Effects ofTechnology Cycles onStrategic Alliances

This studyexamines various issues related tothe formation ofstrategic alliances byusing thecyclical modelof technological changeconstructed by Tushman& Anderson (1986). Technology cycles offer auseful evolutionary perspective onshaping technology trajectories. Theevolution oftechnology isaresult oftechnological, social andpolitical factors. Thefour stages inthemodelinclude technological variation (stage I), era offerment(stage II),technology selection (stage III), and technology retention (stage IV).Withineachofthefourstages, issuesrelated to theformation of strategic alliances - motivations, governance modes,andtheselection ofpartners - areexplored. Theassociation betweenthecyclical modelof technological changeand theformation of alliances is empirically tested inresponse tothestatement thata missing linkexists forempirically validating themodeloftechnology cycles. Specific research questions include: Howwill thecontext of cyclical stages oftechnological changeaffect theformation of strategic alliances? In otherwords,willdifferent typesof resources andcapabilities bemostvaluable atdifferent stages of technological change? How welldoesTushmanandAnderson's theory oftechnology cycles explain technology's impact onthe formation ofstrategic alliances? Datawere594alliances inthesemiconductor industry from theSecurities DataCorporation. Findings showedthatthe modeloftechnological change isauseful framework instudying strategic alliances. Morespecifically, atthetechnology variation stage,innovation-driven alliances arethemostimportant motives. Firmslackofpromising technologies tendtoselect firmswithpromising technologies. Firmswithpromising technologies tendto selectfirmswithcomplementary capabilities. At theeraofferment, bothinnovation- and efficiency-driven alliances foroldtechnologies arethemost important motives. Dominantindustry players ineither the semiconductor industry orotherindustries surprisingly arenot thefavorable alliance partners. At thestageoftechnology selection, manufacturing-type ofalliances fornewtechnologies arethemostimportant motives. Themorefrequently adopted alliance modesaretheoneswithhighcontrol mechanisms and withequity involvement. Partners located either upstream or downstream thefocal firmarethemostfavorable choices. Atthe technology retention stage, market-driven alliances arethemost important motives. However, firmsindifferent industries or established firms intargeted markets arenotfavorable alliance partners. Thisstudy contributes totheliterature intwoways:First, it empirically tested thecyclical modeloftechnological change by Tushmanand Anderson(1986)and linkedtheeffects of technology cycles withstudies onstrategic alliances. Second, it empirically validates theargumentthatcertain typesof resources aremostadvantageous underparticular technological conditions atvarious stages oftechnology cycles. Themodel provides richsettings tostudyhow firmscopewiththeir technical environment.