Strategic alliances and knowledge sharing:

synergies or silos?
Julia Connell and Ranjit Voola

Julia Connell is Associate

Professor at the College of
Graduate Studies,
University of Wollongong in
Dubai, Dubai, United Arab
Emirates.
Ranjit Voola is a Lecturer at
the University of Sydney,
Sydney, Australia.

Abstract
Purpose The purpose of this paper is to investigate the influence of a relationship marketing
orientation within a strategic alliance (referred to as the Alliance) to determine whether those firms have
achieved synergy in knowledge sharing or whether they operate as knowledge silos.
Design/methodology/approach To achieve this aim the paper takes a strategic perspective and
proposes a model based on the resource-based view of the firm (RBV) in order to discover whether
member firms can move Alliance relationships towards knowledge sharing experienced within
long-term and continuing relationships.
Findings The results of this study reveal that intangible assets, such as relationships and knowledge,
should be managed by the Alliance with the same care as would be undertaken with tangible assets.
Further, the development of a relationship market orientation (RMO) by the Alliance appears to be
crucial.
Research limitations/implications A key limitation of this paper could be considered the sample size
(although the response rate was high) and geographical location.
Practical implications Implications from the study were that, although information and knowledge
were being shared, one area of improvement would be in relation to the depth of knowledge sharing that
tended to occur on a superficial basis.
Originality/value The findings are original in terms of knowledge sharing across organizational
boundaries. There is currently very little research available that focuses on the influence of an RMO on
knowledge sharing within network groups.
Keywords Knowledge sharing, Strategic alliances, Resources
Paper type Research paper

his paper investigates whether a relationship market orientation (RMO) influences

knowledge sharing within a strategic alliance. It has generally been assumed that an
RMO creates a positive influence on organizational performance thereby creating a
competitive advantage for an organization (Sin et al., 2005). Relationship marketing has
been defined as establishing relationships with customers or other parties at a profit by
mutual exchange and fulfillment of promises (Gronroos, 1991 p. 8). Sin et al. (2005) were
the first researchers to explore what is meant by a relationship marketing orientation and
develop a reliable and valid measurement for those components which is utilized in this
paper. Although, RMO emphasizes relationships with customers, this paper applies the
concept of RMO in the context of partner relationships within a strategic alliance.

A strategic alliance is defined as a co-operative partnership between two or more

organizations formed to create competitive opportunities for their mutual advantage (Hefner,
1994). It has been argued that the primary motive for an alliance is a response to a market
opportunity between partners who would normally be in a competitive situation, resulting in a
volatile state of competitive collaboration (Doz, 1996). For alliances to be successful
Medcof (1997) argues that human resource development (HRD)-related issues such as
business and managerial skills and the compatibility of organizational cultures need

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JOURNAL OF KNOWLEDGE MANAGEMENT

VOL. 11 NO. 3 2007, pp. 52-66, Q Emerald Group Publishing Limited, ISSN 1367-3270

DOI 10.1108/13673270710752108

attention. Furthermore, he points out that there are two forms of learning that can result from
a strategic alliance:
1. the partners can obtain from each other technical knowledge about processes relating to
commercially viable technology; and
2. they can learn from each other management and business skills that individually they
were lacking.
Park et al. (2004) maintain that the establishment of strategic alliances is a critical strategy
for most contemporary firms as such relationships can help in the attainment of information
and with access to complementary resources, among other benefits. During the past
decade, the conceptualization of resources and capabilities and their management has
been extended and reshaped by a surge of interest in knowledge management (Grant,
2002) partly induced by the recognition that resources had been deployed inefficiently in the
past. Developments in knowledge management have been concerned less with data,
focusing more on organizational learning, the fostering of creativity and the management of
intellectual property. The knowledge-based view of the firm considers the organization as a
set of knowledge assets and the role of the firm in creating and deploying these assets to
create value (Grant, 2002).

