A Framework for Quality Management Practices in
Strategic Alliances
Abstract
This
paper is about the role of Quality Management (QM) practices on the success of
strategic alliances. The proposed model employs a relational view of
inter-organizational competitive advantage, which attempts to address the
concept of quality management in strategic alliances and networks. While
previous research on quality management has been focused on the implementation
of quality management within a firm, by extending the concept of quality
management to strategic alliances this paper takes a new approach toward
quality management implementation outside the traditional view toward quality.
Trust
and co-operative learning have emerged as critical factors that affect the
success of strategic alliances. The proposed model, while integrates elements of
quality management and strategic alliances, determines alliance success and
alliance satisfaction as the outcomes of strategic alliances. Several
propositions have been developed to address the relationship between different
constructs in the model. The effect of trust and co-operative learning on
alliance performance has been discussed, and key areas for research have been
identified.
Key Words: Quality
Management, Trust, Learning, Inter-organizational Strategy
I. INTRODUCTION
Quality
Management (QM) has been recognized as a comprehensive management paradigm for
enhancing organizational performance and competitiveness. Kanji regarded quality
management as “the second industrial revolution.” (1990: 4). Empirical research
shows that quality management practices affect firm performance and
competitiveness (Das et al., 2000,
Douglas and Judge, 2001; Kaynak, 2003).
The
importance of QM in management research was first addressed in a special issue
of Academy of Management Review (Vol.19, Issue 3, 1994, Special Issue,
“Total Quality”). While quality management and its underlying assumptions about
organizations may be different from other management theory (Grant et al., 1994), research on quality
management can be an important source for generating theories in the field of
management. Quality management has practitioner origins which management theory
should address (Dean and Bowen, 1994).
Traditionally,
quality management has been considered as a functional/operational level
strategy, where most of the research and theory building in QM is related to
micro-level of organizations, like organizational structure (Spencer, 1994;
Jenner et al., 1998), work
performance (Waldman, 1994), organizational change (Reger et al., 1994; Jenner et al.,
1998), control (Sitkin et al., 1994)
human resource management (Cardy and Dobbins, 1996), organizational behavior (Shea
and Howel, 1998) and leadership (Puffer and McCarthy, 1996). Despite some works
in areas like organization systems (Spencer, 1994), contingency theory (Sitkin et al., 1994), organization culture
(Manley, 1998), strategy (Reed et al.,
1996; Reed et al., 2000), and ethics
(Wicks, 2001; Ahmed and Machold, 2004) there is not much related work on macro-level
analysis of organizations. Accordingly, there is a need to look at quality
management from the strategic viewpoint, and to define a framework for its
implementation through strategic and corporate level of analysis. While
concepts such as ethics, cooperation, and trust are related to enterprise and
corporate level strategies, these concepts are closely related to the practice
of quality management (Wicks, 2001; Ahmed and Machold, 2004).
On
the other hand, researchers and scholars in the field of quality management are
concerned about the domain of quality management. Quality management has been
traditionally addressed within the firm boundaries and they argue that due to
the growing interest in inter-organizational alliances and networks, there is a
need to understand quality management in new settings such as supply chain
management and strategic networks (Sousa and Voss, 2002). Recent studies show
that there are synergies between quality management and supply chain management
performance (Flynn and Flynn, 2005). As Prahalad and Krishnan (1999) indicated,
traditional definitions and approaches of quality do not fit within the new
information age and a new definition for quality needs to be adapted. According
to Robinson and Malhotra (2005) understanding quality management in a supply
chain environment requires a transition form a product to a process oriented perspective
towards quality.
While there is increasing interest towards
strategic alliances and networks, scholars and practitioners are interested to
know the critical success factors for such alliances (Gulati, 1998; Gulati et al., 2000; Arino et al., 2001; Inkpen, 2005; Sampson, 2005; Singh and
Mitchell, 2005; White and Lui, 2005). Strategic
alliances are considered as a useful mechanism for gaining competitive
strategy, yet successful management of strategic alliances is a difficult challenge
(Inkpen and Ross, 2001; Cohen and Mankin, 2002). Problems such as individual
identity, cultural conflict and practices, and unstructured mission may affect
the performance of alliances (Browning et
al., 1995). Recently, scholars have been called for research in the effect
of firms’ characteristics on the performance of alliances (Zollo et al., 2002). It is expected that developing
a holistic approach for improving the overall quality of strategic alliances can
provide practical implications for resolving the above mentioned shortcomings
of alliances and result in a network of organizations that leads to the success
of alliances.
