Strategic alliances and networks in supply chains: knowledge management, learning and performance measurement

Abstract

This manuscript defines and analyses the concept of a strategic alliance as one specialized collaborative agreement among vertically-allied firms in the supply chain. Vertical relationships and alliances coagulate among upstream and downstream firms in an effort to form networks that are synergistic and add value beyond what an individual firm may be able to achieve. One driver to form a strategic alliance is intellectual property that serves as a base for maximizing value added within a supply chain. Multiple diverse organizations that collaborate within a supply chain compose a network. Knowledge management is introduced in the analysis of strategic alliances. Knowledge management logic helps in understanding the information-sharing aspects of a strategic alliance. Ambiguity plays a role in the extent to which information is shared. Thus, knowledge management provides novel insight into the foundations of a strategic alliance. The potential of a strategic alliance creating a real option for managers is examined along with the characteristics of networks that are organized around constant learning. Strategic-alliance performance evaluation also is addressed. Sometimes it is not appropriate to evaluate the strategic alliance based on conventional means such as profit and return on investment. Strategic alliances may involve objectives such as entering new markets, learning and obtaining new skills, and/or sharing risks and resources. When a profit centre is not part of the object of cooperation the alliance presents challenges to managers in terms of evaluation. Performance evaluation of alliances is suggested based on a certain-to-fuzzy continuum of inputs and outputs.