Knowledge sharing as a capability the resource-based view

This paper takes a strategic perspective and proposes a model based on the
resource-based view (RBV) of the firm linking a RMO (which includes the notion of trust),
knowledge sharing and competitive advantage to the competence of a strategic alliance
(see Figure 1). Heterogeneity and immobility are at the heart of the RBV. For example, the
RBV suggests that an industry may be heterogeneous in terms of the resources they control
and these resources are imperfectly mobile across firms (Barney, 2001). This essentially
suggests that resources are valuable in and of themselves, driving the choice of strategy
and that competitive advantage is derived through a combination of unique organizational
resources in obtaining virtual monopoly positions in their respective markets (Hamel and
Prahalad, 1994). RBV is applied for two reasons:
1. Das and Teng (2000) suggest that the RBV has rarely been applied in examining strategic
alliances. They argue that the RBV provides an appropriate framework for examining
alliances as essentially they are formed to gain access to other firms valuable resources.
Increasing empirical evidence is giving credibility to this premise of RBV theorists
(Spanos et al., 2003). Previous theories that have been applied to examine alliances such
as the Transaction Cost Economics (Hennart, 1988) and Game Theory, (Parkhe, 1993)
have not emphasized the importance of the partner firms resources.
Figure 1 Relating relationship market orientation and knowledge sharing to competitive
advantage

VOL. 11 NO. 3 2007 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 53

 Where organizations share resources and information openly

with other participants they will generally seek to reduce
opportunistic behavior through the mutual understanding and
goodwill of parties.

2. By shifting the emphasis in the strategy literature from external factors (i.e. industry) to the
internal firm resources as a source of competitive advantage (Barney, 2001), RBV
provides a framework for arguing that it is the strategic importance of people within
organizations that makes the difference in gaining competitive advantage. As such, this
provides support for human resource researchers and practitioners in addition to an
improved understanding of the challenges of strategy (Wright et al., 2001).
While there has been ongoing debate about the distinction between resources and
capabilities, this paper adopts Makadoks (2001) distinction whereby a resource is viewed
as an asset that can be observed (and is not necessarily tangible) valued and traded, such
as a brand.. A capability, on the other hand, is an asset that cannot be observed (and
consequently may be intangible), or valued and is traded only in entirety. Furthermore,
capabilities alter resources by integrating them and recombining them (Eisenhardt and
Martin, 2000). As Amit and Schoemaker (1993, p. 35) elaborate, capability refers to the
organisational capacity to deploy resources, generally in combination, using organisational
processes to affect a desired end. Furthermore, capabilities are intangible and specific to
firms that are developed over time due to the interactions among the firms resources
(Conner and Prahalad, 1996).

The role of trust in inter-firm knowledge sharing

Trust has become a central concept in the study of inter-organizational collaboration (Lane
and Bachman, 1998). Increasing numbers of scholars point out that trust is the foundation of
any alliance effort (Arino et al., 2001; Howarth et al., 1995; Lynch, 1993) and for the
development and sustainability of inter-organizational collaboration (see Ring and Van de
Ven, 1992, 1994). Rather than being a resource for establishing collaborative relationships
between organizations, trust is said to be an essential component of their constitution
(Clegg, 2000). It has been argued that the primary motive for an alliance is a response to a
market opportunity between partners who would normally be in a competitive situation. This
can result in a volatile state of competitive collaboration (Doz, 1996) where trust between
competitors is even more important because the risk of opportunistic behavior is higher.
Where organizations share resources and information openly with other participants they will
generally seek to reduce opportunistic behavior through the mutual understanding and
goodwill of parties. Then again, trust is not static; it is a dynamic process that evolves
according to the development of the relationship (Clegg, 2000). Hence, an unsuccessful
alliance could end in separation.
The positive link between trust and performance has been validated over time by systematic
research efforts (Luo, 2002). Inter-party trust plays an important role in successful strategic
alliances due to the intensification of resource sharing and inter-partner learning (Luo, 2002;
Madhok, 1995).
Arino et al. (2001) maintain that regardless of the size, form, or objectives underlying a
strategic alliance, one factor that serves to distinguish them from other forms of inter-firm
behavior is the need to establish relationships between the parties that make up the strategic
alliance. Further, they put forward that the quality of relationship enjoyed by parties within the
strategic alliance will depend on the degree to which those parties have come to rely on trust
in their dealings. This is apparent from this study of the strategic alliance. For example,

PAGE 54 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007

members of this alliance banded together to come up with their own solution for the shortage
of trades people which was to employ apprentices amongst themselves:
As the trust developed between the group of companies their association and joint vision made it
easier for them to consider sharing apprentices. As was common across industry most small
businesses were not engaging their own apprentices due to a combination of factors including
their ability to provide adequate exposure to a sufficient range of skills (Alliance web site, 2005).