Despite
extensive research and different theoretical frameworks for understanding
strategic alliances and their success factors, little has been said on the
effect of quality management practices on the success of strategic alliances.
In that regards, this paper contributes both to the theory development in
quality management and strategic alliances. First, it extends the concept of
quality management beyond the scope of a firm and provides new directions and
outlets for research in quality management. Second, it contributes to the
existing body of knowledge in understanding successful strategic alliances.
II. THE PURPOSE OF THE STUDY
The
purpose of the paper is to analyze the implementation of quality management in
strategic alliances. A learning perspective of
strategic alliances has been employed to understand the dynamics and evolution
of inter-firm collaborations within a network of firms. The proposed model encompasses the elements of successful strategic alliance that is
built upon principles of QM. From a theoretical perspective, a top management
perspective and focus on the network/institutional effect of QM within
strategic alliances has been employed (Young et al., 2001).
From
the network perspective of strategic alliances, firms need to develop a new set
of practices (quality management) that is applicable to the new setting
(strategic alliances). In other words,
while the traditional practice of quality management within a firm employs a
top management perspective to quality (a vertical approach to quality), within
strategic alliances both the top management perspective and network approach (a
horizontal approach to quality) need to be considered. The empirical research
shows that top management is the major driver of quality management
implementation in a firm (Wilson and Collier, 2000; Kaynak 2003). However, there is not any evidence on how the
principles of quality management can be implemented within a network of firms,
and in our particular context, within an alliance. Is top management the major
driver of performance while a firm enters such collaboration with other firms? More
important, what is the definition of quality in this new context? Can we employ
a product based approach to quality (Garvin, 1984)? These are questions that
are outside the domain of existing knowledge in quality management.
Here,
the major challenge is the level of analysis in quality management. To answer
the above questions we need to move from an organization (as a traditional unit
of analysis for quality management) to the network (multiple firms). Therefore,
our focus is on the network of firms, not an individual firm per se. The
practice of quality management within a firm will be different than the
practice of quality management within an alliance (Westphal et al., 1997; Young et al., 2001). This transition requires new definition, theoretical
lenses, and frameworks for quality. Accordingly, a process orientation of
quality has been employed to address the definition and practice of quality
management in the new context (Robinson and Malhotra, 2005).
III. COOPERATON AND ALLIANCES
Writers
and scholars in the field of management have emphasized the importance of
cooperation and networking in achieving higher performance and profitability
(Smith et al., 1995; Gulati et al., 2000). Gulati defined strategic
alliances as “voluntary arrangements between firms involving exchange, or co-
development of products, technologies, or services.” (1998:293). Arino et al. defined a strategic alliance as
“a formal agreement to pursue a set of private and common goals through the
sharing of resources in contexts involving consented markers and uncertainty
over outcome” (2001:110). Gulati defined strategic alliances as “any
independently initiated interfirm link that involves exchange, sharing, or co-development
[between firms] (1995: 86).” Zollo et al.
defined strategic alliances as “cooperative agreement of any form aimed at the
development, manufacture, and/or distribution of new products.” (2002: 701). Smith et al. (1995) emphasized the critical role of cooperation and
coordination in achieving organizational objectives. They pointed out that
while cooperation and coordination within organization and between firms were
not new in the management and organizational studies, the emergence of total quality
management philosophies emphasized more need for cooperation throughout
organizations and between firms. For the purpose of this paper, strategic
alliances is defined as long term cooperation between firms aimed at achieving
a shared (common) set of goals through knowledge sharing and co-operative
learning between partners.
Research
on strategic alliances has uncovered some aspects of the alliance process as
well as the critical success factors. In their study of strategic alliances
between firms in the semiconductor industry, Browning et al. (1995) found that firms forming strategic alliances
encountered an early phase of chaos and complexity. Such a chaotic environment
was due to the mixed conceptions of culture of firms within the alliance, which
created ambiguity about individual identity and status. However, as the degree
of understanding among individual firms increased (as more cultural practices were
experienced), the alliance formed a base for common values and social networks.
The process further supported trust, through personal and individual
contributions. By the formation of trust and morale among members, a new order
(sets of practices) developed in the alliance, which set as the norm and
standard for fostering cooperation.
