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Converting alliance experience into alliance

competence

Organizational learning as a mediator between alliance experience and alliance

competence

A case study of TenCate and Thales Netherlands

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Abstract

Growing research on alliance performance failed to reduce the current number of failed strategic alliances. The role of alliance competence can act as the missing link in achieving increased alliance performance. This study explores the process of building alliance

competence through alliance experience. The mediating role of organizational learning in converting alliance experience into alliance competence is investigated. Two high-tech

MNE’s are investigated to form a cross case analysis that concluded with additional and novel insights on the dynamics of building alliance competence. Through the process of

organizational learning the conditions how firms best can built alliance competence are specified.

Keywords: strategic alliances, alliance competence, alliance experience, organizational

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Preface

This thesis embodies the last chapter of my academic life. After the bachelor Business Administration, also the master International Business and Management at the University of Groningen is now completed. The process of 6 months studying relevant literature, finding interesting and suitable firms and writing the thesis is ended.

Many people made the writing of this master thesis an insightful, challenging and pleasant experience. First, the contribution of my supervisor Miriam Wilhelm, who provided me constructive feedback and insightful ideas at any moment necessary, was of great importance for the quality of this master thesis. I am thankful for her help and support. Furthermore, I would like to thank my family, girlfriend, friends and roommates for their support, patience, faith and trust.

Where this thesis embodies the end of my academic life, it is also the beginning of something new. The lessons learned during the last 6 months will definitely be of help in my coming professional carrier. With the experiences collected throughout the realization of this thesis I became even more confident and motivated to enter this new phase in life.

Tiemen Hilbers

Groningen, March 2013

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Table of Contents

List of Tables and Figures ... 5

1 Introduction ... 6

2 Theoretical Background ... 9

2.1 Alliance competence ... 9

2.2 Alliance experience ... 12

2.2.1 Number of previously formed alliances ... 15

2.3 Alliances learning process ... 20

2.3.1 Articulation phase ... 22

2.3.2 Codification phase ... 23

2.3.3 Sharing phase ... 23

2.3.4 Internalization phase ... 24

2.3.5 Learning from alliance failures ... 25

3 Methodology ... 27

3.1 Research setting ... 27

3.2 Data collection ... 30

4 Case study analysis ... 32

4.1 Motivation for forming alliances and alliance management structure ... 32

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5 Discussion ... 59

5.1 Working propositions and interpretation of the findings ... 59

5.2 Contributions ... 62

5.3 Limitations and opportunities for further research ... 63

6 References ... 65

7 Appendix ... 74

Appendix A: Interview Mr. Spaan (TenCate) ... 74

Appendix B: Interview Henk Geerink (Thales Netherlands) ... 86

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List of Tables and Figures

List of Figures

Figure 1 Research Design

Figure 2 Number and success alliances

Figure 3 Structure involved personnel Business Development of TenCate

Figure 4 Structure involved personnel Business Development of Thales Netherlands

List of Tables

Table 1 Different focus of firms

Table 2 Content of presentations senior business developers at Thales Netherlands Table 3 Overview alliance competence

List of Appendices

Appendix A Interview Mr. Spaan (TenCate)

Appendix B Interview Mr. Geerink (Thales Netherlands)

Appendix C Extended overview process of building alliance competence

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1 Introduction

In the last two decades strategic alliances have become important mechanisms for companies to serve as a growth strategy, collecting new technology, diminishing financial risk, divide costs of research and development and to achieve and ensure competitive advantages (Elmuti and Kathawala, 2001). Nowadays, roughly every 90 seconds a new strategic alliance is formed somewhere in the world (Mowla, 2012). The phenomenon of strategic alliances is seen at all types of firms competing in every imaginable industry. Large and fast growing companies, like Microsoft, Philips and Unilever rely heavily on alliances to support their growth strategy (Mowla, 2012). As costs and risks of new products and process development are higher than ever, more and more alliances are formed in the economic landscape,

especially those with cross-national borders and cultures.

In response to the huge growth of formed strategic alliances worldwide in the last two

decades, literature concerning strategic alliances has grown exponentially both in its quantity as well as in its variety. Scholars investigated many fields of research related to strategic alliances and its role on firm performance. Bstieler and Hemmert (2010), for example, investigated the effect of trust on the success of alliances and the importance of pre-existing ties. Other researches, like De Man (2005) focus their research on organizational fit. Many other fields are investigated concerning the effects of international strategic alliances like culture (Clausen, 2010), communication (Shin, Park and Ingram, 2012) and networks (Koka and Prescott, 2008). However, despite the fact that much research is dedicated to the success of strategic alliances the percentage of failed alliances is still high. Research has proven that between 30% and 70% of all alliances fail (Bamford, Gomes-Casseres, & Robinson, 2004).

The extensive number of research concerning alliance performance is not leading to a decreasing number of failed alliances. Still firms often seem to be unable to organize a successful strategic alliance. The discrepancy between the vast research on alliance

performance and the disappointing reality could lie in the importance of alliance competence. Day (1995) stated that firms that have alliance competence have built a deep base of

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achieving alliance performance.

Alliance experience is seen as the important input for building alliance competence. Therefore learning from alliance experience can be important to build alliance competence which can increase the change for alliance performance. Emden et al. (2005) view learning from alliance experience as the extent to which an organization acquires, analyzes and appropriates

experiential alliance learning throughout the organization. The majority of all the studies focusing on alliance experience show a positive relationship between alliance experience and alliance performance. But investigating the role of alliance competence can help to untangle the process of building alliance experience and its role on alliance performance. Investigating the effects of alliance experience can contribute to the success of formed alliances in the future. However, in the existing literature there is no consensus on how to measure alliance experience.

In most research alliance experience is measured by the number of formed alliances of a company in the past. The simple underlying reasoning seems to be that the more alliances companies have formed in the past the more experienced they are in forming alliances in general. Current research concerning alliance experience is focusing more and more

thoroughly on the different specific antecedents of experience building. However, the specific process of building alliance experience and the relation between alliance experience and alliance competence is underdeveloped. Important is how firms analyze experience and find which experience is usable for which future project. Also, while so many alliances still fail after formation, questions arise whether firms can learn from the experience of alliance failures. Firms that have experienced alliance terminations will reduce the likelihood of future terminations through better alliance design as well as more effective alliance management (Pankarkan, 2009). The role of alliance failure is investigated in this thesis in order to open the discussion in literature on the importance of lessons learned of failed alliances.

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their alliance competence, which can be defined as a firm's ability to capture, share, disseminate and apply alliance management knowledge.