Of course apprentices are a tangible resource but these co-operating firms were also in the
process of building their company capital. Company capital can be manifest in three forms
according to Coleman (1988, p. 101), these are physical, human and social capital:
1. Physical capital is the tangible and financial assets of a company it is easy to measure
in monetary terms through economic and accounting systems.
2. Human capital concerns the characteristics (knowledge and education) of people
employed in a company.
3. Social capital relates to the social relations with people both within and outside of the
company. Social capital belongs to at least two parties and it takes more than one person
to build it up.
It has been suggested that interplay between the three forms of capital can help to create new
capital for example the building of social capital can lead to increases in human and physical
capital (as explored later in this paper). Levin et al. (2002) sought to determine the factors that a
knowledge seeker uses to evaluate the trustworthiness of a knowledge source and came up
with four. These were: demographic similarity (such as age and gender); organizational
similarity (such as position in the hierarchy); social capital (the presence of an ongoing
relationship between individuals) and knowledge source (credibility, discretion and receptivity).
These aspects of social capital are the focus of this paper, for as Jakobsen (2003) suggests, it
is the ability of the company to interact with relevant partners that will influence the profitability
of the entire capital and, consequently, the economic performance of the company.
The intensification of resource sharing and inter-partner learning within strategic alliances
makes trust between alliance partners even more crucial (Madhok, 1995) which is why
inter-party trust plays an important role within successful strategic alliances (Luo, 2002). The
rationale is that when alliance partners have high levels of trust in each other, they will be
more likely to be committed to, and persist with, knowledge sharing.
Knowledge sharing does not, of course, occur in isolation. Mechanisms need to be in place
to assist the sharing of information and ideas between individuals and they need to possess
the skills whereby they learn about and from each other. As such, a range of HRD strategies
can support synergies in knowledge management to enhance learning within strategic
alliances such as inter-firm HRD learning support networks, communication strategies,
benchmarking and inter-firm working groups. Grant (2002) associates a number of
knowledge processes with knowledge management. These include: knowledge creation,
acquisition, integration, sharing, replication, storage and organization, measurement and
identification that may be supported by such HRD strategies. This study will explore
relationships between the capability of relationship market orientation (comprising trust,
bonding, communication, shared values, empathy and reciprocity as per Sin et al.s (2005)
measure), knowledge integration and competitive advantage within the Alliance reported
on. Figure 1 presents the conceptual model that is hypothesized and tested.

Hypotheses development
As previously discussed Sin et al. (2005), argue that RMO is a one-dimensional construct
which includes; trust, bonding, communication, shared value, empathy, and reciprocity. This
capability provides a broader platform to understand knowledge integration and
competitive advantage in strategic alliances, as it includes other important characteristics
(as opposed to merely trust). An important insight provided by RBV is that not all capabilities
can be equally important, and consequently, potential sources of sustainable competitive
advantage (Fahy and Smithee, 1999). Therefore, several authors have proposed

VOL. 11 NO. 3 2007 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 55

characteristics of capabilities that allow them to be sources of competitive advantage (e.g.,

Amit and Schoemaker, 1993; Barney, 2001). This paper argues that a RMO possesses four
characteristics that allow capabilities to be sources of competitive advantage:
1. valuable in terms of exploiting opportunities and/or neutralising threats in the firms
environment;
2. rare among the organisations current and future competitors;
3. it must be imperfectly imitable; and
4. strategically equivalent substitutes do not exist (Barney, 2001).
Furthermore, Sin et al. (2005) empirically validate their hypothesis that RMO is related to
business performance (i.e. market share and return on investment (ROI)). Based on the
literature reviewed the following hypothesis is proposed:
H1.

RMO positively effects competitive advantage.

Knowledge transfer involves the spreading of knowledge from an individual level primarily
through fluid communication (Jerez-Gomez et al., 2005). Knowledge integration involves the
transfer of information at the group level (that is integration of the knowledge that has been
acquired at the individual level (Senge, 1990) It is argued that firms involved in strategic
Alliances are more likely to be involved in knowledge transfer and integration when the
behavioral characteristics found in RMO are present (trust, empathy, and communication).
In other words, characteristics such as trust, bonding and communication allow individual
Alliance partners to be more open, informal in their dealings with each other which facilitate
the transfer and subsequently the integration of knowledge at the macro or group level.
Therefore the following hypothesis is proposed:
H2.

