A Preliminary Typology of Learning in International Strategic Alliances.
Another recent development in the management arena is concerned with building up an organization's learning capability. It was predicted that "learning capability" and "learning organization" would become two key concepts of management thinking in the 1990s (Ulrich, Von Glinow, & Jick., 1993). Stata (1989, p. 64) even maintains that "the rate at which individuals and organizations learn may become the only sustainable competitive advantage, especially in knowledge-intensive industries."
The theme of learning in, or through, strategic alliances emerges from the above two developments. The ability of firms to seek, absorb, and transfer knowledge from their collaborative arrangements back to the parent companies becomes a crucial skill. The knowledge is an important factor affecting the internationalization process of a company (Johanson & Vahlne, 1990). The outcome of many Japan-West alliances is perceived to be detrimental to Western companies and beneficial to their Japanese partners due to the latter's superior learning capability (e.g., Reich & Mankin, 1986; Hamel, Doz, & Prahalad., 1989; Teramoto, Richter, & Iwasaki, 1993). This leads to the recommendation offered by some scholars to Western companies that a strategic alliance should be regarded as a learning battlefield (e.g., Hamel, 1991; Lei & Slocum, 1992). The inter-partner relationship within an alliance is thus described by coined terms like "coopetition" (Dowling, Roering, Carlin, & Wisnieski., 1996) and "competitive collaboratio n" (Hamel, 1991). Although this view of strategic alliances has become popular, it only covers part of the terrain of learning through collaboration.
This article is an attempt to classify the types of learning that actually take place within strategic alliances. This is a theoretical discussion based on extensive literature on the subject supplemented by an empirical study of 14 joint ventures formed by indigenous Singapore companies in China.  This study will be referred to as "the Sino-Singapore joint venture study" in this article. A total of 52 managers were interviewed by the author in Singapore and China during 1995. The joint ventures were in manufacturing industries such as food and beverages, electronics, computer, construction materials, and so on. Most of them were established within the past five years, and half of them had 500 or more employees. Although the Singapore parent companies were newcomers to China, all of them had invested in other Southeast Asian countries before they went to China. Therefore, many of them were fairly experienced in international strategic alliance.
This article complements two recent theoretical papers written on a similar topic. The first one is Lei, Slocum, and Pitts (1997), which discusses the key factors promoting alliance-based learning in different stages of alliance evolution, and the second is Makhija and Ganesh (1997), which shows how joint venture control processes affect the dynamics of interpartner learning. It should be noted that each of the three papers has a rather different focus.
The next section defines strategic alliance and organizational learning, and clarifies some related concepts. It provides the backdrop for subsequent discussions. Then the four patterns of learning found in strategic alliances are presented and followed by a research agenda listing some testable propositions. This article is also intended to benefit practitioners and thus some implications for management are discussed.
SOME BACKGROUND CONCEPTS
A strategic alliance is defined as a long-term cooperative arrangement between two or more independent firms that engage in business activities for mutual economic gain, and an international strategic alliance is one where partners come from two or more countries. Here "long-term" does not refer to any specific period of time, but rather, to the intention of the partners concerned that the arrangement is not going to be a transient one. The long-lasting commitment, as opposed to a tactical decision that is a short-term response to environmental changes, also means that the alliance is strategic in nature.
Various attempts have been made by researchers to classify domestic as well as international strategic alliances (e.g., Faulkner, 1993; Lorange & Roos, 1992; Root, 1988; Simonin, 1991). For our purposes, strategic alliances include R&D coalitions, franchising, coproduction agreements, licensing, and joint ventures. The partners involved in an alliance are able to maintain their independent status and thus mergers and acquisitions are excluded in our discussion. Most of the existing studies of learning in strategic alliances concentrate on R&D coalitions and joint ventures.