The thesis can be summed up in the research design showed in figure 1. First, the concept of alliance competence is discussed. What is alliance competence and how can it be built within a firm? Next, the antecedents of alliance experience are reviewed. The role of the alliance history of firms is discussed as well as their relation with alliance experience. Most important in the relation between alliance experience and alliance competence seems to be the processes of organizational learning which will be discussed in chapter 2.4.

Figure 1: Research Design

This thesis explores how alliance experience can be appropriated by analyzing, dividing and storing relevant knowledge in a firm. Alliance history is taken into account as main input of alliance experience. An alliance history contains the number of formed alliance by a firm, but also the years firms are active forming strategic alliance. Also, this thesis investigates the influence of alliance experience on the process of building alliance competences. The role of organizational learning on converting alliance experience into alliance competence to improve alliance performance is taken into account. The research question of this thesis therefore will be:

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2 Theoretical Background

2.1 Alliance competence

In literature there are different perspectives for explaining alliance success. Hunt, Lambe and Wittman (2002) divided these perspectives into four views, namely the resource-based view, the relational view, the competitive advantages view and the competence view. The important perspective relevant to this thesis is the competence view. The competence view focusses on the role of alliance management capabilities and competences (Hunt, Lambe and Wittman, 2002). When firms enable themselves to develop an organizational capability for securing, developing and managing alliances, they become successful.

Where other researchers have mentioned that the four segments of Hunt, Lambe and Wittmann (2002) are intertwined, Thomkoe and Kuemmerle (2002) state that that alliance competence is defined as a higher-order resource which is difficult to obtain or imitate and has the potential to enhance the performance and success of the alliances. Day (1995)

mentioned that firms that have alliance competence have built a deep base of experience that is incorporated into the core competency that enables them to outperform rivals in many aspects of alliance management. These many aspects can be resourced-based, relational-based and competitive-based, meaning that alliance competence can be a product of the other three views of Hunt, Lambe and Wittmann (2002), but also influence the other three views, while competence can result within all aspects of the firm in a more developed firm.

Various scholars have used many different definitions referring to alliance competence, like knowledge, mechanisms, resources, assets, capabilities and competences (Heimerink, 2008). In this thesis, the definition of alliance competence of Gammoh and Voss (2012) is followed, who view alliance competence as a firm level capability and define it as the organization’s ability for finding, developing and managing alliances. Spekman (2012) sees alliance competence as a multidimensional concept about the attitudes and behaviors that lead to success, suggesting that a firm understands the process of developing, nurturing and managing an alliance. While alliances are complex arrangements that constantly need

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that are or are not contractually agreed roles and rules (Sampson, 2005), alliance competence can act as a toolbox of acquired skills for managers to act appropriately in these given

situations. Firms that lack alliance competence tend to be relegated to second-class positions in their market (Spekman, 2012).

To acquire and utilize a set of alliance competences, firms must develop alliance strategies that help integrate different disciplines and bodies of knowledge, provide access to new technologies markets and customers, enable the acquisition of research and development and employ innovations that otherwise are too costly (Spekman, 2012). Heimeriks, Klijn and Reuer (2009) stated that alliance capability is a difficult obtainable and not mitigated organizational resource which has the potential to affect the performance of alliances positively. Sluyts et al. (2010) mention that research on alliance capability deals with the importance of internal processes, tools, specific functions and structures that aim to diffuse and capture alliance knowledge which is gathered through alliance experience. Through alliance competence, firms can leverage knowledge on the alliance management process which will not only improve the firm's ability to manage a single relationship but also its ability to manage the portfolio of all relationships (Gemünden & Ritter, 1997).

In order to build alliance competence and eventually increase alliance success, Kale and Singh (2007) mentioned three functions that firms must create. At first, firms must create a dedicated alliance function that is responsible for overseeing and coordinating the alliance activities of the firm. Secondly, a firm develops alliance competence by having greater alliance experience. The feedback generated by alliance experience helps to build alliance management skills. So the firm should not only form more strategic alliances, firms must also focus on the process of generating feedback of these formed alliances. The third function mentioned by Kale and Singh (2007) is to establish a learning process to build alliance competence. The third function suggests that organizations improve their skills to manage a given task by accumulating and applying knowledge relevant to that task. Firms can use their own experiences, or that of other firms, in order to build alliance competence.

There is consensus in the literature that alliance competence is related to alliance experience. As Levitt and March (1988) suggested, an alliance management capability is a path

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(ergo competence). Teece et al, (1997) also suggest that experience is the predominant explanatory variable for capability development, pointing to the importance of alliance experience in current research. However, current research is focusing less on alliance

experience per se, but rather on how firms leverage their experience in developing an alliance competence (Kale Dyer and Singh, 2002). Alliance experience is more and more seen as an input for building know-how. As stated by Emden et al (2005), alliance experience is only important when learning has taken place. For building and maintaining alliance competence the firm must accumulate and disseminate alliance ‘know-how’, which consists of tacit knowledge residing within managers involved in alliance activities (Kale and Singh, 2007). Alliance competence represents a set of specific skills useful in alliance relationships in which these skills are built through experience (Gammoh and Voss, 2012). Lambe, Spekman and Hunt (2002) see alliance experience as a dimension of alliance competence where in

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2.2 Alliance experience

In most research alliance experience is measured as the quantity of formed alliances of a company in the past. Research has stated that alliance success rises as it enters into more alliances (Draulans, de Man and Volwerda, 2003). In this study we will follow the definition of alliance experience mentioned by Emden et al. (2003)which views learning from alliance experience as the extent to which an organization acquires, analyses and appropriates

experiential alliance learning throughout the organization. The process of building knowledge out of alliance experience has not been discussed in literature extensively. The research of Emden et al (2003) is unique in the way that alliance experience only is given when learning has taken place. Only in recent years more research is devoted to the phenomenon of alliance experience.

For instance, Chang, Chen and Lai (2006) argue that the problem of incomplete contracts and the opportunistic behavior associated with international strategic alliances shed light on the importance of cooperative know-how between allied firms. Also Hennart and Zeng (2005) acknowledge that the main costs associated with strategic alliances arises from

misappropriation by partners because an alliance in itself is an incomplete contract that is unable to cover all eventualities and as such is a voluntary arrangement between autonomous entities which is not regulated by authoritative instructions. Das and Teng (2000) mention that since alliances are incomplete contracts and there is uncertainty in the on-going exchange process, reciprocal and reinforcing responses among the partners enable the partners to learn from each other in uncertain market condition. So importance of alliance experience is determined in current literature, but the relation between alliance performance is not clearly understood.