A RMO positively affects knowledge transfer and integration.

This paper further argues that the correlation between a RMO and competitive advantage is
mediated by knowledge integration. In other words, the qualities embedded in relationship
market orientation (that is trust and reciprocity); provide a basis for knowledge integration,
which then provides the foundation for competitive advantage. This is because RMO creates
and shapes knowledge transfer and integration, which, in turn, determines competitive
advantage. This chain of causality implies an indirect link between RMO and competitive
advantage. Furthermore, knowledge integration by itself may not have a dramatic influence
on competitive advantage but it will produce competitive advantage when it is based on
RMO, as the link between RMO and knowledge integration is causally ambiguous and
therefore difficult to imitate by competitors. Based on the prior evidence the following
partially mediating hypothesis is proposed:
H3.

The contribution of RMO to competitive advantage is partially mediated by

knowledge integration.

The business network

The regional business network where this study took place is referred to as the Alliance
throughout this paper. Alliances may be bilateral or multilateral. The strategic Alliance reported
in this paper is multilateral in that it comprises 60 manufacturing and engineering companies
based in the Hunter Region of New South Wales, Australia. A 1994 survey of the Alliance general

When alliance partners have high levels of trust in each other,

they will be more likely to be committed to, and persist with,
knowledge sharing.

PAGE 56 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007

managers revealed that the reasons they gave for joining were related to maintaining and
improving competitiveness through sharing management know-how, training costs and
programs, engaging in joint tendering and increasing market share (Fulop and Kelly, 1995). In
2004 the authors revisited the Alliance in order to discover how effectively their joining objectives
had been achieved and the forms of learning that may have occurred among partners.
The Alliance has four membership classes. Member companies range in size from ten to 150
staff with a collective workforce of 1,500 people and a combined annual turnover of $180
million. Of the 60 members these comprise large patron organizations that support the
network, sponsors that offer service provision and support (both classes in the form of
financial support), facilities, advice and similar. General members are small-to-medium
(SMEs) that are involved in the Hunter region engineering, manufacturing and services
sector. Associates are micro-businesses that are involved in service provision or
engineering. All classes of membership have an opportunity to contribute to the network
but the focus of this study was the general members (totaling 34 member firms).
Network members are in multiple relationships with each other, the most common being
competitor and customer relationships. Other firms within the Alliance represent
relationships right along the supply chain, however, from supplier to customer and firms
representing many of the processes occurring in between. These various stakeholders
operate at both macro and micro levels macro level stakeholders would include suppliers,
contractors, customers and competitors, whereby those at the micro level are the individuals
co-ordinating and co-operating between firms (Limerick and Cunnington, 1993).
The Alliance positioning statement is the competitive edge in engineering the
competitive emphasis being a view that is reflected in much of the alliance literature as the
purpose of alliance creation (Day, 1995; Hamel, 1991; Inkpen, 1998; Iyer, 2002). Handy
(1990) predicted that networks and alliances would become increasingly popular as small
firms joined together to form a strategic mass in order to compete with larger firms. The
strategic mass known as the Alliance allows firms to use their relationships with other firms,
be they suppliers, customers or competitors, to enhance individual business capabilities
and provide greater access to market opportunities (Connell and Ryan, 1995). It is the
relationships within the Alliance that are the focus of interest for this study.

Methodology
A survey was developed in order to tap the key constructs of relationship market orientation,
knowledge integration and competitive advantage and a small number of interviews were
carried out with key Alliance members in order to determine some of the factors that would
assist in explaining the survey findings. First, the survey development and findings will be
outlined; next the interview data will be discussed before any conclusions are made.