The concept of organizational learning is a lot more complicated than that of strategic alliance. It is beyond the scope of this article to offer a detailed examination of the concept. Excellent literature reviews on the subject can be found in Hedberg (1981), Huber (1991), and Levitt and March (1988). A few key issues that are pertinent to our discussion are covered here. The first issue is that an organization can only learn through its members as "all learning takes place inside individual human heads" (Simon, 1991, p. 125). Yet it would be simplistic to think that organizational learning is the sum of each member's learning. When an orchestra learns to play a new symphony, every member has to learn his or her part. The performance of the symphony, which is the product of learning, is always a group activity and cannot be meaningfully reducible to the playing of the different parts by the members. This independent character of organizational learning is elaborated by Hedberg (1981, p. 6):
Organizations do not have brains, but they have cognitive systems and memories. As individuals develop their personalities, personal habits, and beliefs over time, organizations develop world views and ideologies. Members come and go, and leadership changes, but organizations' memories preserve certain behaviors, mental maps, norms, and values over time.
The second issue concerns the definition of organizational learning. Researchers have offered a wide variety of definitions. At the moment definitions are as many as there are writers on the subject. The situation is rather chaotic. Instead of creating one more definition and thereby adding to the confusion, this article adopts the one suggested by Shrivastava (1981, p. 15): "Organizational learning refers to the process by which the organizational knowledge base is developed and shaped." For simplicity's sake, the term "organizational knowledge base" is taken to mean the organizational memory referred to by Hedberg (1981) above. Considering that individuals are agents of organizational learning, a link between individual and organizational learning has to be established. Based on the above definition, lessons learned by a member of an organization have to be shared by other members and be institutionalized before the lessons can become part of the organizational knowledge base.
An organizational knowledge base can be developed and shaped in a number of ways, an important one of which is to acquire knowledge. Huber (1991) identifies five processes through which organizations acquire information or knowledge. Two of them, namely experiential learning and vicarious learning, are particularly relevant to our topic. The former refers to the case where organizations acquire their knowledge through direct experience. An important feature of experiential learning is that it may not be intentional. As a matter of fact, many of our habits are learned unconsciously. Similarly, the day-to-day adaptation of an organization to changes in the internal and external environments is a consequence of a gradual, but largely unintentional, learning process. On the other hand, vicarious learning, which is an attempt to learn about the strategies, management practices, and especially technologies of other organizations, is usually carried out in a conscious manner. The process is basically inter-organiza tional imitation. Badaracco (1991) classifies knowledge into two types, namely migratory and embedded. A major objective of vicarious learning in the context of strategic alliance is to absorb deeply embedded knowledge from a partner (Hamel, 1991). Vicarious learning is the focus of most of the existing literature on learning in strategic alliances.
Finally, Bateson (1972) classifies individual learning into a hierarchy of four levels. Similarly, levels of organizational learning have been proposed by researchers. Usually the levels are constructed according to the extent of the associated cognitive development required. The most famous classification is Argyris and Schon's (1996) single-loop, double-loop and deutero-learning in ascending order of complexity. The lowest level, single-loop, learning, is concerned with routine improvements within the boundaries of an organization' s existing policies or underlying values whereas the middle level involves changes in its deep-rooted assumptions and norms. The highest level deals with the issue of learning how to learn.
PATTERNS OF LEARNING IN STRATEGIC ALLIANCES
More often than not, existing literature on learning in the context of strategic alliance has a narrowly defined scope of learning--the object of learning for a partner of a strategic alliance is usually a certain technology, or other types of know-how, of the other partner.  In practice, the scope of learning includes many more items. Firstly, if technology transfer is involved in an alliance, the transferor has to adapt the technology to suit the firm and industry characteristics of the transferee. If the transfer is a cross-border one, further adjustments to local conventions, regulations, locally supplied parts and components, and so forth have to be made. Technology transfer is basically a skill that improves with practice. It was found that for international technology transfer, transfer costs declined with each application of the technology (Teece, 1977), as a result of going down the learning curve.