Different
approaches and theoretical perspectives have been used for understanding
strategic alliances. Building upon transaction cost theory and in a comparative
study of interfirm collaboration in the auto industry between the US and Japan
From
a social network perspective, Gulati (1998) argued that there were three main
motivations for formation of alliances: transaction cost resulting from small
numbers bargaining, strategic behavior that leads firms to enhance their
competitive behavior, and learning. He noted that firms entering alliances
might face considerable moral hazard concern due to the unpredictability of
their partners in the alliance. He referred to trust as an important aspect of
alliances, where it served as a mechanism through which partners could predict
each other’s behavior. According to
Gulati (1995), the problem with transaction cost theory was the exclusion of
interfirm trust. To avoid this shortcoming, a learning perspective of strategic
alliances has been employed in this paper.
Determinants of Alliance
Most
scholars agree upon the importance of trust
in successful cooperation between firms (Smith et al., 1995; Gulati, 1995; Jones and George, 1998). McAlister
(1995) reported that trust could enhance coordination, which led to lower
administration costs. Browning et al.
(1995) reported on the role of leaders as being role models for developing
trust and building relationships. Gulati et
al. (1994) argued that familiarity between partners enhanced trust, which
in turn replaced legal relationships like equity sharing as a governance system
for managing the cooperation. He pointed out the role of cultural closeness in
managing cooperation among partners, where similar partners used more informal
cooperation mechanisms. Arino et al.
(2001) argue that the success of strategic alliances depends on their level of relational quality which was the extent
to which the partners felt comfortable with each other and were willing to rely
on trust in dealing with one another.
Knowledge sharing and learning have been
recognized as the most essential attributes of successful strategic alliance. Crossan
and Inkpen (1995) argue that the survival of alliances is dependent upon the
ability of partners to extract knowledge and skills from each other. They
defined learning as the primary
objective of strategic alliances. While learning and performance are not synonymous,
learning enhances long term performance of firms. Morrison and Mezentseff
(1997) indicated that creating a learning environment was the key and focus of
strategic alliances. According to Inkpen (2005) firms within an alliance can
learn from their partners’ past experiences and transfer their knowledge and
experiences back to the parent organization.
IV. INTRODUCING QUALITY MANAGEMENT AND LEARNING TO
STRATEGIC
ALLIANCES
The extensive research on quality
management indicates that the ultimate goal of QM is to establish a management
system and an organizational culture that ensures customer satisfaction and
continuous improvement (Kanji, 1990; Sitkin et
al., 1994; Spencer, 1994; Hackman and Wageman, 1995; Powel, 1995; Wicks,
2001; Kaynak, 2003)
As Reed et al. (1996) indicated there was no consensus on the definition
for QM, since its definition varied based on the approach taken towards
quality. Flynn et al. defined QM as “an integrated approach to
achieving and sustaining high quality output, focusing on the maintenance and
continuous improvement of processes and defect prevention at all levels and in
all functions of the organization, in order to met or exceed customer
expectations.” (1994: 342). Anderson,
Rungtusanatham, and Schroeder (1994) perceived quality management as a holistic
approach to organization-wide quality, operationalized through leadership,
internal/external cooperation, effective process management, product design,
learning, customer focus and involvement, employee fulfillment, and continuous
improvement.
Dean and Bowen (1994) conceptualized
QM in terms of principles, practices, and techniques. The principles are
customer focus, continuous improvement, and teamwork. Each principle includes a
set of practices, like direct customer contact, process analysis, group skills
training, and collaboration with suppliers. These practices, then, are
implemented through a number of techniques, like quality function deployment,
control charts, cause and effect diagrams, team building, six-sigma, and so on.
Based on
an extensive review of the literature on the definition and elements of quality
management, Mehra et al. (2001)
identified five key factors for quality management including, human resources
focus, management structure, quality tools, supplier support, and customer
orientation. Recently, Kaynak (2003) provided a summary of previous
research on QM practices and organizational performance. A consistent finding
among theses studies is that infrastructural QM practices, such as top
management leadership, training, and employee relations, affect performance
through core QM practices, such as quality data and reporting, supplier quality
management, product/service design, and process management.
Despite
the differences among scholars and practitioners on the definition of QM and
its components, most studies refer to the Malcolm Baldrige National Quality Award
(MBNQA) as the model for QM (Dean and Bowen, 1994; Flynn and Saladin, 2001).
