Chapter 13: Virtual Alliances as Coordination and Influence Mechanisms in the Internet Context: Evidence from a Cross-Section of Internet-Based Firms
13 Virtual alliances as coordination and inﬂuence mechanisms in the Internet context: evidence from a cross-section of Internet-based ﬁrms Lalit Manral Virtual alliances are options to use tangible or intangible assets owned or controlled by partner ﬁrms to provide services. They diﬀer from other alliances in their virtuality (control). Since no partner commits specialized assets to the relationship, their ﬂexibility and ease of switching diﬀers from other forms of inter-ﬁrm cooperation. Not conﬁned to virtual ﬁrms alone, virtual alliances have been used by a variety of ﬁrms to build legitimacy, propagate standards, reach new customers, coordinate with stakeholders and potential partners, and accomplish other purposes. As competitive and organizational phenomena evocative of their era, virtual alliances present novel issues of interest to strategic management research. Virtual alliances should not be confused with conventional strategic alliances or with ﬁrms’ outsourcing arrangements in which virtuality replaces ownership of vertically related value-adding operations (Chesbrough and Teece, 1996), a 1980s practice castigated as the hollowing-out of an industrial ﬁrm (Jonas, 1985; Bettis, Bradley and Hamel, 1992). Virtual alliances can be horizontal in scope, as well as vertical, and diﬀer from conventional ‘strategic alliances’ in three salient ways: (1) they have no speciﬁc partnership commitments to duration and exclusivity, (2) they use partners’ general-use assets, but neither own assets in their own right nor commit themselves to owning them in the future; that is, they are characterized by lack of asset speciﬁcity, and (3) they are at...
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