Secondly, like marriage, managing an alliance with a partner is itself a great learning experience, especially if the partner is a foreign company.  Parkhe (1991) identifies five dimensions of inter-firm diversity in global strategic alliances, namely societal culture, national context, corporate culture, strategic direction, as well as management practices and organization. He argues that the diversity has negative effects on the longevity and effective functioning of an alliance, but organizational learning and adaptation can mitigate the impact of the diversity. That is, the partnership can be strengthened when the partners learn to analyze their diversity and to devise solutions to accommodate the differences. In today's business world, the know-how of managing domestic and global strategic alliances has become an essential resource of most firms, and learning is the means to acquire and accumulate the resource. A study of four joint venture sophisticated firms found that what the firms had learned fr om their experience led to more effective management of joint ventures in terms of developing partner rapport and understanding the life cycle of a joint venture (Lyles, 1988). Similarly, Harrigan (1985) maintains that there is an experience curve effect associated with the management of joint ventures. Varadarajan and Cunningham (1995) argue that a firm's accumulated learning from its past involvement in strategic alliances is likely to have an impact on the effectiveness of its future alliances. Chang's (1995) study examined the sequential entry process of Japanese electronic manufacturing firms into the United States and found that these firms first entered their core businesses. Nevertheless, learning from early entries enabled them to launch further entries into non-core businesses and into areas of weaker competitive advantage.
Finally, if an alliance takes a firm to an industry or a country other than its own, the firm has to familiarize itself with the new environment. Consider the case of forming a strategic alliance in a foreign country. The need for learning is particularly acute if the country in question has a very different institutional environment. There is a long list of items to be learned: dealing with government bodies and regulations, building up connections with customers and suppliers, adjusting products to suit local taste, competing with other producers, motivating local staff, and so on. The firm's partner, which is usually an established firm in the industry or country, can provide guidance and help in its learning process. Moreover, the firm has to gradually develop its own local business network. If the alliance leads to a change of the dominant logic, the demand on top management to learn new skills is great (Prahalad & Bettis, 1986).
The above three learning items, namely implementing technology transfer, managing the alliance per se and knowing about a new business environment, constitute what we call "learning from strategic alliance experience," and require an experiential learning process. This object of learning is distinct from "learning the other partner's skills," that entails a vicarious learning process. In a two-partner alliance, the partners may focus on the same or different objects of learning, resulting in four patterns of learning as shown in Figure 1. Here "focus" does not imply that the partners must have an intent to learn. As mentioned earlier, individual and organizational learning may be an unconscious activity. At the end of the day, no matter how little, each partner should have learned something. Having said that, an intent to learn may spur an organization on to higher levels of learning. The relative proportion of the two objects of learning present in what has been learned indicates the focus of learning.
If both partners have the same object of learning, the resultant pattern is classified as symmetrical, otherwise asymmetrical. It should be noted that "asymmetrical learning" is different from "asymmetry in learning" as used by Hamel (1991). In the latter case, the term refers to a symmetrical learning situation where one partner of a strategic alliance learns faster than the other. A sample of the empirical studies on learning within international strategic alliances as classified by this article is presented in Table 1. For competitive and non-competitive learning, the grouping is based on whether the alliance as perceived by the researcher is competitive or not. It should be noted that the patterns are not static. Sometimes one pattern may evolve over time to become another one. For example, when partners engaging in non-competitive learning start to sell similar products in the same market, the situation may turn into competitive learning.
As revealed by the nationalities of the partners in the empirical studies of Table 1, asymmetrical learning typically takes place in a joint venture set up by a firm from a developed country in a developing country. There is a large gap of technical competence between the two partners. A good example is the Sino--Singapore joint venture study. The local Chinese partners learned technology, and sometimes management skills as well, from the Singapore partners that, in turn, learned the way of doing business in China. Sometimes the Chinese partners might help their Singapore counterparts establish connections in the local business community.
The importance of asymmetrical learning is growing. During the past decade or so, thousands of Western companies have established joint ventures and other forms of strategic alliances in transitional economies such as China, Russia, and Eastern Europe. Governments of these countries want to import modern technology by collaborating with Western companies, which try to take advantage of the low labor cost and sizable market of these economies. During the years, various difficulties with managing these alliances encountered by Western companies have been uncovered (see Csath, 1992; Harvard Business Review, 1994; Shenkar, 1990). Moreover, it has been found that joint ventures in developing countries are characterized by a higher instability rate and less managerial satisfaction when compared with those in developed countries (Beamish, 1985). Studies have identified several modes of learning exhibited by local managers in China and Hungary (Child & Markoczy, 1993), and some of the above mentioned problems stem f rom learning failures. It seems that foreign companies have to pay more attention to the asymmetrical learning pattern in alliances formed with local partners of developing countries.
