Precarious collaboration: Business survival after partners shut down or form new partnerships

Precarious collaboration: Business survival after partners shut down or form new partnerships Businesses often benefit by forming alliances with other firms but risk becoming dependent on their partners. We discuss two situations in which dependence may create serious problems: first, if a partner shuts down and. second, if a partner forms a relationship with a new partner. We examine collaborative relationships formed by businesses operating in the U.S. hospital software systems industry during the 1961–91 period. We find that businesses faced increased risk of dissolution if they did not form new partnerships after partners shut down or formed collaborative relationships with new partners. The results have implications for developing an evolutionary theory of business strategy and performance. Our approach implies that the performance of a focal business often depends on how the strategies of its business partners evolve over time. An evolutionary theory of strategy must incorporate key characteristics of actions and relationships throughout a web of business partnerships. The dual nature of interfirm relationships, which both help a business survive at one time and inhibit its ability to adapt at another, helps explain why so many successful businesses fail when their environments change. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Precarious collaboration: Business survival after partners shut down or form new partnerships

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Publisher
Wiley
Copyright
Copyright © 1996 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/smj.4250171008
Publisher site
See Article on Publisher Site

Abstract

Businesses often benefit by forming alliances with other firms but risk becoming dependent on their partners. We discuss two situations in which dependence may create serious problems: first, if a partner shuts down and. second, if a partner forms a relationship with a new partner. We examine collaborative relationships formed by businesses operating in the U.S. hospital software systems industry during the 1961–91 period. We find that businesses faced increased risk of dissolution if they did not form new partnerships after partners shut down or formed collaborative relationships with new partners. The results have implications for developing an evolutionary theory of business strategy and performance. Our approach implies that the performance of a focal business often depends on how the strategies of its business partners evolve over time. An evolutionary theory of strategy must incorporate key characteristics of actions and relationships throughout a web of business partnerships. The dual nature of interfirm relationships, which both help a business survive at one time and inhibit its ability to adapt at another, helps explain why so many successful businesses fail when their environments change.

Journal

Strategic Management JournalWiley

Published: Jun 1, 1996

References

  • Strategic assets and organizational rent
    Amit, Amit; Schoemaker, Schoemaker
  • The nature of the firm
    Coase, Coase
  • The effect of strategic technology alliances on company performance
    Hagedoorn, Hagedoorn; Schakenraad, Schakenraad
  • Innovation and cooperation: Implications for competition and antitrust
    Jorde, Jorde; Teece, Teece
  • Community structure as interorganizational linkages
    Laumann, Laumann; Galaskiewicz, Galaskiewicz; Marsden, Marsden
  • Survival of businesses using collaborative relationships to commercialize complex goods
    Mitchell, Mitchell; Singh, Singh

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