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the process of forming strategic alliances by increased knowledge on specific elements of this process. Improving specific steps, necessarily to build up an alliance, by repeated

engagements helps to improve the potential for alliance success on a structural basis.

Rothermael and Deeds (2006) mention that repeated engagements in strategic alliances allow the firm to create codified routine policies and procedures as well as tacit knowledge with respect to the entire range of alliance management, beginning with partner selection and alliance formation to alliance management and finally alliance termination.

But aside the great number of research concluding that alliance experience has a positive effect, there are also various researches that demonstrated that firms cannot create alliance experience by only building experience by forming more and more alliances. Alliance experience is not only a consequence of forming more and more alliances. Wassmer (2010) mentioned that explicit efforts to build routines and the institutionalization of these

mechanisms are required. Also the study of Kale, Dyer and Singh (2002) state that more than 200 organizations revealed that in the alliance context alliance experience plays a relative minor role in building alliance skills. Kale and Singh (2002) stated that a firm’s investment in a dedicated alliance function is more a significant predictor of alliance performance than alliance experience. Kale and Singh (2009) also said that firms that proactively invest in establishing a formal structure and system to manage their alliance activity are better

positioned to enjoy a higher alliance success and increased alliance value. Anand and Khanna (2000) investigated whether firms could learn to manage alliances as experience accumulates and found strong evidence that companies differ widely in their ability to create value based on experience, which they accrue to differences in alliance capabilities between firms.

Alliance experience itself can be divided into general alliance experience and partner-specific alliance experience. General alliance experience is focusing on how firms learn to manage alliances from alliance experience rather than on how firms learn to form alliances (Hoang & Rothaermel, 2005). General alliance experience can be built by repeated engagements with diverse partners, using tools, metrics and dedicated personnel to integrate knowledge

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that help firms to structure their alliance departments (Hoang & Rothaermel, 2005). Changes can be made by, for example forming a specialized alliance office, as a response to

knowledge that was collected during alliances formed by the firm.

Important to note is that alliance experience can also have a diminishing effect on alliance performance for a number of reasons stated by Hoang and Rothaermel (2005). Firstly, while firms have chosen their perfect partners to form a strategic alliance, the partners that are available for next alliance can be of less perfection, which can lead to diminishing results in future alliances. Secondly, the established routines, policies and procedures based on alliance experiences can lead to a firm that is trapped by their own competencies, because they only focus on their own alliance experience and not on additional learning opportunities. It seems that when firms stop focusing on building alliance experience but mainly focus on the use of their stored experience, new knowledge is not stored and used in order to improve the alliance performance.

While general alliance experience is collected from multiple alliances with multiple different partners, some knowledge that is collected throughout the alliance may also be partner-specific. Alliance experience may thus be as much a dyadic construct as it is a firm-level one (Hoang & Rothaermel, 2005) were lessons can be learned of the relationship between partners but also of the internal processes within one firm. So despite focusing on building general alliance experience firms can, through recurrent allying, inducing dyadic alliance partners to invest in interfirm relation-specific assets that reduce transaction costs and thus increase value created (Dyer & Singh, 1998). Improving and refining partner-specific decision making processes and conflict resolution routines can contribute to an improved alliance performance. Zollo et al. (2002) mention that learning accumulated through partner-specific alliance

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While alliance experience can help to increase the internal knowledge of firms and so increase the competence and even the alliance performance of a firm to form an alliance, it is not well investigated how alliance experience is build up and how it is used to increase alliance competences.

2.2.1 Number of previously formed alliances

The more alliances companies have formed in the past, the more experienced they are in forming alliances (Draulans, de Man and Volwerda, 2003). When a firm has a history of deep and positive experience in alliance then that firm will develop a stronger set of skills that enable effective cooperation with other firms in future relationships. On the other hand, when a firm has more negative experiences with strategic alliances, firms are less likely, on

average, to develop a strong set of enabling skills (Gammoh and Voss, 2012).

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Figure 2; Number and success. Source: Draulans, De Man and Volberda (2003) Following the statement of Draulans, De Man and Volberda (2003) it is concluded that firms evidently gain practical alliance experience with alliances. But also it is concluded that there is a limit to learning-by-doing while firms are active in multiple strategic alliances

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The statement of Sampson (2005) emphasizes the importance of building alliance competence to increase alliance performance.

So the number of alliances can also influence the alliance competence of firms. As Heimeriks (2002) point out in table 2, different levels of alliance capabilities are necessary with different numbers of alliances formed by a firm. While firms that experience a small amount of

formed strategic alliances in the past are more interested in legal knowledge, a checklist for partner selection and evaluation of individual alliances, firms that experience a large amount of formed strategic alliance are more focusing on forming a partner program, alliance

department, alliance knowledge and an alliance database. Table 2 emphasizes the difference of focus of firms with different levels of formed alliances. A process focusing on individual alliances to a more general and sustainable focus is seen when more strategic alliances are formed.

Table 1; Different focus of firms. Source: Heimeriks (2002)

Literature shows that solely information concerning the number of formed alliances in the past is not a perfect method to provide a clear and thorough picture of the role of experience on alliance success build up after these alliances. It however ensures some lessons that can contribute to an increased alliance experience and alliance competence of the firm to increase alliance performance in the future. Firms can improve their internal structure after an

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specific alliance knowledge could not be relevant for other alliances or the knowledge could not be stored in the firm.

According to Heimeriks, Klijn and Reuer (2009) firms can adopt various solutions to be able to enhance their alliance experience, which can be defined as a firm's ability to capture, share, disseminate and apply alliance management knowledge. With feedback generated from the trial and error process of numerous alliances, a firm can refine its cooperative mechanisms, its interactions and reconfigures the resource allocation to achieve better subsequent alliance performances (Klein, 1998). As firms institutionalize various experiences into cooperative routines, they enlarge their knowledge base with regard to alliance execution. Expansion of this alliance background consequently enhances the capability to anticipate and respond to alliance contingencies (Klein, 1998). But Heimeriks, Klijn and Reuer (2009) mention that alliance experience is a difficult obtainable and immitigable organizational resource.

While alliance experience can be of great interest for firms in order to improve future alliances, the experience that is build up must correlate with the new alliance cases. This means that lessons learned in a certain strategic alliance can only be relevant for that specific case and could not be relevant for a new formed strategic alliance which is formed with different goals and purposes. The experience that is build up during a certain alliance can be unrelated with the issues that alliance managers face in another alliance of the firm.