There are certain risks associated with asymmetrical learning. From the viewpoint of the foreign partner, there is a risk that knowledge flows to the local partner in unintended and harmful ways, particularly when laws governing property rights are not well established in the host country. For example, Goulds Pumps Inc., the foreign partner of the Nanjing Goulds joint venture, discovered that the Chinese partner manufactured its own line of pumps using a design almost identical to the proprietary one Goulds had brought to the venture, despite the joint venture contract contained a clause stating that the Goulds technology was for the sole use of the venture (Barru, 1992). Badaracco (1991) suggests that an executive should be assigned to be "gatekeeper." This executive is responsible for ensuring that knowledge leaks are kept to the minimum. This precaution is also applicable to the case of mutual learning discussed below. Another precaution that the foreign partner can take is to collect more information abo ut the local partner during the negotiation stage and to examine whether the latter has any records of property right infringements.
From the viewpoint of the local partner, there is a risk that the foreign partner exaggerates the value of knowledge that it possesses. The local partner may, as a result, overpay for the knowledge. During the negotiation stage, the local partner can hold discussions with more than one potential partner. By doing so, it gains a more in-depth understanding of the knowledge that it is buying and a better idea of what a fair market price should be. Another risk is related to the absorptive capacity of the local partner (cf. Cohen & Levinthal, 1990). The local partner's prior level of related knowledge may not be sufficient for it to learn effectively from the foreign partner. This is particularly the case when the strategic alliance is not within the core business of the local partner. Before entering into an alliance, the local partner should take stock of its existing knowledge and assess its own capability of learning from the foreign partner. It is pointless to pay for a lesson that is too difficult to lear n properly.
The first type of symmetrical learning is non-mutual; that is, both partners have the same objective of learning from the alliance experience, but they are not learning from each other. An example is a joint venture established by two partners from the same low-tech industry in another industry or country. Neither of the two partners possesses the technology or skill that is worth imitation. They come together perhaps because they want to share the risk and cost of venturing into a new industry or country. Little interest has been shown in studying this learning pattern, and to the best knowledge of the author, there have not been any empirical studies specifically focusing on it.
In contrast, the second type of symmetrical learning has attracted much attention in the literature. Each partner tries to learn the skills from the other one. Usually these skills, what Itami (1987) terms "invisible assets," are very costly for the partners to develop internally. The presence of substantial tacit knowledge in most of the skills means that they may be acquirable only by close observation and interactions of the staff concerned. This inter-partner learning, which usually occurs in high-tech industries with partners coming from developed countries, can be subdivided into two kinds, competitive and non-competitive. For competitive learning, the partners concerned are keen competitors in terms of product and customer profiles. Good examples are provided by the alliances between IBM and Apple (Gomes-Casseres, 1994), and between General Motors andToyota (Adler & Cole, 1993). The alliance "becomes a race to learn, with the company that learns fastest dominating the relationship and becoming, through cooperation, a more formidable competitor" (Parkhe, 1991, p. 580). Because the partners compete to internalize one another's skills, asymmetry in the speed of learning will change the partners' relative bargaining power within the alliance and their competitive positions outside the alliance. The partner that first internalizes the other's skills will gain a competitive advantage over the latter. The outcome is depicted as win-lose.
On the other hand, for noncompetitive learning, the partners are not direct competitors, or they have no intention to compete in the same market in the foreseeable future. They just want to enhance their skills and strengthen their positions in their respective markets. It can also happen that though the partners are direct competitors, they do not bring along the competitive mentality to their strategic alliance. Under these circumstances, the alliance is regarded as non-competitive. The outcome of this kind of non-competitive learning is more likely to be a win-win situation. Consider the two biotechnological alliances, both formed by the same British firm, discussed in Dodgson's (1993) study. For the first alliance, the partner is Medical Research Council, a non-commercial organization in the U.K. The partner of the second alliance is a large U.S. company that is very different from the British firm in terms of size and skills. In the strategic context, the alliances are more complementary than competitiv e in nature (Pucik, 1988). Whereas for competitive learning, the partners may be head-on competitors in the same market. Thus, competition may be regarded by the partners as eternal, whereas cooperation only transient.