The Baldrige Award consists of seven criteria, including leadership, customer
and market focus, measurement, analysis and knowledge management, human
resource management, process management, and business results. Within this
framework, most studies indicate that leadership is the main drive for
achieving business results and customer satisfaction (Wilson and Collier, 2000;
Flynn and Saladin, 2001). For the purpose of this study the Malcolm
Baldrige National Quality Award (MNBQA) has been used as a reference model for QM
[within a firm].
QM in Strategic Alliances
Despite
the fact that quality management has been addressed within a firm (Sousa and
Voss, 2002) QM and its underlying assumptions could be applicable to strategic
alliances. It has been stated that trust and cooperation are among QM’s underlying
philosophical assumptions (Wicks, 2001). By employing an institutional
perspective to organizational study, Westphal et al. defined QM as ”a managerial innovation that emphasizes an
organization’s commitment to the customer and to continuous improvement of
every process through the use of data-driven, problem-solving approaches on
empowerment of employee groups and teams.” (1997: 367). They argue that a social
network can influence the form of practices organizations introduce. While it
has been argued that institutional forces affect both QM adoption and its
content (Wesphtal et al., 1997), it
seems that formation of strategic alliances brings such pressure to the firms,
to the extent that firms need to restructure their practices and develop a new
set of practices compatible with the new settings (Browning et al., 1995). This calls for new QM
content and process within strategic alliances (Westphal et al., 1997).
Another
relevant issue that bridges QM and strategic alliances together is the role of
learning in alliances (Morrison and Mezentseff, 1997). QM emphasizes learning
(Hackman and Wageman, 1995). In the perspective that the objective of strategic
alliances is learning, QM can enhance the learning environment. In fact, as
Garvin (1993) pointed out, continuous improvement would not happen until there was
a learning environment. Continuous improvement is one of the principles of QM
(Dean and Bowen, 1994). Accordingly, QM has the potential to enhance learning,
which is the objective of strategic alliances (Smith et al., 1995). A recent study by Linderman et al. (2005) demonstrates the link between quality management and
knowledge creation, where quality management practices create knowledge and
enhance organizational learning which leads to higher performance.
Regarding
the overall quality of strategic alliances, Arino et al. (2001) argue that in achieving the objectives of strategic
alliances, reliance on trust is not sufficient since trust is a complex issue
and management should focus on a broader concept - - the quality of the alliance
and the critical success factors of enhancing the overall quality of the
alliance. By defining relational quality as “the extent to which the partners
feel comfortable and are willing to rely on trust in dealing with one another,”
(2001: 111) they argue that relational quality encompasses a broader concept
than trust, such as degree of compatibility of corporate culture and
decision-making style, and a convergence of worldviews. However, they do not go
beyond that and do not address the development, and evolution of relational
quality as well as its relationship to the alliance performance. It is the
purpose of this paper to address this issue from quality management
perspective.
The Role of Learning in Alliances
Love
et al. (2002) provided a framework
for strategic partnership in reference to QM. They argued that successful
strategic alliance requires systems thinking, a learning culture, knowledge and
communication, changing mental models, joint learning structure/process, and
development of learning relationships. Through a case study (interview) with
managers in the construction industry, they found that the strategic alliance
resulted in improved problem solving skills, project management performance,
knowledge and competence of workers, inter-organizational relationships, and stakeholders’
satisfaction. In order to benefit from knowledge and expertise of the
partner(s) in alliances, a systematic approach to alliance learning needs to be
established. Development of such a learning environment requires leadership
commitment in the learning process (Inkpen, 2005).
Furthermore,
there was a link between learning as one of the objectives of alliances and QM.
In fact, the ability of QM-driven organization to evolve to a learning
organization prepared them for successful strategic alliances. Garvin (1993)
pointed out organizations which were committed to QM would be uniquely prepared
for learning. According to Crossan and Inkpen (1995), the ability to learn is
critical to the success of strategic alliances. Since QM emphasis learning
(Garvin, 1993), successful implementation of quality management enhances
learning in alliances. However, from the institutional theory perspective,
firms need to adopt their QM practices to the environmental forces. Research
shows that both top manager and institutional/network perspectives are
important factors for implementing new management practices such as QM (Young et al., 2001). However, the literature
does not address how such adaptation happens.
Based
upon the above and for the purpose of this paper, quality management within
strategic alliances has been defined as
“the coordination and integration of all business
activities (e.g. processes,
procedures, techniques) involving all partners
(firms) in the alliance through
continuous improvement of processes to enhance
performance and achieve
customer satisfaction - a key part of which is continuous learning”.