Building alliance experience is a process in which knowledge is acquired, analyzed and appropriated throughout an organization (Emden et al., 2003). This is a process that is in line with, what the literature describes as and will be discussed in chapter 2.4, organizational learning. Organizational learning is an iterative, dynamic process in which firms engage in experiences, draw inferences from them and store the inferred material for future experiences (Hayward, 2002). Alliance experience has to be converted into alliance competence in order to fully use the knowledge stored to increase to alliance performance. Experience, however, does not necessarily mean that it is of benefit for the firm. As experience ensures firms to increase the efficiency for dealing with problems, experience also can cause the effect that the learning of firms get stopped or trapped or that firms draw the wrong inferences of their experiences (Hayward, 2002). So, experience does not always improve the performance of a firm and firms must be aware of the fact that experience can cause reduced alliance

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2005). Literature concerning acquisitions of firms has stated that while experience is of great use for a manufacturing setting, whether this is also the case for strategic decisions is not concluded.

Following the paper of Hoang and Rothermael (2005), firms must take into account that building experience is an ongoing process that demands constant reconsiderations and adjustments in order to increase the alliance competence with the eventual goal to increase alliance performance for all firms involved. Alliance experience is seen as a critical input for alliance competence as it builds alliance-related know-how (Kale and Singh, 1999). Also, Teece et al. (1997) mentioned that capabilities must be built through experience since they are not easily available in the spot market. Heimerinks and Duyster (2006) state that learning mechanisms allow firms to leverage their alliance experience in order to improve alliance competence. Dispersing alliance experience through learning mechanisms is important to create firm-wide routines and also improving alliance competence (Heimerinks and Duyster, 2006). Most important of the research of Heimerinks and Duyster (2006) is that they

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2.3 Alliances learning process

The idea that strategic alliances can be an important vehicle for learning has started to be the focus of literature on alliances. However, the main focus of the existing literature is on how strategic alliances may be of use for learning purposes in the competitive business arena and not sufficiently on the internal learning dynamics of the alliances (Das and Kumar, 2007), meaning that to less literature is focusing on the internal processes of organizational learning. Das and Kumar (2007) have divided the existing literature on organizational learning into the basic themes that they represent and divided these themes into three kinds of learning that can occur in a strategic alliance. These three themes of learning are content learning, partner-specific learning and alliance management learning. Content learning refers to the ability of an alliance firm to acquire and internalize knowledge from the partner firm (Das and Kumar, 2007). When the ability of learning and internalizing knowledge of one firm is higher than their partner firm the bargaining power between the two firms may be altered. Partner-specific learning ensures that the alliance can be used as a method for learning about the capabilities and motivation of the partner to maximize value creation (Das and Kumar, 2007). Learning about the partner is of great influence on the continuation of the alliance. Finally, alliance management learning results in effective alliance management by a firm.

Important in collecting knowledge in an alliance is that the knowledge is accessible for the learning firm (Inkpen, 1998). A difference exists between inter-partner learning, which involves outlearning knowledge of the partner, and alliance learning, which is an

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familiarity can exist. Basic understandings about skills and capabilities of the firms can provide a better environment for alliance learning (Inkpen, 1998).

Strategic alliances often are formed with allied firms stationed in other countries. These international strategic alliances take along new elements that influence the knowledge transfer within an alliance. Almeide, Grant and Phene (2002) for instance, consider cross-cultural differences and national cultures as important aspects of interfirm knowledge transfer. As mentioned before, organizations must pay attention to the existence of differences in culture on both corporate and country level (Bruner and Spekman, 1997). Difference exists in language, values, customs and national traditions. Taking into account the firm’s attitude towards work and working hours of employees is important for international strategic alliances to work. The larger the cultural distance between the partners engaged in an

international strategic alliance is, the more evident are the effects of the cultural shock when it occurs (Canestrino, 2004). In international strategic alliances, cultural distance can create additional difficulties and challenges for managers who spend time on communication, design of compatible work routines and development of common managerial approaches (Olk, 1997).

In this research the definition of the alliances learning process of Kale and Singh (2007) is used which is linked to the definition of organizational learning. Kale and Singh (2007) state that the alliance learning process can be seen as a process that is directed towards helping a firm and its managers to learn, accumulate and leverage alliance management know-how and best practices. This definition finds its origin in the research of Nonaka (1994) which suggests that such a process involves four modes of knowledge conversion. The first mode enables us to convert tacit knowledge through interaction between individuals. The second mode

involves the use of social processes to combine different bodies of explicit knowledge held by individuals. The third and fourth modes relate to patterns of conversion involving both tacit as well as explicit knowledge.

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available and transferred to all personnel remotely involved with any alliance in the firm. This thesis incorporates the four steps of Kale and Singh (2007) to extensively investigate the role of organizational learning on the process of converting alliance experience into alliance competence. Were Kale and Singh (2007) linked the process of organizational learning directly to its influence on alliance performance, this thesis included the concept of alliance competence in order to create a better insight in the process using alliance experience to improve a firm’s performance. This thesis also incorporates the influences of alliances failures and the lessons that can be learned with these failures to the internalization of knowledge in a firm. Lessons learned from alliance failures and integrating these lessons in the firm can contribute to building alliance competence. The four modes of Kale and Singh (2007) and the role of alliance failures are explained in greater detail here.

2.3.1 Articulation phase

The place where all know-how and skills related managing alliances are stored are the individuals working in the firm. These individuals carry tacit knowledge gained by personnel working experiences. For companies it is important to get access to the tacit knowledge stored in each individual employee. The efforts of accessing and externalizing individually held knowledge into explicit knowledge, to the extent that it is possible, is referred to as articulation (Kale and Singh, 2007). This knowledge can be stored in the firm in many different ways. Spoken or written words, the use of metaphors, analogies or models can be used to articulate knowledge. Articulated knowledge is easy to access and store, therefore it facilitates learning (Nonaka, 1994). Kale and Singh (2007) mention at least two great benefits of articulated knowledge for alliance management. First, articulation helps a firm to store knowledge absorbed in past alliances. This knowledge usually gets lost due to changing personnel. Second, the process of articulation helps alliance managers to better review their knowledge built up in earlier formed alliances. While the process of articulation oblige managers to reflect previous alliances in order to store that information in a correct way, the information that is stored is better understood by its managers. This process helps managers to identify both effective and suboptimal execution of particular tasks during alliance formation and management (Kale and Singh, 2007).

