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Joseph Badaracco - The knowledge link: how firms compete through strategic alliances

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Why do successful companies let down their corporate walls, exposing their organizations and strategies to competitors? The answer, according to Joseph Badaracco is that corporations enter into strategic alliances to capitalize on knowledge: migratory knowledge, often technical in nature, which can be transferred easily between people or organizations in a formula or product, and embedded knowledge, which defines how a particular company organizes itself to do business. In todays business environment companies need to utilize each type of knowledge to sustain their competitive advantage. The challenge for todays manager is to balance the opportunities offered by open boundaries and free flowing information against the need to protect the corporationss unique advantages. Managing strategic alliances effectively will determine corporate success in the years ahead.

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title The Knowledge Link How Firms Compete Through Strategic Alliances - photo 1

title:The Knowledge Link : How Firms Compete Through Strategic Alliances
author:Badaracco, Joseph.
publisher:Harvard Business School Press
isbn10 | asin:0875842267
print isbn13:9780875842264
ebook isbn13:9780585160887
language:English
subjectJoint ventures--Management, Competition, Information resources management, Strategic alliances (Business) , Strategic planning.
publication date:1991
lcc:HD62.47.B33 1991eb
ddc:658.1/8
subject:Joint ventures--Management, Competition, Information resources management, Strategic alliances (Business) , Strategic planning.
Page iii
The Knowledge Link
How Firms Compete through Strategic Alliances
Joseph L. Badaracco, Jr.
Harvard Business School
Page iv 1991 by the President and Fellows of Harvard College All rights - photo 2
Page iv
1991 by the President and Fellows of Harvard College
All rights reserved.
Printed in the United States of America.
95 94 93 92 5 4 3 2
The paper used in this publication meets the requirements of
the American National Standard for Permanence of Paper for
Printed Library Materials Z39.49-1984.

Library of Congress Cataloging-in-Publication Data
Badaracco, Joseph.
The knowledge link: how firms compete through strategic alliances
/ Joseph L. Badaracco, Jr.
p. cm.
Includes bibliographical references and index.
ISBN 0-87584-226-7 (acid free paper):
1. Joint venturesManagement. 2. Competition. 3. Information
resources management. 4. Strategic planning. I. Title.
HD62.47.B33 1991
658.1'8dc20 90-44763
CIP
Page v
For Maria, Anna, and Luisa
Page vi
Contents
Preface
ix
Introduction
1
1. The Globalization of Knowledge
17
2. Migratory Knowledge
33
3. Product Links
53
4. Embedded Knowledge
79
5. Knowledge Links
107
6. Managing Alliances
129
7. Conclusion
147
Notes
155
Index
181

Page ix
Preface
In teaching about strategy and management at the Harvard Business School, I once concentrated on managers' tasks "inside" companies and on the competitors and markets "outside" companies. Other academics, managers, and consultants split up the world in the same fashion. Firms were, as one economist put it, islands of managerial coordination in a sea of market relationships. But this is an outdated view. Companies are now breaking down barriers which, like the Berlin Wall, have endured for decades. Their managers are now working in a world that consists not simply of markets and firms, but of complex relationships with a variety of other organizations.
Four years ago, when I began this study, I did not anticipate this conclusion. My plan was to understand why many U.S. companies had been forming strategic alliances such as joint ventures, supplier partnerships, and research consortia. This book examines these alliances in depth. But it goes further and presents them as the consequences of a deeper, potentially revolutionary change.
I have called this change the globalization of knowledge. In essence, a rapidly growing number of countries, companies, universities, and other organizations are contributing to an enormous worldwide pool of commercializable knowledge. Some of this knowledge is migratory: it moves rapidly across company and country boundaries. Other knowledge is deeply embedded in social relationships. In response, many executives are now linking their companies to other organizations in innovative ways. Thus, the focus of this book is not "the firm" as
Page x
it appears in traditional books on business and economics. It is the vast, emerging, partially charted territories of knowledge-driven relationships that now tie many companies to scores of other organizations around the world.
This is an unusual topicas a focus of scholarly effort, the subject is embryonic. Data are scarce, and many basic concepts are in flux. Only recently have scholars recognized that the complex sphere of alliances around many firms may be a full-fledged form of organization, just as important as the markets and internal activities that have been studied so carefully for decades. From a managerial perspective, too, the topic is a new one. The large-scale "strategic alliance experiment" by U.S. companies is scarcely a decade old. For these reasons, this book and the research behind it are inevitably unorthodox.
Early in my research, I realized that no single discipline, including business administration, would provide a complete perspective on the issues. Hence, I have drawn upon and synthesized ideas from scholars in several fields. Some were economists, such as Kenneth Arrow and Kenneth Boulding, who have studied the economics of knowledge; others were sociologists, such as Daniel Bell, who have studied the so-called knowledge explosion. Historians, political scientists, and some organizational theorists have studied how technology is transferred among companies, groups, or nations. Searching further afield, I drew upon ideas developed by the Oxford philosopher Gilbert Ryle and the Hungarian-born chemist and philosopher of science, Michael Polanyi. To make this research accessible to a wide range of readers, I have presented my ideas in a long interpretive essay written in ordinary English. The endnotes, however, show in detail the intellectual genealogy of ideas and findings drawn from other scholars.
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