A RESEARCH AGENDA
Empirical studies on learning in strategic alliances tend to generalize their results beyond the context within which the learning occurs. This situation is especially serious for the studies on competitive learning which usually recommend that companies should grab their partners' skills as fast as possible while at the same time carefully protecting their own. These studies have neglected the point that competitive learning is only one of the several learning patterns that may take place in a collaborative arrangement. The typology of learning presented in this article not only corrects this view but also points to a fresh research direction. Existing studies tend to concentrate on one learning pattern only and fail to make cross-pattern comparisons. It is expected that firms within different learning patterns would exhibit different behavior, as indicated in the following research propositions. These propositions are better regarded as identifying some important research topics than portraying a comprehens ive research agenda.
In competitive learning, Hamel (1991) argues that a partner's intent to internalize the other's skills is a key determinant of learning; the stronger the intent, the higher the chance that the partner will win the learning race. Although firms have numerous reasons for entering into a strategic alliance (see, e.g., Contractor & Lorange, 1988; Glaister & Buckley, 1996), a desire to learn the other partner's skills is often one of the major motives behind alliances involving competitive or non-competitive learning. For example, in Inkpen's (1992) study of 40 North American-Japanese joint ventures, 32 of the 40 North American parent companies were found to possess learning. intent of various kinds. Similarly, in a survey of biotechnology firms, gaining access to partner's R&D facilities and expertise was cited as one of the main motives behind strategic alliance formation (Forrest & Martin, 1992).
On the other hand, it is not expected that partners of strategic alliances involving non-mutual learning have explicit learning intent. These alliances are usually formed because of objectives other than learning. Of course, the partners will learn from the alliance experience. This experiential learning, nevertheless, takes place rather unconsciously without much active learning effort exerted by the partners. As such, most of the lessons learned may remain at the single-loop level. The case of asymmetrical learning is slightly more complicated. Similar to the situation of non-mutual learning, the partner which brings in technology and management skills is not expected to have learning intent. The opposite is true for the other partner. For instance, none of the Singapore companies in the Sino--Singapore joint venture study mentioned learning as one of the key objectives of establishing the ventures whereas all the Chinese partners intended to learn the technologies and management know-how of their foreign counterparts. The presence or absence of learning intent among the four learning patterns leads to the following proposition. 
P1: Firms engaging in competitive or non-competitive learning are more likely to possess learning intent than firms engaging in non-mutual or asymmetrical learning.
It seems that recently there is a turn of the current with respect to the relative importance of opportunism and trust perceived by researchers in economic transactions. The concept of opportunism as used in transaction cost economics is under severe attack by Ghoshal and Moran (1996). At the same time it is argued that trustworthiness can be a source of competitive advantage (Barney & Hansen, 1994). Like organizational learning, numerous definitions of trust have been used in the literature (e.g., Bradach & Eccles, 1989; Gambetta, 1988). Here we adopt the one proposed by Sabel (1993). In the context of a strategic alliance, trust is the mutual confidence among the partners that none of them will exploit another's vulnerabilities. "Successful companies never forget that their new partners may be out to disarm them"--a piece of advice given by Hamel, Doz, and Prahalad (1989, p. 134) to Western companies which engage in competitive learning. If all the partners of an alliance subscribe to this "conspiracy view ," there is little room for bringing in the idea of trust in such a situation where suspicions would be rampant. Thus we expect that levels of trust in competitive learning are very low.
P2: Levels of trust among firms engaging in competitive learning are lower than those found in other patterns of learning.
Koenig and Van Wijk (1991) elaborate the important role played by trust in the emergence, stability, and performance of strategic alliances. In a similar vein, Buckley and Casson (1989, p.72) argue that "(j)oint ventures are, first and foremost, a device for mitigating the worst consequences of mistrust." Hence trust among partners is essential for the proper functioning of a strategic alliance. On the issue of learning, Dodgson (1993, p. 78) contends that "effective learning between partners depends on the construction of a 'climate' of trust engrained in organizational modes of behavior, and supported by the belief in the mutual benefits of collaboration throughout the organization." With little trust, partners would tend to establish both explicit and implicit safeguards against inadvertent leakage of their know-how. That is, they have tight control over the skills contributed to the alliance, and thereby reduce their transparency or openness to their partners. In the extreme case, they may even minimize t heir effort to transfer the skills that are covered under an alliance agreement. Moreover, the lack of trust will lead to opportunistic behavior and frequent inter-partner conflicts, which also constitute obstacles to inter-partner learning.