Survey development and findings

RMO was adapted from Sin et al. (2005) and is a second order factor. The 22-item scale
included items such as We share the same worldview and we work in close cooperation.
Knowledge integration was adapted from Jerez-Gomez et al. (2005). The factor included
four items such as Being an Alliance member has not resulted in any strategic advantages
for us. Competitive advantage was adapted from Jap (1999). The four-item scale included
items such as We have gained strategic advantages over our competitors.
In all instances a seven-point Likert scale was utilized to measure these constructs. The
anchors for relationship marketing orientation, knowledge integration and competitive
advantage strongly disagree to strongly agree. The Alliance comprises of 34 members.
We received 18 surveys, which is a 53 percent response rate. Partial least square (PLS) was
used for the main analysis primarily because it is an appropriate structural equation
modeling approach for small samples (Chin and Newsted, 1999). PLS is considered a valid
approach for testing multiple relationships and is founded on a soft modeling technique
(Falk and Miller, 1992) that applies multiple indices to evaluate a theoretical model, including
R 2, average variance explained (AVE), averaged variance accounted for (AVA), regressions
weights and loadings (OCass, 2001).

VOL. 11 NO. 3 2007 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 57

As the conceptual model is one-tailed, critical ratios determined by the bootstrap method
are: 1.645 is significant at the 0.05 level, 2.326 at 0.01 and 3.090 at 0.001 level. The critical
ratios obtained from bootstrapping suggested that the outer model for the second order
construct: the relationship market orientation (trust, bonding, communication, shared value,
empathy and reciprocity) was significant. In the context of the inner model and the
hypotheses, as shown in Table I, the results suggest that that the hypothesized paths are
significant, as evidenced by critical ratios (. 1.645). Figure 2 presents the results
graphically.

The mediating effects

Both direct and indirect relationships are examined through PLS. A direct effect can be
determined by the coefficient of the path from the exogenous variable to the endogenous
variable. An indirect effect is determined by understanding the effect of a particular variable
on a second variable through its effect on a third intervening or mediating variable (Alwin and
Hauser, 1975; Igbaria et al., 1997). Consequently, it is the product of the path coefficients
along an indirect route from cause to effect via tracing arrow in the headed direct only. When
more than one indirect path exists, the total indirect effect is their sum. The sum of the direct
and indirect affect reflects the total effects of the variable on the endogenous variable
(OCass, 2001 p. 56). This logic lays as a foundation for analyzing the mediating effects of
knowledge integration on the relationships between RMO and competitive advantage.
Table II provides the results of the mediation analysis. The data suggest that RMO has a
direct positive effect on competitive advantage (0.193) and an indirect positive effect on
competitive advantage, with knowledge integration as an intervening variable (0.110); the
Table I PLS results for the theoretical model
Equation

Predicted variable

Predictor variable

Competitive advantage

Relationship market orientation

Knowledge integration

Hypothesis

Path

Critical ratio

H1
H2

0.193
0.195

1.83*
1.97*

Note: * Significant

Figure 2 The conceptual model with results

Table II Mediating effects

Independent

Intervening

Dependent

Relationship market orientation

Relationship market orientation

Knowledge integration

Competitive advantage
Competitive advantage

PAGE 58 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007

Direct effect

Indirect effect

Total effect

0.193
Na

Na
0.110

0.303

total effects increased to (0.303). This suggests that the mediation hypothesis is confirmed,
and suggests that it is partial in nature as the total effects are greater than the direct effects.
A 1994 survey of the Alliance members asked for the main reasons for joining the network
(listed below as 1-3). This survey repeated that question asking Alliance members to first, rank
these factors as (most important to least important), then indicate to what extent the objectives
had been met and their responses are listed below. A non-parametric test, the Freidman Test
was applied to identify whether any significant differences between the three objectives
existed. As the p value was less then 0.05, it can be argued that there are significant differences
between how the respondents ranked the objectives. The order of the ranking was as follows:
1. to share knowledge;
2. to gain competitive advantage; and
3. to compete in the international market.
Furthermore, when the rankings were averaged in terms of the extent to which objectives
had been met they averaged 3.4 out of 5.

