Managerial Sciences Dissertations

The origins of Mutual Forbearance: Learning to Trust to Mutually Forbear

Burak Cem Konduk — Mon, 06 May 2013 04:50:16 PDT

Multi-market contact can either escalate or deescalate rivalry. Recent empirical work has revealed an inverted U-shaped relationship between multi-market contact and rivalry. These findings have lead many to suggest that mutual forbearance (MF), a switch from competition to cooperation across markets, is a natural outcome of increasing multi-market contact between two firms. Despite the relatively widespread acceptance of this suggestion, we do not have a theoretically grounded explanation for how this switch from rivalry to mutual forbearance occurs. This dissertation takes up this task. Theories of learning and trust are used as the grounding for the development of a theoretical model of the process by which multi-market rivals switch from competition to cooperation across markets. The model is tested using data from the U.S. Scheduled Passenger Airline Industry. Results support the general theoretical foundations of the model and provide new insights into the genesis of mutual forbearance.

Architecture of Firm Dynamic Capabilities across Inter-Organizational Activities: Explaining Innovativeness in the Context of Nanotechnology

Olga Petricevic — Thu, 02 May 2013 06:15:25 PDT

In this dissertation I first develop a theoretical framework that explores different components of dynamic capabilities related to firm’s boundary-spanning linkages across two different types of inter-organizational activities - alliances and networks. I argue that there are four different subsets of dynamic capabilities simultaneously at work: alliance opportunity-sensing, alliance opportunity-seizing, network opportunity-sensing and network opportunity-seizing. Furthermore, I argue that there are significant interaction effects between these distinctive subsets driving the firm’s overall effectiveness in sensing and seizing of novel and innovative external opportunities. In order to explore potential interdependencies and draw distinctions among different dynamic capability subsets I integrate concepts from the two theoretical perspectives that often neglect the emphasis of the other - the dynamic capability view and the social network perspective. I then test the hypothesized relationships in the context of firms actively patenting in nanotechnology. Nanotechnology innovations are multidisciplinary in nature and require search and discovery across multiple inter-organizational, scientific, geographic, industry, or technological domains by a particular firm. The findings offer support for the conceptualizations of dynamic capabilities as consisting of distinct subsets of capabilities for the sensing and the seizing of external new-knowledge opportunities. The findings suggest that firm’s innovativeness in an interdisciplinary scientific field such as nanotechnology is the function of the vector of multi-dimensional dynamic capabilities that are context-specific. Furthermore, the findings also suggest that there are inherent trade-offs embedded in different dimensions of dynamic capabilities when deployed across a wide range of inter-organizational relationships.

Negotiators at Work: Three Essays on Employee Negotiation Skill Development and Exhibition

Elizabeth F. Clenney — Wed, 24 Apr 2013 07:50:24 PDT

The need to negotiate is pervasive, but the ability to do so effectively is not so commonplace and is an often assumed or taken-for-granted skill. Despite the fact that people negotiate something nearly every day, be it in their personal or professional lives, very few people undergo formal negotiation skill training. In fact, most people overestimate their negotiating abilities, primarily because they never receive feedback on their skills. Consequently, this overestimation of negotiating ability often leads people to unknowingly negotiate suboptimal agreements. In other words, they can do better. In an organizational setting, many employees have to negotiate as a normal and customary part of their job; however, unlike other essential skills, such as technical skills or general communication skills, negotiation skills are not as widely taught and are frequently assumed to be mastered. Furthermore, organizations will place great emphasis on the outcomes of employee negotiations rather than the skills that lead to those outcomes. Similarly, scholarly research on negotiation seems to mimic this focus, where there are many studies related to negotiation outcomes and even general tactics (e.g., making the first offer, setting target and resistance points, etc.) prescribed to obtain outcomes. However, there is a large gap in understanding how people acquire and why they exhibit particular negotiation skills. Furthermore, the relationship between specific negotiation skills and specific negotiated outcomes has been inferred or tested indirectly in previous research. Studies in this dissertation directly examine if acquiring a particular negotiation skill set does lead to particular negotiated outcomes. This dissertation aims to set forth an initial framework for employee negotiation skill development and test key relationships to support the idea that not everyone acquires the same set of negotiation skills or are effective in every negotiation situation. This overall argument will be presented via three essays, the first proposes a theoretical framework and the second and third empirically test relationships set forth in the theory paper.

The Development and Renewal of Strategic Capabilities

Mika Tatum Kusar — Thu, 18 Nov 2010 11:02:51 PST

This dissertation examines the development and renewal of capabilities through acquisitions by drawing from absorptive capacity literature (Cohen and Levinthal, 1990; Zahra and George, 2002). This dissertation examines four interrelated questions concerning (1) the impact of acquisition experience on a firm’s absorptive capacity, (2) the role of absorptive capacity in the renewal of capabilities through acquisition, (3) the impact of capabilities renewal through acquisition on a firm’s choice of future growth mode, and (4) the impact of capabilities renewal through acquisition on post-acquisition performance. These questions are examined using FDIC data and surveys administered to top managers of banks that conducted acquisitions between October 2004 and October 2006. Results of this study suggest that a firm’s past experience with internal development and acquisition impacts the development of its absorptive capacity. Furthermore, results suggest that absorptive capacity has multiple dimensions and that the respective absorptive capacity dimensions have unique independent and joint effects on a firm’s ability to renew its capabilities through acquisition. Results also suggest that the impact of the change in capabilities on the firm’s choice of future growth mechanism largely depends on the nature of capability that changed through acquisition. When firms experience an improvement or decline in important revenue-generating capabilities that are fundamental to firm performance, the firm is more likely to pursue future acquisition to either compensate for its inability to grow by its own internal means or to exploit its improved capability in a new setting. However, when management capabilities or operational capabilities experience an improvement or a decline, the firms is less likely to pursue future acquisition in order to avoid taxing the already strained capability or to take time to fully internalize the improved capability. Results also suggest that the change in capabilities through acquisition is positively associated with a change in post-acquisition performance.