P3: Partners' control over the skills contributed to a strategic alliance involving competitive learning is tighter than that found in other patterns of learning.
P4: More obstacles to inter-partner learning are present in strategic alliances involving competitive learning than in those involving other patterns of learning.
How a cooperative arrangement is to be run and how the results generated are to be divided among the partners depends on the relative bargaining power of the partners concerned. Bargaining power refers to a firm's ability to win accommodations from its partners (see Dwyer & Walker, 1981; Tung, 1988). At the formation stage of an alliance, the bargaining power of a partner is very much resource-based, being derived from the nature of the resources committed by the partner to the alliance. Resource dependence theory (Pfeffer & Salancik, 1978) suggests that power in inter-organizational relations comes from the possession or control of critical resources. Firms gain bargaining power relative to their partners if they contribute resources that are "costly or impossible for other partners to replace" (Root, 1988, p. 76) and are critical to the alliances' success (Harrigan & Newman, 1990).
For asymmetrical learning within alliances formed in the context of firms from developed countries investing in developing countries, the foreign partner usually has a better initial bargaining power that originates from contributing resources needed by the host country (Lecraw, 1984). These resources are often the objects of learning by the local partner. In many cases, one of the resources contributed by the local partner to the alliance is its business and government connections. In a developing country, these connections are, to a large extent, person-specific and not subject to imitation by the foreign partner. Consequently, the resource dependence relationship evolves to the local partner's favor. Unless the foreign partner puts in new resources that are attractive to the local partner, its bargaining power may gradually be eroded. As commented by one Singapore manager interviewed by the author, their Chinese joint venture partner wanted to take over the stage when it thought that it had learned the tr icks of the trade.
P5: In strategic alliances formed in the context of firms from developed countries investing in developing countries and involving asymmetrical learning, bargaining power of local partners gradually increases relative to that of foreign partners.
In the case of competitive and noncompetitive learning, both partners contribute their respective skills to the alliance, and they intend to internalize each other's skills. Asymmetries in learning arise when one partner learns faster than the other. When the skills of a partner have been successfully learned and internalized by the other, bargaining power of the former will be curtailed unless it injects fresh skills into the alliance. Thus asymmetries in learning are a key determinant of shifts in partners' relative bargaining power, as argued by Hamel (1991). Nevertheless, in a competitive atmosphere where partners try to dominate the relationship, this shift of bargaining power will be more acute.
P6: Asymmetries in learning among partners of strategic alliances involving competitive and non-competitive learning change the relative bargaining power of the partners. This change is bigger in competitive than non-competitive learning.
As a hybrid form of organizations between market and hierarchy, strategic alliances are inherently unstable due to complicated ownership and management structures. Following Inkpen and Beamish (1997, p. 182, emphasis in original), here instability is defined as "a major change in relationship status that was unplanned and premature from the perspective of either one or both partners". Cross-border alliances have an additional problem of cultural and institutional adjustments by the partners concerned. Alliances may be terminated for a variety of reasons such as partner conflicts, fulfillment of original missions, change of host country policy, and so forth. One reason of interest here is learning asymmetries among partners, the impact of which on stability depends on the type of learning involved.
The greatest impact is expected to occur in competitive learning where each partner tries to internalize the other's skills and the partners are direct competitors outside the alliance. In fact, the alliance is less a cooperative arrangement than a race to imitate one another's skills. Active transfer of knowledge from the alliance to each partner takes place. Once a partner has achieved its objective, there is little incentive to continue. Furthermore, the fast-learning partner may fear that the other partner will catch up if the alliance carries on. Non-competitive learning is a different story. The purpose of inter-partner learning is to strengthen the partners' competitive capability in their respective markets. It is less likely that successful learning achieved by one partner would lead to the dissolution of an alliance.