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internal reports or presentations to share their knowledge (Kale and Singh, 2007). Other examples can be that managers in a firm keep a logbook where they report all alliance specific experiences. The process of articulation can be approached in many ways, but they are all implemented to ensure the process to convert individual tacit knowledge and experiences into explicit knowledge.

2.3.2 Codification phase

Zollo and Singh (2004) mentioned that firms can build skills and expertise to manage any possible task by codifying the task-related knowledge that exists within the firm and its managers. While many researchers view codification merely as the documentation of existing knowledge, Zollo and Winter (2002) refer to codification as a way to create and use codified resources to guide action that is built upon critical analysis and abstraction of experience associated with a specific task. Kale and Singh (2007) define codification as a process that involves creating and using knowledge objects or resources such as alliance guidelines, checklists, or manuals to assist action or decision making about future alliance situation. While the process of articulation is focusing more on the conversion of individual and tacit knowledge into explicit knowledge, codification is the process of using articulated knowledge to develop structures in which the articulated knowledge can be transferred and used by the firm in other or future alliances. The process of articulation primarily emphasizes

externalizing the content residing within individuals, as codification focusing on providing the content, the methodology and the rationale for executing and managing various alliance-related tasks (Kale and Singh, 2007).

The process of codification is used to form documents and procedures that help managers in their decisions, but can also help managers to better understand which and why certain followed steps in the process of alliance forming and managing are successful or less successful. Firms as Hewlett-Packard (Kale and Singh, 2007) and Alliander (Koster, 2008) use certain guidelines to ensure a clear process of alliance management throughout the firm.

2.3.3 Sharing phase

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alliance management knowledge, which is both tacit and or codified, through interpersonal interaction within the organization (Kale and Singh, 2007). Articulated and codified

knowledge can be shared by endorsed personal experiences and knowledge communicated by all parties. Sharing knowledge has many advantages for the firm, the managers and all

personnel involved. Communication of personnel regarding knowledge provides a mean for regularly and systematically sharing alliance management knowledge that has been articulated and codified. Also they create a place were individual tacit knowledge can be shared

throughout the communication of personnel face-to-face. Finally, it can help alliance managers to better conceptionalize the alliance knowledge that is being shared or disseminated throughout the firm (Kale and Singh, 2007). Creating discussion and encouraging communication between personnel expands the quantity of shared tacit

knowledge and enables managers to test assumptions of certain issues. Firms can use different methods of sharing knowledge, like the use of informal mechanisms as casual conversations and discussions between alliance managers, or formal mechanisms such as alliance

committees and task forces that meet periodically. Also, alliance managers can discuss their experiences with alliance managers of other firms.

2.3.4 Internalization phase

The last phase of the alliance learning process is the point where a firm has to internalize the articulated, codified and shared knowledge to ensure that new knowledge is transferred and adopted by the whole firm. The absorption of knowledge throughout the whole firm is an important step that firms have to make when they want to ensure success for more than one time. In contrast to sharing knowledge, internalization puts more emphasis on the absorption of relevant knowledge by individual receivers (Kale and Singh, 2007). Internalizing

knowledge is more than explaining the knowledge of one firm to another, it is letting

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2.3.5 Learning from alliance failures

An undiscovered contribution to organizational learning can be found in lessons learned from failed alliances. Due to the fact that more than 60% (Kelly et al., 2002) of all formed strategic alliances worldwide fail, it is important to investigate the effects of these failures on the firms involved. Although strategic alliances are of great interest of current literature, only a small amount of research is focusing on alliance failure. This is surprising while alliance failure is very costly and time-consuming for firms. Alliance failures can accelerate the necessity for firms to react and respond to the reasons of these alliance failures.

Despite the fact that failed alliances cost resources and money, many lessons can be learned from failures. Failures help us better to understand what we need to do if we want to improve (Ulmer, 2006), also it let us understand what we need to do if we want to improve. Also firms that have experienced alliance terminations will reduce the likelihood of future terminations through better alliance design as well as more effective alliance management (Pankarkan, 2009). Although the potential for learning for alliance terminations is great since they force introspection and re-examination of strategies, as with other types of experience, this learning may not accrue without conscious efforts by firms because the infrequent nature of the

termination phenomenon implies that firms have to make deliberate attempts towards

capitalizing on this learning before it is forgotten (Pangarkan, 2009). It is important for firms to be able to use experiences of failures to improve their processes in the future. But firms are often not able to use these lessons in their organization. Bazerman and Watkins (2004)

identified four ways in which organizations fail to learn from their failures. First of all, firms fail to pay close attention to potential problems both inside as outside the firm, often

originated due to arrogance, a lack of attention, or inattention. Secondly, firms fail to understand how pieces of potentially complicated information fit together to provide lessons of how to avoid crises. Thirdly, firms fail to provide sufficient rewards to people who report problems and take actions to avoid possible crises. And finally, firms fail to draw important lessons from crises and preserve their memory in the organization.

When firm are willing and able to learn from alliance failures benefits can occur in the

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3 Methodology

3.1 Research setting

In this thesis, a case study approach is chosen to attempt to generate new theory concerning the role of organizational learning as a mediator in the process of converting alliance experience into alliance competence in two representative firms active in the high-tech industry. The specific research aim is a new perception of proven quantitative literature. For this reason, a case study method approach is chosen because it is recommended as a suitable research design for building theories (Yin, 1989). The case study is a research strategy which focuses on the understanding of the dynamics present within single settings (Eisenhardt, 1989). A case study approach is an attempt to reconcile evidence across cases, types of data, different investigators and also between cases and literature which increases the likelihood of creative reframing into new theories (Eisenhardt, 1989). Other strengths of case studies are that the new theories are most likely to be testable due to the fact that they have been measured during the theory-building process. Also, the theories generated through a case study are likely to be empirical valid because the process of creating a new theory is intimately tied with the empirical evidence (Eisenhardt, 1989).

International business is a rich, open and complex field of study, partly because the world is intrinsically rich and complex, but also because international business is free from any single core paradigm, does not pursue a single dominant central research question and does not abide by generally accepted simplifying assumptions that would drive the choice of research methods and tightly bound areas of research relevance (Doz, 2011). So, international business is multidisciplinary and is influenced by many different fields of research. Many researchers have addressed the broad field of international business by investigating international

business with theories of other fields and disciplines rather than embracing the potential richness of a wide-open under-defined field (Doz, 2011).

