DIFFERENTIAL LEARNING AND INTERACTION IN ALLIANCE DYNAMICS - A PROCESS AND OUTCOME DISCREPANCY MODEL

Our paper develops a dynamic theory of alliances by examining certain outcome and process discrepancies that may emerge as the partners inte ract, highlighting issues that are especially relevant in knowledge in tensive alliances, such as joint R&D or product development. Firms ent er into these types of alliances to create economic value and to acqui re knowledge to enhance their competencies. The degree to which the pa rtners can realize their objectives is dependent on their absorptive c apacities and the collaborative strategies adopted by the partners. Ou tcome and process discrepancies may emerge as collaboration unfolds. O utcome discrepancies concern the ability of the partners to achieve th eir economic and learning objectives. Process discrepancies relate to the partners' satisfaction with the pattern of interaction, and affect their feelings of psychological attachment to the relationship. How t he partners assess and react to discrepancies shapes the developmental path of an alliance. The alliance flourishes in certain states but ma y collapse in others as the collaboration is subjected to environmenta l changes or shifts in the grand strategies of the partners. Guideline s for assessing and managing outcome and process discrepancies are sug gested.