Asymmetric Alliances and Information Systems Advances in Information Systems Set coordinated by Camille Rosenthal-Sabroux Volume 7 Asymmetric Alliances and Information Systems Issues and Prospects Karim Saïd Fadia Bahri Korbi First published 2017 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc. Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address: ISTE Ltd John Wiley & Sons, Inc. 27-37 St George’s Road 111 River Street London SW19 4EU Hoboken, NJ 07030 UK USA www.iste.co.uk www.wiley.com © ISTE Ltd 2017 The rights of Karim Saïd and Fadia Bahri Korbi to be identified as the author of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. Library of Congress Control Number: 2017935629 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-78630-097-3 Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Part 1. Specificities of IS within Asymmetric Alliances . . . . . 1 Introduction to Part 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Chapter 1. Strategic Alliances versus Asymmetric Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.1. Strategic alliances . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.1.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1.1.2. Organizational forms . . . . . . . . . . . . . . . . . . . . 8 1.1.3. Objectives set by the partners . . . . . . . . . . . . . . 12 1.2. Asymmetric alliances . . . . . . . . . . . . . . . . . . . . . . . 17 1.2.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.2.2. Criteria for organizational and strategic asymmetry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1.2.3. Criteria for managerial asymmetry: the governance model . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 1.2.4. Geographic and sociocultural asymmetry criteria . 21 Chapter 2. Management Specificities of North and South Asymmetric Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 2.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 2.2. Organizational form . . . . . . . . . . . . . . . . . . . . . . . 25 2.3. Strategic objectives of partners . . . . . . . . . . . . . . . . 27 2.4. Nature of pooled resources . . . . . . . . . . . . . . . . . . . 30 2.5. Managerial system and control mechanisms . . . . . . . 31 vi Asymmetric Alliances and Information Systems Chapter 3. Alliance Governance by IS . . . . . . . . . . . . . . . . . 35 3.1. Information systems (IS) . . . . . . . . . . . . . . . . . . . . 35 3.1.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 3.1.2. Possible applications . . . . . . . . . . . . . . . . . . . . 35 3.2. Interorganizational information systems (IOIS) . . . . . 41 3.2.1. Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 3.2.2. Possible applications for IOIS . . . . . . . . . . . . . . 42 3.3. Analysis of the role of IS in the management of strategic alliances . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3.3.1. Formal governance tool . . . . . . . . . . . . . . . . . . 45 3.3.2. Informal governance tool . . . . . . . . . . . . . . . . . 46 Part 2. The Role of IS in the Management of an Asymmetric Alliance: Four Case Studies . . . . . . . . . . 49 Introduction to Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Chapter 4. Case ALPHA . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 4.1. Characteristics of alliance ALPHA . . . . . . . . . . . . . 57 4.1.1. Organizational form of the alliance . . . . . . . . . . . 57 4.1.2. Ends sought by each party . . . . . . . . . . . . . . . . 59 4.1.3. Resources dedicated by both parties . . . . . . . . . . 59 4.1.4. Perimeter of activity of the alliance . . . . . . . . . . 62 4.1.5. Governance model for the alliance . . . . . . . . . . . 63 4.2. The role of IS in the management of alliance ALPHA . 67 Chapter 5. Case DELTA . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 5.1. Characteristics of alliance DELTA . . . . . . . . . . . . . . 73 5.1.1. Organizational form of the alliance . . . . . . . . . . . 73 5.1.2. Ends sought by each party . . . . . . . . . . . . . . . . 75 5.1.3. Resources committed by the partners . . . . . . . . . 77 5.1.4. Perimeter of activity of the alliance . . . . . . . . . . 79 5.1.5. Governance model of the alliance . . . . . . . . . . . . 80 5.2. Role of IS in managing alliance DELTA . . . . . . . . . . 84 Chapter 6. Case KAPPA . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 6.1. Characteristics of alliance KAPPA . . . . . . . . . . . . . . 89 6.1.1. Organizational form of the alliance . . . . . . . . . . . 90 6.1.2. Ends sought by both partners . . . . . . . . . . . . . . 90 Contents vii 6.1.3. Resources committed by the partners . . . . . . . . . 91 6.1.4. Perimeter of activity of alliance KAPPA . . . . . . . . 94 6.1.5. Governance model of the alliance . . . . . . . . . . . . 