Interview data
In addition to the surveys four interviews were conducted firstly with the Alliance manager
and then with three key Alliance members (one of whom had left and then rejoined the
Alliance). The member firms were selected due to their size (per number of employees),
knowledge and length of Alliance membership.
The Alliance manager was keen to know more about learning processes within the network
so invited the researchers to undertake the study and present the findings for discussion at
the Alliance yearly conference.
Table III outlines the background information covering the three firms where the interviews
were conducted. As indicated this includes the number of years the firm has been in
Table III Background information on the Alliance firms interviewed
Questions

Company 1

Company 2

Company 3

Years operating

32

40

100

Employees

40 full-time
8% part-time

50 full time
10 contractors

340 280 full-time

Remainder casual

Category

Trades, sheet metals,

boilermaking, technicians,
pipefitting

Trades backgrounds now sales

and warehousing

Products and trades

Power station, maintenance,
spec vehicles, rolling stock, ship
repair

Challenges over past three

years

Establishing markets outside of International steel prices were

the region, finding new markets. stable over time, then went
Thailand, Philippines
down now external market is
crazy cannot get enough.
Dealing with consequences of a
growing market

Coping with growth of the

company which has been 35
percent over past 12 months.
Have achieved this through
targeted markets

Response to challenges

Leading edge technology

making sure that the web site is
up to date. Working with
defence and others

Technology still grappling with

challenges

Staff expansion over 100 new

employees in past 12 months.
Staff totaled 70/80 when he
started in 1993

Interviewee

Owner
32 years
Main alliance representative

Site and regional manager

6 months
Main alliance representative

Project manager, then MD in

January 95 then Chair in
January 2000
Main alliance representative

The Alliance

Member since start of the

Alliance in 1993

Three years as a member

Was a member then pulled out

to rejoin in 2000

VOL. 11 NO. 3 2007 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 59

operation, how many employees the firm has, their type of employment contract, challenges
over the past three years, responses to those challenges, the position of the interviewee and
the number of years the firm has been an Alliance member. As can be seen from Table III
these factors vary greatly among the three firms. Firm three actually withdrew from the
Alliance for a number of years, as it was not felt to be meeting the needs of the firm. As
indicated, however, Firm three rejoined in 2000 as the Alliance manager persuaded the MD
that Alliance membership would prove beneficial for the firm.
Table IV outlines the responses that are more pertinent to the benefits and rationale for
Alliance membership. This includes whether or not Alliance membership has assisted those
firms in meeting organizational challenges, the reason why the firm belongs to the Alliance,
the type of communication they tend to have with other Alliance members and whether or not
they thought the company capital of their firms (physical, human or social as discussed
earlier) had changed as a result of Alliance membership. Asked why they interacted with
other Alliance members the interviewees responded in different ways. The firm one
interviewee (that has been an Alliance member from the start) is an owner-manager and
believes he plays a leadership role for the other network members both providing and
gaining knowledge through Alliance membership. Firm two identified networking,
knowledge sharing and corporate social responsibility as the main reasons for interacting
with other network members by this he meant giving something back to the networks other
members as well as gaining something for himself/his firm.
The type of knowledge shared amongst members ranged from business to strategic
knowledge. The firm one interviewee welcomed the opportunity to discuss business and
strategic matters with others he thought would understand his issues and be able to provide
advice. As he said with most of my staff being trades people they are not attempting to gain
Table IV Perceived outcomes of Alliance membership
Questions

Company 1

Company 2

Company 3

For what reasons do you

interact with other Alliance
members?

To share knowledge he
plays a leadership role in this
respect
Also to gain knowledge (see
below)

Great networking, there is a

variety of firms that join
Alliance that are not just
focused on steel. They can be
a quasi lobby group gives
the opportunity for local firms
to gain knowledge within the
region. Is an element of
corporate social responsibility

Business and social reasons

Type of knowledge shared

General business information

can ask questions
Marketing knowledge
mostly at his own level
(strategic) which cannot be
done in own workplace with
trades staff

Yes, because they are their

customers. Had a customer
dinner last night, another
Alliance co came because
they are customers not
Alliance members
To gain knowledge as they
are suppliers

Knowledge sharing
Have to be careful about
sharing mistakes, as may
seem incompetent to other
companies. Might do this on a
confidential level but
otherwise would be cautious

Human, physical and social

capital interaction

Definitely social capital is

prevalent which can impact on
human capital and physical
capital (particularly for smaller
firms)

Social is largest aspect, but

definitely could develop
human capital as a result.
Need well-connected
salespeople as in the
value-adding business

Definitely social there is still

healthy competition amongst
Alliance members, sharing of
resources, sub-contracting of
people and machines, etc. For
example, if there is a downturn
for one business and a person
might be laid off they can ask
another Alliance member to
take that person on for a while
rather than lose them
altogether