To investigate the process of building alliance experience and transferring it into alliance competences in this thesis, a case study is selected to investigate the important elements of the evaluation of strategic alliances. This case study is used as an exploratory fashion.

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possible to validate, confirm, falsify or adapt a given theory. Qualitative research is uniquely suited to “opening the black box” of organizational processes, the “how”, “who” and “why” of individual and collective organized action as it unfolds over time in context (Doz, 2011). Yin (2009) also mentioned that exploratory case studies can best be used for `how and why` questions. Especially this use of case studies is often regarded with certain skepticism as generalization and validation is a field where quantitative research and experiments are seen as the only appropriate methodologies by many researchers (Yin, 2003). However, as this is a relatively new research area, this study will therefore follow a case study method.

The firms investigated in this thesis are TenCate and Thales Netherlands. Both firms are active in the high-tech industry. Firms active in high-tech industries are driven by innovation, meaning that that the safest road to commercial success is to develop new technologies (Tilton, 1971). Strategic alliances are often used as a method to enable firms to keep up with all the changes and be able to easily form new working methods to react to these changes.

TenCate and Thales Netherlands were chosen because they are both important players in the global high-tech industry. Both TenCate as well as Thales are high-tech firms using new technologies and knowledge as their core competence. Using a growth strategy in the form of strategic alliances is chosen multiple times in both firms to integrate or complement other technologies, systems and expertise into their own products. An inside view in the processes of building alliance experience and alliance competence can provide literature with important information on important firms and their implemented structures.

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years. The difference in the number of formed alliances is important because this number can give an insight in the level of alliance experience of both firms.

TenCate

TenCate is a multinational organization based in the Netherlands that specializes in textile technologies. The firm operates businesses in 25 countries around the world and has currently more than 4300 employees.The history of TenCate dates back to the 17th century in which the family TenCate proved to be active in the textile industry. After a merger of KSW and H. ten Cate Hzn. & Co to company TenCate is arose and over decades TenCate has developed itself to be a worldwide player and market leader in materials technology headquartered in Almelo, the Netherlands. TenCate now is active in four continents and has a turnover of over 1 billion euro and is listed on the NYSE Euronext (AMX). TenCate occupies a leading position in protective fabrics, composites for space and aerospace, antiballistics, geosynthetics and synthetic turf worldwide. TenCate combines textile technologies and basic technologies (such as chemical processes) into material technology in the development and production of

functional materials with distinctive characteristics. With a range of products and solutions mainly focused on trends in safety, protection and a sustainable environment, TenCate is constantly focused on the internationally growing need for protection of people and their working and living environment. Other themes as active protection, lightweight solutions, drinking water and other water management and sport aspects will emerge from the possibilities of the innovative products developed by TenCate.

Thales

Thales Group is a French electronic firm active in the fields of airspace, defense and information technology. The firm was founded more than a century ago in France as

Thomson-CSF. Today, the company has more than 68.000 employees and is positioned in 50 countries with a turnover of 13,03 billion in 2011 and listed on the Euronext Paris. In the year 2000 the name Thomson-CSF changed into Thales to emphasize the international allure of the firm. An important department of Thales is located in the Netherlands, headquartered in Hengelo. Thales Netherland is the biggest defense firm of Thales Group producing advanced radar equipment and ships. More or less than 2000 employees are working for Thales Netherlands, of which 1700 are working at headquarters.

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Thales Netherlands and provide 80% of the turnover of Thales Netherlands. Thales Netherlands mainly focuses on the naval industry, by building ships for war, peace, or protection purposes like surveillance, peace missions, protecting cargo and to protect ships against piracy. Every department working in the Navel industry worldwide for Thales must justify their decisions to Thales Netherlands. Other departments of Thales for the Naval industry, that need to report to Thales Netherlands, are located in Australia, Germany, UK, South Africa and Canada.

3.2 Data collection

The data for the case study is collected by interviews held with personnel actively involved in multiple alliances of the firm. For each case, a semi-structured interview was conducted. Those interviewed were high ranked professionals and responsible for the formed strategic alliances worldwide of the firms.

The interviews took place at the firm’s headquarters and lasted between 1,5 hours and 2,5 hours. The semi-structured interviews enable the interviewer to react to answers, clarify unclear answers and bring up new questions during the interview as a result of what the interviewee said. Interviews were conducted in Dutch and were audio recorded and transcribed later.

Due to the sensitivity of data concerning strategic alliances of Thales, it was requested that any information on specific alliances was not included in the thesis. Thus the thesis will only report the information of general alliance experience of both companies. The confidentiality of projects of Thales Netherlands and TenCate arises from the collaboration with

governments and ministries of defense of countries all over the world and the fear of leaking information to competitors.

The interviews were complemented by additional information of the firms, available through information of the internet, in the form of the website, articles and annual reports.

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competence and alliance success is discussed.

The semi-structured interviews held with the responsible personnel of both TenCate as well as Thales Netherlands provide information about the way both firms structured their department responsible for managing strategic alliances. The information gathered was compared with both firms in order to find different and/or comparable situations.

Besides comparing the information of the two cases the information is also compared with the current literature. All information concerning these strategic alliances is collected in order to get a complete overview of these alliances and how the firm has dealt with alliance

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4 Case study analysis

This thesis investigates the actual processes of two firms in the global market of the high-tech industry and contrasts these findings with the recent literature. Finding corresponding and contradicting practices between the literature and actual firms can contribute to the

understanding of building alliance competence out of alliance experience. This section will discuss the investigation of the processes and structures of two high-tech firms that work with strategic alliances. How are these firms structured to work with strategic alliances and how do they perceive the role of alliance experience, organizational learning and building alliance competence?

4.1 Motivation for forming alliances and alliance management structure

Both firms have discovered the possibilities of working with strategic alliances in order to expand their business and use it as an important growth strategy. But how do these two firms’ structure their processes to manage their alliances in an efficient way? This chapter will compare the information gathered from the extensive expert interviews with the responsible persons for the strategic alliances with each other and the most current and related literature.

TenCate

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Next to these two people, there is a general business developer for all the groups of TenCate (Protective fabrics, Composites, GeoIntelligence and Grasse). Within TenCate there is a hierarchical line where the business developers report to their group directors, but there is also a functional line, where the business developer report to Mr. Spaan as corporate director business development. So there is a triangular relationship between business developers, group directors and top management.