It
should be noted the above definition reflects a process orientation toward understanding
quality in strategic alliances – an approach that has been recommended by
Robinson and Malhotra (2005). The process approach is critical for
understanding quality with respect to the emphasis on learning in alliances. Such
a definition for quality resolves the shortcomings of previous approaches for
relating quality to strategic alliances in a network of firms, to the extent
that it focuses on the processes (rather than the product) within the alliance.
V. DEVELOPMENT OF CONCEPTS AND THEIR RELATIONSHIPS
In
this section, a model for QM in strategic alliances is introduced and defined.
Each element of the model is grounded with the relevant literature and evidence
is provided to support its inclusion. The main elements or components of
successful strategic alliances based on QM and learning are trust, strategic
intent, organizational culture, alliance governance, knowledge sharing, process
improvement, and co-operative learning. Figure 1 shows the conceptual framework
and the relationship between the variables.
Trust. While trust is the
catalyst for learning in strategic alliances, the role of trust in the success
of strategic alliances is critical. Wicks (2001) argued that trust was a
critical facilitator of cooperation and a vital ingredient of QM.
Ring
and Van de Ven defined trust as “an individual’s confidence in the good will of
the others in a given group and belief the others will make efforts consistent
with the group’s goal”. (1994: 110).
Figure 1-Conceptual Framework
for QM in Strategic Alliances
Strategic Intent (Direction). Not all firms can be considered as potential candidates for
partnership and strategic alliances. Among factors considered for the
evaluation of an appropriate partner, common strategic direction is one that
needs to be taken into account. If firms entering to an alliance share common
strategic (intent) direction, such a direction helps them to have better understanding
of their mutual goals and expectations (Ellram, 1990). Lo and Yeong (2004)
pointed out that having a common strategic direction is a requirement for
effective supplier integration in strategic alliances. Gulati et al. (1994) pointed out that most
strategic alliances were neither strictly competitive nor strictly cooperative;
rather they involved mixed motives where the partners had both private and
common interests. Zollo et al. (2002)
pointed out the importance of firm-level characteristics (culture, strategic
orientation) on alliance performance.
Organizational Culture. Smith
et al. (1995) argued that similarities
in the partners’ values contributed to the level of cooperation. Since values
shape the culture of an organization, it is evident that cultural closeness
among firms facilitates communication between individuals, which is based upon
achieving mutual understanding and trust. Organizational culture has been
defined as one of the firm level variables in studying alliance performance
(Zollo et al., 2002).
Knowledge Sharing. Leaning
has been regarded as on of the major motives for strategic alliances (Morrison
and Mezenseff, 1997; Inkpen, 2005). Jones and George (1998) indicated that
leaning is achieved through sharing information and knowledge within individual
and organizations. In fact, firms enter alliances to get knowledge, information
and other sources. Koka and Prescott emphasized the role of social capital in
the formation of alliances, where they defined it as “sum of resources that
accrue to a firm by virtue of possessing a durable network of inter-firm
relationships.” (2002: 795).
Process Improvement. Both
practitioner and scholars recognize continuous improvement as one of the major
principles of quality management (Dean and Bowen 1994; Hackman and Wageman,
1995). In a recent study of strategic alliances in construction management
firms, Lo and Yeung (2004) argued that continuous improvement played an
important role in strategic alliances.
Co-operative Learning. The
term cooperative learning refers to the ability of partners in sharing
knowledge, information and resources (Morrison and Mezenseff, 1997). Organizations
develop cooperative relationship through creating a learning environment so
that they can facilitate mutual learning. Cooperative learning emphasizes the
role of cooperation in alliances, rather than competition (Morrison and
Mezenseff, 1997).
The Conceptual Model for QM within Strategic Alliances
The
proposed model for QM within strategic alliance revolves around trust and
learning. Since trust is the major ingredient of any strategic alliance, the
way trust is created within a strategic alliance will be related to the values,
attitude, and moods and feelings of parties (Jones and George, 1998). The
closer the culture of the organizations involved in strategic alliance, the
greater the level of trust. In their study with semiconductor firms, Browning et al. (1995) pointed out that cultural
difference between firms hindered productive communication among individuals in
the alliance. Arino et al. (2001)
indicated that familiarity and shared experience were sources of trust, where
differences in cultures and institutions had significant impact on trust. They
argued that trustworthiness in strategic alliances was rooted in the cultural
context of the firms within the alliance. Jones and George (1998) argued that
shared experience was related to the culture of organizations. This leads to
the generation of the first proposition.
