overarching theory of ISAs [international strategic alliances] that explains the use of this cooperative, hybrid form of organisational arrangement. Different theoretical perspectives identify several of the same strategic motives for ISA formation, while some of the motives overlap". Point 15: "A strategic alliance might be viewed as a lesser form of a merger. It is not a merger per se, since alliance partners remain separate business entities and retain their decision-making autonomy. While merger activities have slowed down significantly since 2000, strategic alliances are increasingly, and widely, used by firms. They are particularly prevalent in network-oriented industries such as airline, shipping, telecommunications, multimodal transportation and logistics industries".
Variable 3: Effective strategic alliance practices	Point 4: "An increasing number of organizations are coming together to address complex societal issues. Most intentional, inter-organizational collaboratives (i.e., strategic alliances) articulate the collaborative effort as the primary method for achieving ideal short and/or long-term goals that would not otherwise be attainable as entities working independently. For example, school violence is one of the most pressing and complex concerns that our communities face today. Research suggests that school violence prevention, intervention, and response are most effective when a web of community organizations come together in creative and collaborative ways". Point 9: "Excessive persistence with poorly performing alliance may, in many cases, prove more costly to firms than premature alliance termination...... Alliance are often difficult to form,  making managers reluctant to walk away quickly after protracted and expensive negotiations.... If alliances are viewed as critical for corporate advantage, as numerous books and articles suggest, persistence becomes almost like peer pressure". Point 11: "Strategic alliances are critical to organizations for a number of key reasons: 1. Organic growth alone is insufficient for meeting most organizations' required rate of growth. 2. Speed to market is of the essence, and partnerships greatly reduce speed to market. 3. Complexity is increasing, and no one organization has the required total expertise to best serve the customer". Point 14: "The resource-based view of the firm suggests there is a technological gap between firms from emerging markets and firms from developed markets, with the former seeking access to multiple forms of technological capabilities from the latter (Hitt et al., 2000). Yan and Gray (1994, p. 1492) state that ‘‘the foreign firms contributed more heavily than their local partners in the areas of technology (product design, manufacturing know-how, and special equipment) and global support (technical, marketing, and maintenance services), and the Chinese firms contributed more in the areas of knowledge about skills for dealing with the local government and other institutional infrastructures’’.".
Variable 4: Learn from strategic alliance practices	Point 3: "Too often, alliances are formed without sufficient thought  being given to the strategic purpose for alliance. The thought process is often no more than: "We have a great product. They have a great distribution channel. We should partner-up." Or,  "Everyone else in our industry seems to be forming strategic  alliances. We'd better find a partner of our own.". Point 12: "Although strategic motives and partner selection criteria have become popular research themes in the examination of international strategic alliances (ISAs), little prior research has specifically investigated the perspective of local partners (Hitt, Ahlstrom, Dacin, Levitas, & Svobodina, 2004; Luo, 2002; Yan & Gray, 1994) in order to provide a detailed analysis of Chinese firms. Consequently, what we know about the strategic motives and partner selection criteria of Chinese firms is often derived from the potentially biased viewpoint of foreign multinational enterprises (MNEs)".

The next step is to relate the cognitive map variables to make up a cognitive map on strategic alliance. The cognitive map and its explanation are presented in the next section.

A cognitive map on strategic alliance and its interpretation

By relating the four variables identified in Table 2, the writer comes up with a cognitive map on strategic alliance, as shown in Figure 1.

These cognitive  map variables, four of them altogether, are related to constitute a systemic image of strategic alliance. The links in the cognitive map (re: Figure 1) indicate direction of influences between variables. The + sign shows that an increase in one variable leads to an increase in another variable while a -ve sign tells us that in increase in one variable leads to a decrease in another variable.  If there no signs shown on the arrows, that means the influences can be positive or negative.  For further information on strategic alliance, readers are referred to the Literature on strategic alliance Facebook page.

Concluding remarks

The cognitive mapping exercise captures in one diagram some of the main variables involved in strategic alliance. The resultant cognitive map promotes an exploratory way to study strategic alliance in a holistic tone. The experience of the cognitive mapping exercise is that it can be a quick, efficient and entertaining way to explore a complex topic such as strategic alliance in Business Management. Finally, readers who are interested in cognitive mapping should also find the article informative on this mapping topic.

Bibliography

1.      Arend, R.J. and R. Amit. 2005. "Selection in Strategic Alliance Activity: Effects on Firm Performance in the Computing Industry" European Management Journal 23(4), Pergamon: 361-381.

2.      Conzalez, M. 2001. "Strategic Alliances: the right way to compete in the 21st century" Ivy Business Journal September/ October: 47-51.

3.      Dong, L. and K.W. Glaister. 2006. "Motives and partner selection criteria in international strategic alliances: Perspectives of Chinese firms" International Business Review 15, Elsevier: 577-600.

4.      Eden, C. and P. Simpson. 1989. "SODA and cognitive mapping in practice", pp. 43-70, in Rosenhead, J. (editor) Rational Analysis for a Problematic World, Wiley, Chichester.

5.      Eden, C., C. Jones and D. Sims. 1983. Messing about in Problems: An informal structured approach to their identification and management, Pergamon Press, Oxford.

6.      Gajda, R. 2004. "Utilizing Collaboration Theory to Evaluate Strategic Alliances" American Journal of Evaluation 25(1), Elsevier: 65-77.

7.      Hyder, A.S. and L.T. Eriksson. 2005. "Success is not enough: The spectacular rise and fall of a strategic alliance between two multinationals" Industrial Marketing Management 34, Elsevier: 783-796.

8.      Inkpen, A.C. and J. Ross. 2001. "Why Do Some Strategic Alliances Persist Beyond Their Useful Life?" California Management Review 44(1) Fall: 132-148.

9.      Literature on cognitive mapping Facebook page, maintained by Joseph, K.K. Ho (url address: https://www.facebook.com/Literature-on-cognitive-mapping-800894476751355/).

10. Literature on literature review Facebook page, maintained by Joseph, K.K. Ho (url address: https://www.facebook.com/literature.literaturereview/).

11. Literature on strategic alliance Facebook page, maintained by Joseph, K.K. Ho (url address: https://www.facebook.com/Literature-on-strategic-alliance-440287293021417/).

12. Managerial intellectual learning Facebook page, maintained by Joseph, K.K. Ho (url address: https://www.facebook.com/managerial.intellectual.learning/).

13. Open University. n.d. "Sign graph" Systems Thinking and Practice (T552): Diagramming, Open University, U.K. (url address: http://systems.open.ac.uk/materials/T552/) [visited at April 10, 2017].

14. Parise, S. and L. Sasson. 2002. "Leveraging knowledge management across strategic alliances" Ivy Business Journal March/April: 41-47.

15. Pietras, T. and C. Stormer. 2001. "Making Strategic Alliances Work" Business & Economic Review, July-September: 9-12.

16. Stuart, T.E. 1998. "Network Positions and Propensities to Collaborate: An Investigation of Strategic Alliance Formation in  a High-technology Industry" Administrative Science Quarterly 43: 668-698.

17. Zhang, A. and Y. Zhang. 2006. "Rivalry between strategic alliances" International Journal of Industrial Organization 24, Elsevier: 287-301.