Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm-level alliance success

In recent years, academics and managers have been very interested in understanding how firms develop alliance capability and have greater alliance success. In this paper, we show that an alliance learning process that involves articulation, codification, sharing, and internalization of alliance management know-how is positively related to a firm's overall alliance success. Prior research has found that firms with a dedicated alliance function, which oversees and coordinates a firm's overall alliance activity, have greater alliance success. In this paper we suggest that such an alliance function is also positively related to a firm's alliance learning process, and that process partly mediates the relationship between the alliance function and alliance success observed in prior work. This implies that the alliance learning process acts as one of the main mechanisms through which the alliance function leads to greater alliance success. Our paper extends prior alliance research by taking a first step in opening up the ‘black box’ between the alliance function and a firm's alliance success. We use survey data from a large sample of U.S.-based firms and their alliances to test our theoretical arguments. Although we only examine the alliance learning process and its relationship with firm-level alliance success, we also make an important contribution to research on the knowledge-based view of the firm and dynamic capabilities of firms in general by conceptualizing this learning process and its key aspects, and by empirically validating its impact on performance. Copyright © 2007 John Wiley & Sons, Ltd.