P1: The closer the
organizational cultures are to each other, the greater the degree of
trust in the alliance (The degree of
closeness of organizational culture has positive
effect on building trust in strategic
alliance).
However,
building trust within strategic alliance is also affected by strategic intent (the
motivation for formation of the alliances). Such a motivation should range from
the economic (e.g. for economy of scale, efficiency, risk sharing), to the more
complex (e.g. learning new technologies, seeking political advantage). Parties
involved in a strategic alliance should share the same motivation for becoming
long-term partners. It should be a win-win situation for all firms and, to the
extent that organizations involved in the alliance have closer motivation and
objectives, the level of trust between them increases. Arino et al. (2001) argued that strategic
changes in each party’s goals could affect the level of trust among them. They
indicated that changes in strategic objectives posed a great threat to the
level of trust among partners. Accordingly, it is proposed that
P2: The closer the
strategic intent (direction) of the firms, the greater the degree
of trust between firms in the alliance
(The degree of closeness of strategic direction
positively affects trust).
It
has been argued that without cooperative learning the success of strategic
alliances will be limited in the long term (Morrison and Mezentseff, 1997). The
role of leaders within alliance is to provide an environment that people can
easily share their knowledge and information with each other. Successful
alliance governance develops trust. Management style and leadership is a key
element in the success of strategic alliance (Browning et al., 1995). Therefore,
P3: Effective
alliance governance (leadership) has a positive effect on building trust in a strategic alliance.
Formation
of trust helps in knowledge sharing among partners in the alliance. Koka and
Prescott (2002) indicated that firms’ commitment dedicated to building
relationships enhanced access to information, since partners shared more
information with each other. Gulati (1998) argued that trust not only enabled
greater exchange of information, it also promoted ease of interaction and a
flexible orientation on the part of each partner. Partners share information
with confidence because of the development of trust (Koka and Prescott, 2002).
Empirical research also supports that development of trust between alliance
partners affects knowledge sharing between them (Uzzi, 1996, 1997). Therefore,
it is proposed that
P4a:
Trust positively affects knowledge sharing in strategic alliances.
Trust
can lead to lower transaction cost, which leads to competitive advantage (Dyer,
1996). Empirical studies also show that trust can influence the performance of
the alliance (Gulati, 1998). Gulati et al.
(2000) argued that strategic alliance promoted trust and reduced transaction
cost. Therefore, trust directly affects performance. In the presence of trust,
organizations rely on less-detailed contracts which are costly (Gulati, 1995). Accordingly,
P4b:
Trust positively affects performance in strategic alliance.
P4c:
Trust positively affects alliance satisfaction.
Learning
within a mutual collaboration and within strategic alliance requires trust and
honesty (Crossan and Inkpen, 1995). Learning emerges through the communication
and information sharing in strategic alliances (Browning et al., 1995). In that regard, in strategic alliances, knowledge
sharing affects cooperative learning. Levinthal and March (1993) argued that
strong ties with partners in alliances resulted in exploitative learning.
P5a:
Knowledge sharing positively affects cooperative learning in strategic
alliance.
In
their study on the nature of social capital in alliances in the steel industry,
Koka and Prescott (2002) empirically showed that the nature of information
exchange (information volume and information diversity) between firms in
strategic alliances was significantly and positively related to firm
performance. Inkpen (2005) discussed the role of knowledge sharing in enhancing
organizational performance in the auto industry. Accordingly,
P5b:
Knowledge sharing affects firm performance in strategic alliances.
Morison
and Mezentseff (1997) argued that strategic alliances that incorporate shared
learning encouraged a foundation of trust and mutual respect, where by
developing cooperative learning in strategic alliances, the degree of trust
within an alliance was increased. Arino et
al. (2001) stated that the interactions between partners led to constantly
evolving relationships where the tests of loyalty and fidelity occurred
periodically. Koka and Prescott (2002) argued that a firm’s history and
experience with partners resulted in exchanging information that was rich with
value and context because of increased opportunities for learning-by-doing,
which leveraged trust. Jones and George (1998) argued that interaction among
members and organizations generated knowledge and learning, which was a form of
tacit knowledge. Accordingly, cooperative learning affects the level of trust
among partners. Arino et al. (2001)
stated that the level of trust among alliance members increased as they engaged
in the process of mutual adjustment. Mutual adjustment is the degree of responsiveness
of each partner to the circumstances in their alliance, which requires
cooperative learning. The change or absence of [cooperative] learning in
alliances affects the level of trust between partners. Zollo et al. (2002) argued that knowledge gained
thorough collaborative work between partners helped them develop a refined
understanding of each other’s culture, management style, capabilities, and
weaknesses. Such a mechanism affects the level of trust among partners. Thus,
P6a:
Cooperative learning enhances trust within the strategic alliance.