95 6.2. The role of IS in managing alliance KAPPA . . . . . . . . 99 Chapter 7. Case IOTA . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 7.1. Characteristics of alliance IOTA . . . . . . . . . . . . . . . 103 7.1.1. Organizational form of the alliance . . . . . . . . . . . 103 7.1.2. Ends sought by each party . . . . . . . . . . . . . . . . . 105 7.1.3. Resources committed by the partners . . . . . . . . . 106 7.1.4. Perimeter of activity of the alliance . . . . . . . . . . . 108 7.1.5. Governance model of the alliance . . . . . . . . . . . . 110 7.2. Role of IS within alliance IOTA . . . . . . . . . . . . . . . . 112 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Introduction The number of international strategic alliances has grown considerably in recent years due to the increase in interdependency between economies resulting from the globalization of goods and services and financial markets. Subsequently, companies have had to reinforce their international strategic deployment capabilities, which have been made possible by the development of new generations of information and communications technologies. Academia has responded to this boom in strategic alliances with an abundance of research dedicated to this new theme, particularly in fields such as management sciences and industrial economics. And yet there are but few of these studies that focus on the management of asymmetric alliances, in particular between multinational corporations and companies from emerging economies1. A strategic alliance can be defined as a link between two or more individual companies with different sizes, resources and capacities originating from geographic areas characterized by uneven levels of macroeconomic development [MOU 05]. An asymmetric alliance is based on a number asymmetry criteria relying on geographic location, differences in size, 1 United Nations, Department of Economic and Social Affairs, World Urbanization Prospects, the 2011 Revision, File 5 Total Population: http://esa.un.org/unup/CD-ROM/ Urban-Rural-Population.htm. x Asymmetric Alliances and Information Systems capital and negotiating power or even experience in domestic or international collaborations and the ability to learn from one’s partners. Coordinating the activities of a strategic alliance is increasingly complex when it ties asymmetric partners separated by strategic decisions and managerial systems set in specific social and cultural contexts. These differences can be amplified by the geographic distance that separates the partners, increasing the need for joint activity to be appropriately coordinated. In this context, the use of an integrated information system can help unify shared information between collaborators and allow them to develop a common framework, reducing problems stemming from informational asymmetry and incompatibility within the alliance. In their ability to reduce the restrictions related to spatial locations, information systems help reduce the costs of acquisition and transportation as well as the costs of coordinating activities spanning different locations. They, therefore, encourage massive exchanges of data as well as increases in productivity and reactivity in decision making. As we look closer at the integration of information systems within asymmetric strategic alliances, we will study the role of these technologies as tools for workflow management, communication and sharing and collaboration between geographically distant stakeholders working toward common goals. This book is divided into two parts. Part 1 presents the specificities of asymmetric strategic alliances and will define the intellectual context of the information system and its formal and informal role in guiding strategic alliances. Part 2 is dedicated to case studies and will describe the role of information systems in managing asymmetric alliances. The organizational structure of the alliance, the ends and Introduction xi resources put forward by each party, their position in the value chain of the alliance and the selected mode of governance is presented for each case. We will then analyze the role of the information system in the formal and informal governance of said alliance. The detailed analyses of these cases will allow us to make managerial recommendations relating to the importance of information systems in communications within and between businesses, enlightened governance and decision making as well as the management of common information. PART 1 Specificities of IS within Asymmetric Alliances Asymmetric Alliances and Information Systems: Issues and Prospects, First Edition. Karim Saïd and Fadia Bahri Korbi. © ISTE Ltd 2017. Published by ISTE Ltd and John Wiley & Sons, Inc.