Fuzzy Multiple Objective Decision Making

101

9

Motivation and

Resource Allocation

for Strategic Alliances

through the De

Novo Perspective

In the past two decades, strategic alliances have become important business issues.

One aspect of these alliances is their formation. Although many theories and mod-

els such as strategic perspective, organization learning, and other explanations have

been proposed to explain alliance formation, their perspectives are usually limited

(Tsang, 1998; Borys and Jemison, 1989). Additionally, the problem of resource allo-

cation is another crucial issue and previous papers seem to discuss only why stra-

tegic alliances should be formed but fail to cover what to do next. In contrast, this

chapter proposes a holistic perspective to explain the formation of strategic alliances

and provides a method for optimal resource allocation among alliances.

In recent years, mainstream research can be summarized as the use of transaction

cost theory and a resource-based view to explain the formation of strategic alliances.

Of these two, transaction cost theory focuses on cost aspects (including transaction

and product costs), whereas the resource-based view emphasizes the combination

of resources among alliances. In our view, both theories represent reasons to form

strategic alliances and so should be considered together.

Neither transaction cost theory nor the resource-based view will provide a method

to resolve the problem of resource allocation. Traditional mathematical systems such

as linear programming and dynamic programming are valid tools for providing opti-

mal solutions in operations research areas. However, when these tools are used to allo-

cate the combined resources of alliances, synergies cannot be explained or displayed.

The reason lies in the assumption of additivity. The assumption of resource indepen-

dence does not allow a synergy effect, and so is not suitable for strategic alliances.

In this chapter, transaction cost theory and the resource-based view are combined

into what we call the de novo perspective and used to explain the formation of stra-

tegic alliances. In addition, the problem of optimal resource allocation between alli-

ances is proposed using de novo programming. We present a numerical example to

demonstrate the criteria of strategic alliances and assign optimal resource allocation.

Based on numerical results, we show that the motivation for strategic alliances

is determined by both transaction cost and rm resources. However, whether rms