Firms
in the alliance attempt to systematically diffuse knowledge throughout their
organization (Hamel et al., 1989). Crossan
and Inkpen (1995) argued that learning was directly linked to the ability of
the firms to develop a sustainable competitive advantage. In that regard,
learning positively affects the performance of firms. Garvin (1993) argued that
continuous improvement required a commitment to learning. Knowledge acquired
within an alliance is valuable after it has been diffused through the
organization (Hamel et al., 1989). Accordingly,
learning should enhance continuous improvement of processes in firms within the
alliance.
P6b:
Cooperative learning positively affects process improvement in strategic alliances.
Continuous
improvement is defined as the ability of the firm to continuously develop its processes
(Dean and Bowen, 1994). Within the Malcolm Baldrige National Quality Award
model, research shows that process improvements affect firm performance (Wilson
and Collier, 2000). Therefore,
P7: Process
improvement positively affects performance in strategic alliance.
It
should be noted that the proposed model has some characteristics that need elaboration.
Gulati et al. (2000) argued that both
exogenous and endogenous variables could explain how strategic alliances and
networks evolved over time. In that regard, the proposed model for strategic
alliances within QM addresses this issue. The environmental variables (culture,
strategic intent) serve as exogenous variables in the model. Madhavan et al. (1998) indicated that environmental
variable should be regarded as exogenous variables. Therefore, the model covers
this issue as well.
Both
the top management perspective and the network perspective have been included
in the framework. It has been indicated that both top managers and network/institutional
perspectives were important for understanding patterns in the adoption of
innovations among organizations (Young et
al., 2001). While the role of the top manager has been recognized as one of
the key variables in the model, the network effect has been considered as well,
where its effect on building trust is unquestioned. The inclusion of top
management’s role in the model is consistent with the role of top managers in
Malcolm Baldrige National Quality Award (MBNQA) model, where it addresses the
critical role of managers in organization-wide quality improvement (Wilson and Collier,
2000, Lee et al., 2003).
VI. FUTURE RESEARCH
The
proposed model proposes two outcomes for a strategic alliance: performance and
customer [alliance] satisfaction. While performance encompasses the overall
performance of the alliance, customer satisfaction is related to each
individual firm, to the extent that each firm is satisfied with the alliance. Empirical
research is needed to determine the applicability of the proposed framework.
Westphal
et al. (1997) point out that QM
involves structures, problem solving process for identifying and solving
problems, and finding opportunities for further improvement. It has been
suggested that firms could capture, integrate, and disseminate
alliance-management know-how through the creation of separate, dedicated centers
or organizational units, whose major responsibility would be to capture past
experience (Kale et al., 2002). Having
said that, identifying tools, techniques and procedures for developing
practical tools for developing trust, generating knowledge, enhancing
organizational learning, and continuous process improvement in strategic
alliances could be considered as future research in the application of QM tools
within strategic alliances.
VI. CONCLUSION
In
this paper, a framework for strategic alliances based on the principles of
quality management has been proposed and the relationship between various
elements of the model has been established. In the proposed model, trust is the
major driver for the success of the strategic alliance which facilitates
organizational learning.
As
Mintzberg et al. indicated,
“collaboration is fundamentally a communicative process, one that includes
nonverbal, experimental and emotional communication.” (1996: 70). The success
of strategic alliances, first of all, depends on the formation of trust among
individuals from all levels and hierarchies within the alliance. Building trust
among individuals is affected by a group of variables, some are firm specific
and some are alliance-driven. According to the proposed model, a firm can affect
the initial formation of trust. However, the level of trust is also affected by
the cooperative learning in the alliance. Such learning affects process
improvement, which results in higher satisfaction and performance. Successful
alliances are those that develop a high level of trust and maintain a
cooperative learning environment.
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