PAGE 60 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007

competitive advantage, improve market share and opportunities as this is solely up to me.
The firms two interviewees felt that knowledge sharing within the network was an opportunity
to build relationships more informally than when undertaking day-to-day business. Thus, it
was considered a way in which to enhance relationships. The firm three interviewee was
positive about sharing knowledge but warned that there was a need to be careful about
sharing mistakes, as otherwise our company may seem incompetent to other companies. I
might share information about mistakes we have made on a confidential level but otherwise
feel I would need to be careful.
This comment was reinforced by the survey data indicating that knowledge sharing
occurred mostly at the surface level. For example, when statements referring to knowledge
integration and transfer were posed in the survey the statements errors and failures are
discussed and analyzed amongst Alliance members and the Alliance has instruments that
allow what has been learnt in the past situations to remain valid, even when members leave
received low responses while Alliance members have a chance to talk among themselves
about new ideas, programs and activities received a high ranking response.
When asked which aspect of their company capital (physical, human or social) was
influenced most by Alliance membership all three interviewees stated that it was the social
capital. All three said that developing the social capital can impact on the other types of
capital. As the firm one interviewee stated it is definitely the social capital which dominates
as it can impact on human capital and physical capital (particularly for the smaller firms).
An example firm three interviewee gave was that people (resources) have been retained by
other Alliance companies if they have lost by another one in a downturn or due to similar
circumstances.
Other factors the interviewees said they would like from Alliance membership was to gain
and share information about: the impact of global factors, that is, what is happening in the
work environment for manufacturing. For example, is one company having a bad time or are
all in the sector, gaining specialist knowledge through guest speakers, operating as a lobby
group to government such as the current period where the region and the country are
suffering trades skill shortage. Additionally, all three interviewees had expertise they
believed they could share more formally with other members, such as the selection of
overseas agents, improving occupational health and safety and assistance in branding the
organization.

Implications and conclusions

With regard to knowledge management it has been argued that what is presented as
knowledge management is often simply information resource management (IRM) with a new
label (Hildreth and Kimble, 2002). In this instance is seems that the Alliance could improve
both knowledge and information resource management processes as there was a lack of
any attempt to capture what was shared verbally by Alliance members in any other form.
Moreover, it appears that during the interview process some Alliance members sometimes
used the terms information and knowledge interchangeably. This supports Wilsons
(2002) view that knowledge management is frequently an umbrella term for a variety of
organizational activities related to the management of information, information sharing and
the management of work practices.
Hildreth and Kimble (2002) also identify the sharing of hard and soft knowledge within
communities of practice (CoP). According to their definitions hard knowledge is articulated
and exemplified by tasks the members of the CoP perform in this case the formal meetings
and other interactions of the Alliance. Conversely, soft knowledge:
. . . is that knowledge which the newcomer cannot learn simply by demonstration or instruction. It
includes learning the language and unspoken conventions of the community. Soft knowledge is
developed and learnt through being socialized into the community and through interaction with
the existing members.

Lave and Wenger (1991) explain that newcomers learn the practice of the community by
being situated in it and from its established members. It was evident from the CoP in this

VOL. 11 NO. 3 2007 JOURNAL OF KNOWLEDGE MANAGEMENT PAGE 61

 Mechanisms need to be in place to assist the sharing of

information and ideas between individuals and they need to
possess the skills whereby they learn about and from each
other.

