INTERFIRM DIVERSITY, ORGANIZATIONAL LEARNING, AND LONGEVITY IN GLOBAL STRATEGIC ALLIANCES

INTERFIRM DIVERSITY, ORGANIZATIONAL LEARNING, AND LONGEVITY IN GLOBAL STRATEGIC ALLIANCES

FOURTH QUARTER 1991 | Arvind Parkhe*
This paper explores the relationship between interfirm diversity and the longevity and effectiveness of global strategic alliances (GSAs). It argues that while interfirm diversity is essential for the formation and maintenance of GSAs, it can also pose significant challenges due to differences in societal culture, national context, corporate culture, strategic directions, and management practices. The paper develops a multilevel typology of interfirm diversity and focuses on organizational learning and adaptation as critical processes that moderate the impact of diversity on alliance outcomes. It proposes that a minimum level of interfirm diversity is necessary for alliance formation, but this diversity can be mitigated through iterative cycles of learning, which in turn promotes alliance longevity and effectiveness. The paper also discusses the dynamic nature of Type I and Type II diversity, suggesting that the extent and type of diversity can shift over time, affecting alliance outcomes. Finally, it emphasizes the importance of learning and adaptation among GSA partners and suggests that future research should focus on the cognitive and adaptive aspects of diversity management in GSAs.This paper explores the relationship between interfirm diversity and the longevity and effectiveness of global strategic alliances (GSAs). It argues that while interfirm diversity is essential for the formation and maintenance of GSAs, it can also pose significant challenges due to differences in societal culture, national context, corporate culture, strategic directions, and management practices. The paper develops a multilevel typology of interfirm diversity and focuses on organizational learning and adaptation as critical processes that moderate the impact of diversity on alliance outcomes. It proposes that a minimum level of interfirm diversity is necessary for alliance formation, but this diversity can be mitigated through iterative cycles of learning, which in turn promotes alliance longevity and effectiveness. The paper also discusses the dynamic nature of Type I and Type II diversity, suggesting that the extent and type of diversity can shift over time, affecting alliance outcomes. Finally, it emphasizes the importance of learning and adaptation among GSA partners and suggests that future research should focus on the cognitive and adaptive aspects of diversity management in GSAs.
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