Learning asymmetries may be an instability factor in asymmetrical learning. For an international strategic alliance formed in developing countries, the foreign partner usually tries to benefit from the indigenous experience of the local partner. After the foreign partner has acquired the needed capabilities from the joint venture operation, it will no longer need the local partner and may convert the alliance into a wholly owned subsidiary (Gomes-Casseres, 1987). In fact, the development can also be the other way round. That is, after the local firm has internalized the know-how of the foreign partner, it may try to operate on its own. As there are other reasons for establishing this type of joint venture, it is not expected that the effect of learning asymmetries on stability is as great as the case in competitive learning. Finally, learning asymmetries should have a minimal impact on stability for non-mutual learning. Thus we arrive at the following proposition.
P7: Among the four patterns of learning in strategic alliances, asymmetries in learning among partners occurring in competitive learning are most likely to result in alliance instability.
Badaracco (1991) argues that the core of a company nowadays, like that of Renaissance city-state, is a dense web of long-standing relationships formed with other companies. Such alliances enable companies to learn or jointly create new knowledge. During the past decade or so, a number of books on how to develop a learning organization have been published (e.g., Garratt, 1987; Lessem, 1991; Senge, 1990; Swieringa & Wierdsma, 1992). It is not the intention of this section to discuss ways to improve a company's learning capability in general. Rather, it focuses on certain aspects of how a company can learn more effectively from its strategic alliances. It does not cover the case of protecting against inadvertent leakage of knowledge to an alliance partner, which has been discussed in detail elsewhere (e.g., Hamel, 1991; Lei & Slocum, 1992).
Although learning intent is not a necessary condition for learning, especially experiential learning, to take place, the presence of learning intent in a company is the first step toward effective learning. A company can learn better and faster if it has an intent to do so, as demonstrated by Japanese partners in international strategic alliances (Hamel, 1991). The articulation of learning intent would focus a company's learning effort and heighten its awareness of the need for learning beyond the single-loop level.
At the early stage of a strategic alliance, a partner should evaluate the alliance's learning potential in terms of the novelty of alliance experience and the skills possessed by the other partner. Alliances that offer novel management experience in terms of market, culture, production process, organizational structure, technology, and so on, would enhance a partner's exposure. The skills brought to the alliance by the other partner should be assessed as to how far they are useful to and complement the company's existing knowledge base. Clear learning objectives should then be formulated.
Staff as Agents of Learning
As an organization can only learn through its members, staff assigned to a strategic alliance are important agents of learning for the partners. Though learning can take place unconsciously, without being assigned a clear responsibility to learn and to share their experience, the staff may fail to learn effectively and to benefit their companies. Learning objectives should be incorporated into a company's reward system. As argued by Lei, Slocum, and Pitts (1997), a reward system is an effective organization design vehicle that can greatly facilitate learning. Such a reward system is found in many Japanese and Korean companies (Pucik, 1988).
The discussion in the previous sections illustrates that a company's learning intent should not just focus on acquiring skills from their alliance partners. Learning from the alliance experience is equally important. However, the two objects of learning are of different nature; the former is vicarious learning while the latter is experiential learning. This factor should be taken into account when staff are assigned to a strategic alliance. Vicarious learning is more focused and requires the staff concerned to have the necessary background knowledge. For instance, if a company wants to internalize a certain technology possessed by its alliance partner, its staff sent to the alliance should have in-depth knowledge related to the technology. The staff should have the capacity to absorb the technology, which can be deeply embedded in the partner. On the other hand, what is to be achieved in experiential learning is less definite. The staff should be able to identify and pick up knowledge that would be useful fo r their companies. A case in point is the Sino-Singapore joint venture study. Many of the Singapore expatriate managers mentioned that they knew more about the business environment in China, management of local staff, collaborating with the Chinese partners, and so on. The question is how to organize and institutionalize this knowledge so that the organizational knowledge base of their Singapore headquarters can benefit. A good understanding of the headquarters' cultures and management systems is needed. Thus it is preferable to send staff who have worked in the headquarters for a considerable period of time to China. This requirement is less stringent for staff who are responsible for vicarious learning.
Sharing of Alliance Knowledge
Some firms enter strategic alliances to exploit other firms' resources and competencies, but learn nothing from their affiliations with excellent partners. No skills are transferred back to sponsoring firms--even where a partner is willing to train personnel assigned to the strategic alliance--because no receiving mechanism is in place there (Harrigan, 1995, p. 19).