study, the Alliance, that deeper levels of soft knowledge sharing (such as the confidential
sharing of mistakes) were shared only when trust and established relationships had
developed between Alliance members.
Although a key limitation of this paper was the sample size, the response rate was relatively
high and the findings would be of interest to other Alliance and network groups. Furthermore,
this study focuses on a network group in one country, Australia. Although the findings may
be generalized in relation to alliances in other countries, it is important for future research to
take into account potential cultural differences in understanding such concepts as
knowledge sharing within an alliance. For example, firms in some countries may be more
open with knowledge while others may consider alliance partners to be competitors and
consequently be unwilling to share knowledge that may provide competitive advantage.
The sample comprised 18 surveys and further research could aim to study strategic
Alliances that have more members although such Alliances may not be that simple to
locate. Additionally, different capabilities that may affect knowledge integration could also
be studied. This becomes important as RBV theory suggests that interaction between
capabilities is an important factor to consider when examining the effect of capabilities on
various organisational phenomenon.
That said, the results suggest that the theoretical model functioned as hypothesized.
Essentially, the findings highlight the importance of a relationship market orientation
(comprised of trust, bonding, communication, shared values, empathy, and reciprocity) in
the context of knowledge integration and the development of competitive advantage within a
strategic Alliance context. Additionally, the development of RMO by the Alliance appears to
be crucial. First, for the Alliance members in their pursuit of competitive advantage and
second, as knowledge integration partially mediates the relationship between RMO and
competitive advantage, the use of RMO to drive knowledge integration may provide a viable
path to competitive advantage for the Alliance.
Hence, the authors suggest that a RMO should be considered as an Alliance capability.
From an Alliance perspective RMO is a philosophy of undertaking business successfully a
distinct organizational culture/value that puts relationships at the centre of the Alliances
strategic or operational thinking. RMO has been associated with providing a competitive
edge, providing a positive impact for organizational performance.
It is evident from the results of this study that the intangible assets such as relationships and
knowledge should be managed by the Alliance with the same care as would be undertaken
with tangible assets as recommended by Rylatt (2003) and Saint-Onge and Armstrong
(2004). This necessitates frequent communication and interaction between members to
strengthen relationships. The Alliance members meet on a monthly basis to share
knowledge in a relatively formal way and at other times at their yearly conference, dinners,
shared training sessions and when undertaking business with one another. Those members
that have developed closer relationships also share resources such as materials and
employees. All the interviewees recognized the value of social capital and how it can serve
to enhance both physical and human capital. This is reinforced by Jakobsen (2003), who
maintains that it is social capital of a company which activates the other two forms of capital.
He states that it is the ability of the company to interact with relevant partners that will
influence the profitability of the entire capital, and hence the economic performance of the
company.

PAGE 62 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007

The major aim of this paper was to determine whether the Alliance partner firms have
achieved knowledge synergies or whether they operate within knowledge silos. All the
evidence suggests that there would be no point in joining a network or strategic alliance if
knowledge were not shared. The emphasis on building social capital and relationships is
highly prominent from the literature. It is evident from this study, however, that information
and knowledge are being shared but one area of improvement that could be beneficial was
in relation to the depth of knowledge sharing among Alliance members that tended to occur
on a superficial basis only. As pointed out earlier this was evident both from the survey and
interview data where there was a reluctance to share learning from negative experiences or
mistakes firms had made nor was there any attempt being made to capture knowledge
from current members to assist future members.
It was also apparent that of Medcofs (1997) two forms of learning that he proposed can
occur within alliances it was the management and business skills that were most commonly
shared among Alliance members rather than the technical knowledge relating to technology.
Again, the business and management knowledge could be deepened and strengthened
over time according to the survey respondents and interviewees.
Nonetheless, as the firm one interviewee pointed out relationships take time to build and
this is a recurring theme throughout the relationship marketing and Alliance/network
literature. Iyer (2002) points out that Alliance partnerships grow over time and learning can
occur throughout the evolutionary processes that are evident as alliances develop and
change in scope, functions and strategic rationale change over a life span (Day, 1995). Ellis
et al. (1993) characterize relationship marketing as interactions, reciprocities and long term
commitments. Relationships may be contractual between organizations but it is the
interaction of people that play out the relationship. Hence, if the social interaction is positive it
will assist in strengthening trust one of the major factors that support a relationship
marketing orientation.

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About the authors

Julia Connell is an Associate Professor at the College of Graduate Studies, University of
Wollongong in Dubai, Dubai, United Arab Emirates. Research areas include contingent
employment arrangements, organizational and individual effectiveness organizational
culture, organizational change, management style, learning and skill development within
various workplace settings and situations. Julia Connell is the corresponding author and can
be contacted at: julia.connell@uowdubai.ac.ae
Ranjit Voola is a Lecturer in the discipline of Marketing, University of Sydney, Australia.
Research interests include corporate and marketing strategy, organizational learning and
culture.

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PAGE 66 JOURNAL OF KNOWLEDGE MANAGEMENT VOL. 11 NO. 3 2007