Alliance Organization and Technological Performance: Dissaggregating the Causes and Consequences of Ownership and Co-location

Abstract: A fundamental question in strategic management is whether and how the choice of organization affects firms’ abilities to develop capabilities important to performance. Transaction Cost Economics and the Knowledge–Based View represent two prominent perspectives applied to address this question. These two logics differ in their statement of the problem and their proposed solution, however. This paper applies a problem-solving perspective in the context of alliances to explore variance in both exchange problems and organizational mechanisms emphasized by these theories. After identifying four distinct types of business problems and four distinct types of alliance forms, we propose that the influence of specific alliance arrangements on performance is dependent on the nature of the underlying economic activity. Based on a sample of 664 alliances in the semiconductor industry and a two-stage analysis, we find that the exchange scope and problem difficulty of alliance activities affect the selection of alliance forms that vary in their provision of underlying cross-ownership and coordination mechanisms as well as subsequent technological performance.