The above comment illustrates the importance of knowledge sharing. A company should establish channels for transferring knowledge gained from strategic alliances back to itself. This is particularly important for international strategic alliances where huge geographical distances may be involved.
One method is to require managers who are stationed in strategic alliances to submit "reports on useful experience and knowledge" to their headquarters, in addition to the normal operational reports. The spirit is to treat "every incident as a case study from which we can learn" (Handy, 1994, p. 53). These reports help spread the knowledge among the management. Since they are permanent records in the organizational memory, they can stand personnel turnover. Another method is to have a systematic rotation of managers. They are rotated not only among the alliances, but also between headquarters and the alliances. Besides facilitating experience sharing, the rotation system enables these managers to understand a strategic alliance from a multiplicity of perspectives. Visits and tours of strategic alliances are an effective means for senior managers who are based at headquarters to acquire more intimate knowledge of the alliances. This knowledge supplements the information they obtain through other channels of c ommunication with these operations.
As argued earlier, levels of trust among partners engaging in competitive learning are expected to be lower and obstacles to learning to be more than the case of non-competitive learning. In the extreme, the outcome may be a lose-lose one--both partners fail to get what they want. An interesting issue for managers, as well as researchers, is how to convert competitive learning into noncompetitive learning. The scenario is isomorphous to the well-known "Prisoner's Dilemma." Although it is beyond the scope of this article to examine this issue in detail, there are two points that are worth bearing in mind by managers. Firstly, a company that has a reputation for "using" their collaborators and then "dumping" them may find its pool of potential partners shrinking. Secondly, when competitors collaborate, it is better for them to state clearly at the beginning the skills and know-how they will bring to the alliance, so that both sides would have realistic expectations. This helps reduce the competitive atmosphere . Moreover, new partners should start from a small alliance, which offers an opportunity for them to work together and understand each other. They engage in bigger and more alliances only after trust has been built up.
Although the concepts of strategic alliances and organizational learning are gaining wide currency among both academics and practitioners, the theoretical link between the two is still weak. This article provides a detailed analysis of learning patterns taking place within strategic alliances, especially those formed by partners of different nationalities. Four patterns of learning have been identified and testable propositions suggested. Managers would also benefit from the discussion. As they understand more about the nature of the learning patterns, they can plan their learning strategies more effectively.
It has been demonstrated in this and other papers that the issue of learning in strategic alliances is a complicated one, and is an important topic that deserves more research attention. This article is just a small step moving toward that direction. It is hoped that more will follow.
Eric W K Tsang, Mailbox No: B1A-08, Nanyang Business School, Nanyang Technological University, Singapore 639798. Fax: 65-7934206 (home); 65-7913697 (office); E-mail: firstname.lastname@example.org
(1.) It should be noted that the empirical study was not designed to test the propositions put forward in this article, but some of its findings are relevant to the discussion and are cited from time to time for illustration. Because of this and owing to the limitation of space, details of how the study was conducted are not presented in the article.
(2.) For simplicity, a two-partner strategic alliance is assumed in the following discussion.
(3.) If a firm has a number of strategic alliances, it also has to learn to manage its portfolio of alliances. But this is a higher level of learning outside the context of any alliance and is not discussed here.
(4.) All the propositions are formulated on a ceteris paribus basis.
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A Sample of Empirical Studies on Learning in International Strategic Alliances Type of Learning Study ASYMMETRICAL Child & Markoczy (1993) Cyr & Schneider (1996) Simon & Davies (1996) COMPETITIVE Hamel (1991) Simonin (1991) Inkpen (1992) NON-COMPETITIVE Ciborra (1991) Dodgson (1993) Doz (1996) Type of Learning Nationality of Partners ASYMMETRICAL Western countries, Hungary, and China Western and Eastern Europe Western countries and Hungary COMPETITIVE U.S.A., Europe, and Japan U.S.A., Europe, and Japan North America and Japan NON-COMPETITIVE U.S.A., Europe, and Japan U.S.A. and U.K. U.S.A. and Europe
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|Author:||K. Tsang, Eric W.|
|Publication:||Journal of World Business|
|Date:||Sep 22, 1999|
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