Why do Firms Ally in Dynamic Environments? - Empirical Findings from a Co-Evolutionary Perspective

Abstract:     
The paper investigates the very nature of collaborative advantage against the background of environmental dynamics. Applying grounded theory and case study research, exploratory fieldwork in the German healthcare sector revealed a taxonomy of three common bases for collaborative advantage in response to the research question why firms ally in dynamic environments: (1) gap closing, (2) creating options, and (3) steering directions of environmental development. Typically, these motivations are not mutually exclusive, and often overlap at varying degrees in particular collaborative arrangements in practice. Referring to the Austrian School for the market/industry level and to the competence-based view for the firm level facilitates a theory-based analysis of cooperation decisions from an organization/environment co-evolution perspective, all under the umbrella of market process theory. Findings and propositions for all three bases for collaborative advantage reveal that alliances in dynamic environments are not only forced by external change, but that they themselves at the same time influence environmental change processes.

Keywords: alliances, competence-based view, market process theory, organization/environment co-evolution, turbulent environments

JEL Classification: I11, L22, M10, M13, O30

working papers series