Figure 3: Structure involved personnel Business Development of TenCate

External help is sometimes hired for market research or to help writing business cases for the European commission for subsidiaries application. Also external legal personnel and external accountants are often hired. With all business developments, mergers, or acquisitions, there is a triangular relationship between the holding, the operational department and external

consultants. Management Board Corporate Director Business Development (Mr. Spaan) Senior Business Manager Innovation Business Developers for all

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The reason TenCate form strategic alliances is because they can speed up the time-to-market. As Mr. Spaan explained:

‘Although TenCate is doing very well as a technology firm in creating new products or systems, it was less successful in creating a market for it. Bundling complementary knowledge is also one of the most important qualities of partner firms in a strategic alliance.’

Thales

Thales Netherlands is divided in three business lines. Namely, naval business, radar systems and land business. The projects concerning naval business, which provides 80% of the

turnover of Thales Netherlands, is the responsibility of Mr. Geerink as the project director. In the process of bringing in projects Mr. Geerink is responsible for the teams involved. These projects are in the range of 5 to 300 million euros.

The project director is responsible for the department that is responsible for strategic alliances in the naval sector of Thales Netherlands as the project director of Thales Netherlands. Mr. Geerink is responsible for started projects in different countries and building strategic alliances with partners throughout the world in order to make the end products in the most advanced and qualified way worldwide.

Further, the department of projects of Thales Netherland is divided into twelve senior

managers who manage these projects worldwide. Also there are nine contract managers, who are managed by a legal employee. These people are involved in writing the contract and obliged to be up to date with all facets of the contract at all times. Also they must discover and report possible misalignment of payment or other contract related issues. There are also people responsible for the planning and the control of the projects and their suppliers. This is implemented in a huge system.

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Depending on the size of the projects 100 or 200 people are working in these production teams for a specific project.

Figure 4: Structure involved personnel Business Development of Thales Netherlands The business development departments of both firms are built in a very corresponding

fashion. The person responsible for the strategic alliance is placed just under the management board of the firms. Both the corporate director business development of TenCate as well as the director programs of Thales Netherlands directly reports their progress to the management board. Beneath this layer of personnel that act as leading persons concerning business

development there are business developers responsible for single strategic alliances located all over the world in both firms. These personnel are responsible for their project and report directly to their supervisor. A difference in structure between TenCate and Thales

Netherlands in the department responsible for strategic alliances is not concluded. Both firms use a straightforward structure focusing on top-down responsibilities and management where the corporate director business development at TenCate and the project manager at Thales

Management Board Thales Netherlands Naval Business Project Director Thales Netherlands (Mr. Geerink) 12 Senior Project Managers Worldwide Radar Systems

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Netherlands are responsible for their business developers with their team working on strategic alliances worldwide.

4.2 Alliance experience

To build alliance experience firms need to collect knowledge from forming alliances and learning from other firms. Research has stated that alliance success rises as a firm enters into more alliances (Draulans, de Man and Volwerda, 2003). Rothermael and Deeds (2006) mentioned that repeated engagements in strategic alliances allow the firm to create codified routine policies and procedures as well as tacit knowledge with respect to the entire range of alliance management, beginning with partner selection and alliance formation to alliance management and finally alliance termination. TenCate and Thales both have formed strategic alliances in the past which enables both firms to learn from these alliances.

4.2.1 Alliance history

Research has stated that alliance success rises as firms enter into more alliances (Draulans, de Man and Volwerda, 2003). The more alliances firms have formed in the past, the more experienced they are in forming alliances. Firms that experience a small amount of formed strategic alliances in the past are more interested in legal knowledge, a checklist for partner selection and evaluation of individual alliances, while firms that experience a large amount of formed strategic alliance are more focusing on forming a partner program, alliance

department, alliance knowledge and an alliance database (Heimeriks, 2002).The total number of formed alliances of both firms can give an inside in the level of experience they own.

The number of formed alliances of TenCate is not reported in the firm. The corporate director business development of TenCate stated:

‘The total number of alliances formed by TenCate is not reported or published due to competitor considerations. However, the probable number is around 15 or 20

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There is more cooperation within the value chain of TenCate nowadays. Also due to the declined financial situation strategic alliances are more popular than a costly merger or acquisition.

As Thales only works for projects for governments which are top secret the details of the strategic alliances could not be shared for this thesis. However, Thales is working with strategic alliance for many years now and the number of formed alliances by Thales Netherlands is estimated to be over 60 strategic alliances.

Some important strategic alliances formed by Thales as well as TenCate are discussed to emphasize the level of alliance experience both have.

TenCate

TenCate often works together with a chemical firm and sometimes forms an alliance, in order to mutually develop high standard and innovating materials and products.

An example of such a process is Defender™ M which is a product of TenCate which contains a fiber made by the company Lenzing. TenCate formed a strategic alliance with Lenzing in order to develop the product in such a way that the end user is served in the best way. Mr. Spaan as corporate director business development mentions the strategic alliances as:

‘TenCate Defender™ M sets the standard for flame-resistant military fabrics, having been specified by both the United States Army and Marine Corps as the uniform material for its ground troops in Iraq and Afghanistan.’

As corresponding with the value chain model of TenCate, they convinced the American government that only TenCate can offer the best safety and quality in the material for the American Army. Legislation had to be adjusted in order to import American raw materials into Europa, for TenCate and their partner from Austria, in order to produce the special fiber for the clothing’s.

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Another strategic alliance formed by TenCate was resulted due to the process of developing GeoTextile. GeoTextile are large cloths that are used for strengthening land and soil. This is used to strengthen dikes and sheet pilings. TenCate also wanted to have more technology in these cloths, for example to gain more information on the content of water going through these cloths or the current strength of the cloths by using the material fiberglass. This fiberglass is a product that TenCate can produce. However, to get all the information, use a databank in the correct way, or connect it with the internet, assistance from specialized firms is needed. These specialized firms own knowledge relating to specific elements, that TenCate is not familiar with, that can contribute to improve the end-product. TenCate needed to step out of their own focus of expertise to find firms with which they can collaborate and form a strategic alliance in order to make a product or system to pursue the aspired qualitative products and systems of TenCate.

Thales

Examples of strategic alliances of Thales cannot be discussed in great detail in this thesis due to the aforementioned confidentiality issues. However, the number of alliances formed by Thales is extensive, while they formed around 60 strategic alliances during the last 10 years. Thales works in a military strategic field of business. Politics have to decide, for every export product of Thales, whether it is allowed to export them. The Dutch government owns 1% of the shares of Thales in order to be able to control certain politically sensitive decisions and projects. The ministry of defense, after consultation with the marine, arranges the budgets for the projects. The process of capturing the project is planned very thoroughly.

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In these big projects, different industries and partners are often involved. In almost every project, Thales has the responsibility for system integration. Thales is responsible for the end products, like the ships and their radar systems, wiring and weapons. Thales does not provide the weapons for these ships or for any other projects. However, when a ship is sold, Thales is responsible for the whole ship, so also for the interaction between the different elements of the ships and for the quality of the weapons. The project manager of Thales Netherlands, Mr. Geerink, stated:

‘The responsibility of Thales lies in the end product. All the elements included in the end product must work correctly and must be of the greatest quality and reliability technology can offer.’

The whole ship has to function correctly and that is the responsibility of Thales. They have to make sure that the quality of the whole supply is satisfactory.

An example is that the government of Colombia is a customer of Thales Netherland and bought recently a couple of ships. While the ships made by Thales can be warships, there are also many ships made for surveillance, peace missions, protecting cargo and protecting ships against piracy. The systems of Thales are also provided for all these different missions. Depending on the different functions of the ship, the ship can be customized with

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4.3 Organizational learning

In this thesis, the role of organizational learning on the transfer of alliance experience to alliance competence is investigated. With the information generated from the case studies the four steps of articulation, codification, sharing and internalizing knowledge within both firms are located and discussed.

4.3.1 Articulation phase

As referred to in the literature part, know-how and skills related to managing alliances are stored within the individuals working in the firm. These individuals carry tacit knowledge gained by personnel working experiences. For companies it is important to get access to the tacit knowledge stored in each individual employee. The efforts of accessing and

externalizing individually held knowledge into explicit knowledge, to the extent that it is possible, is referred to as articulation (Kale and Singh, 2007).

Kale and Singh (2007) mention at least two great benefits of articulated knowledge for alliance management. First, articulation helps a firm to store knowledge absorbed in past alliances. This knowledge usually gets lost due to changing personnel. Second, the process of articulation helps alliance managers to better review their knowledge built up in earlier formed alliances.

Both firms, TenCate and Thales, introduced methods with the pure goal of taking individual knowledge and transfer it into explicit knowledge. At TenCate weekly reports are sent by the business developer located in China and the business developer responsible for innovation to the corporate director in order to provide a weekly insight in the progress of the project and on the thoughts of these business developers. These two business developers that report to Mr. Spaan directly send weekly reports. In these weekly reports, the progress of the projects is noted, with the points of attention on the top. All the other business developers meet with Mr. Spaan at least once a month on the telephone, face-to-face, or through a videoconference. In these reports individual problems and difficulties concerning the projects are written down. In this way TenCate enables each business developer to write down his thoughts on and

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Within Thales, every senior project manager responsible for a project somewhere in the world is obliged to share his lessons learned. Every month, all senior project managers, which are the managers responsible for a specific project, must travel to the Netherlands in order to present their progress to Mr. Geerink, the director programs. Mr. Geerink mentioned that:

‘I see the monthly meetings with all the senior project managers, responsible for a specific project, as the most valuable sessions when working with strategic alliances. Real experiences are shared within the firm in order to hear the information of all individuals of the firm.’

There is no prescribed format of presenting these lessons. Compelling to report lessons learned throughout the process of projects enables the firms to get access to the knowledge and thoughts of the individual project groups. Every month the project managers must report these lessons and make sure that these lessons are discussed with their whole project team in order to mention all the important details in which every individual share their concerns or believes. The knowledge and experience is collected through presentations and discussions of lessons learned from all senior managers worldwide. Mr. Geerink mentioned:

‘When you stop this structured way of evaluating and checking, information of a specific situation three months ago can already be forgotten. So every month, the most important people of the projects need to visit me to present their progress.’

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4.3.2 Codification phase

The step after articulation is the codification phase. Kale and Singh (2007) define codification as a process that involves creating and using knowledge objects or resources such as alliance guidelines, checklists, or manuals to assist actions or decision making for future alliance situations. While the process of articulation is focusing more on the conversion of individual and tacit knowledge into explicit knowledge, codification is the process of using articulated knowledge to develop structures in which the articulated knowledge can be transferred and used by the firm in other or future alliances.

In the interviews the structure of alliance evaluations of Thales and TenCate is discussed. To investigate the codification phase the information that is reported or presented to the corporate director business development of TenCate (Mr. Spaan) or to the process director of Thales Netherlands (Mr. Geerink) needs to be investigated. The presence of structured guidelines or checklists can bring an insight in the way the firms use the information gathered by

individuals.

At TenCate plans are made each time a strategic alliance is formed. In these plans milestones are mentioned. In the starting phase of the strategic alliance, the business developers need to show what the result desirable is going to be in one year and after one year of the alliance in order to see the progress of the project. So there is a plan describing how to achieve success in the strategic alliances of TenCate and from time-to-time the progress of this plan is reported. Mr. Spaan states:

‘Important is that you can be flexible as a firm with these plans in such a way that not everything have to be included in this plan. As business developer you need to be flexible, creative and innovative to manage possible setbacks. But in main points the project needs to be controlled by top management, controlling the timeliness and the milestones of the project.’

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the group directors, the corporate directors and the management board. Business development is always part of the meetings as well as discussions between all levels of the firm.

It can be seen that TenCate created many opportunities for different levels of personnel involved with strategic alliances to discuss their experiences and knowledge in order to help each other to improve their own performance. However, the focus of top management to evaluate the business developers more regularly is only recently extended. Alliance managers used to neglect to evaluate alliances in order to see what the results of alliances were. The focus of top management for these result figures collected from evaluations of formed alliances is increasing. So, managers are more and more obliged to report their progress and choices. However, a fixed structure is not developed for this kind of reporting.

At Thales Netherlands, every month, all senior project managers, which are the managers responsible for a specific project, must travel to the Netherlands in order to present their progress in front of Mr. Geerink as the director project management. The progress in

presented in a fixed set of figures and numbers which enables Mr. Geerink to quickly oversee the situation. Mr. Geerink emphasizes the importance of a strong focus and rhythm for successful business.

‘Rhythm is seen as recurrent checking the situations and progress of all projects individually. When you stop these structured way of evaluating and checking, information on a specific situation three month ago is already forgotten.’

So every month, the most important people of the projects visit the project director to present their progress. These presentations include for instance, the analysis of risks, financial

progress and margins. By using a fixed format the focus lies on the information of these specific points. Due to the structured way of presenting, striking differences concerning financial risks, technical risks, organizational risks, or the development of the project can quickly be noticed.

In these monthly meetings the progress of the projects worldwide are discussed. The

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