Why Do Different New Ventures Internationalize Differently? A Cognitive Model of Entrepreneurs' Internationalization Decisions

David W. Williams — Thu, 05 Aug 2010 13:30:28 PDT

What makes entrepreneurs select one international opportunity while rejecting or ignoring others? Furthermore, what makes entrepreneurs decide to exploit an international opportunity earlier or later? Two theories of internationalization provide answers to these questions: the Uppsala Model and International Entrepreneurship theory. However, these two theories provide competing answers to these questions, and empirical research offers inconsistent evidence about what influences entrepreneurs to select an international opportunity – and when to exploit the opportunity. To address these issues, I develop a cognitive model that explains when and why the predictions of these theories do (and do not) explain entrepreneurs’ behavior regarding new venture internationalization. More specifically, I propose that entrepreneurs’ internationalization decision making rests, in part, on cognitive processes of similarity comparison and structural alignment.

I use a multi-method / multi-study approach to answer the above questions. In the first study, I use verbal protocol techniques to analyze the cognitive processes of entrepreneurs as they ‘think out loud’ while making decisions on international opportunity selection and age at entry. In the second study, I use a survey plus secondary data to test if the actual decisions made by entrepreneurs on international opportunity selection and age at entry correspond to the dissertation’s predictions.

Results show that cognitive processes of similarity comparison and structural alignment underpin entrepreneurs’ internationalization decisions. Entrepreneurs rely heavily on commonalities and look for high levels of similarity between the home and host country when deciding when to internationalize their firms. Regarding entrepreneurs’ decisions on international opportunity selection, their decisions reflect the influence of both comparable and noncomparable opportunity features. Interestingly, I observe that prior international knowledge directly impacts entrepreneurs’ internationalization decisions, but also moderates the relationship between similarity considerations and entrepreneurs’ decisions on international opportunity selection.

Ultimately, I reconcile and integrate two competing internationalization theories by resolving tensions between them. I demonstrate that the different predictions of the two internationalization theories can be explained by the differential focus that entrepreneurs place on comparable and noncomparable attributes of their opportunity set. I also show the importance of taking an individual-level and cognitive view to understanding these decisions.

Opportunistic Adaptation and New Venture Growth: Exploring the Link between Cognition, Action and Growth

Andreea Kiss — Wed, 21 Jul 2010 08:53:34 PDT

This dissertation introduces the model of opportunistic adaptation to explain new venture growth. In established firms processes of change and adaptation usually imply a transition from one steady-state strategy to another and a problem oriented perspective as firms change in response to potential threats to their current positions. However, in the context of new ventures, adaptation is less about moving from one existent strategy to another and more about the entrepreneur’s effort to reach a steady state for the first time by continuously experimenting and combining resources in creative and innovative ways. The model of opportunistic adaptation rests on three key assumptions: 1.) new venture growth results from actions grounded in an opportunistic (proactive) logic; 2.) entrepreneurial cognition is viewed as an antecedent to all organizational actions leading to growth; 3.) the relationship between entrepreneurial cognition and action is influenced by industry and firm level attributes. The model is tested using quantitative and qualitative data on new ventures founded between 1996 and 2006 in technology intensive industries. The results provide partial support for the notion of opportunistic adaptation as a process in which entrepreneurial cognition, firm and industry related factors are closely intertwined. The results of the dissertation suggest that some aspects of entrepreneurial cognition, such as entrepreneurial schema focus have a more direct effect on actions related to new venture growth than others whose effect is strongly moderated by contextual influences such as industry growth and social network heterogeneity. This dissertation also finds that not all types of organizational actions associated with an opportunity logic lead to new venture growth. Of the three action types included in the model (fast, diverse and frequent) only action diversity was found to have a positive impact on new venture growth. Theoretical implications of the study results for both the literature on new venture growth and the literature on organizational adaptation, as well as practical implications are discussed.

To Forbear or not to Forbear? A Behavioral Perspective of Multimarket Competition

Ana Elisa A. Iglesias — Fri, 14 May 2010 10:34:54 PDT

Multimarket competition has become a substantial part of the modern economy. As such, it has drawn the attention of academics in both economics and strategy fields. Many studies have found empirical evidence of mutual forbearance in several industries, but despite its importance, its behavioral roots have not been explored. In my dissertation I integrate the reality of boundedly-rational decision makers into the mutual forbearance hypothesis. I apply an outgrowth of the behavioral theory of the firm – the shifting focus model of risk taking – to the study of competitive behavior. I propose a behavioral model of multimarket competition that focuses on corporate strategic decisions - market entry and exit decisions, regardless of entry mode (e.g. acquisitions) or exit mode (e.g. divestitures). This approach provides a granular view of changes in the business scope of the firms in terms of product and geographic markets served. I test my hypotheses in the U.S. property liability insurance industry over a 12-year period (1998-2008). I argue that firms follow the mutual forbearance logic as long as their performance goals are satisfied. However, under conditions of adversity, firms shift attention to recovering from the performance shortfall and their actions deviate from the mutual forbearance predictions. This dissertation shows that underperforming firms with abundant slack take longer to forbear, and underperforming firms with limited slack start forbearing sooner, as predicted. By bridging behavioral and competitive perspectives to the study of market entry and exit decisions, I underscore the value of cross-fertilization in strategy research.

An Analysis of Ecological and Social Rationality: When are Lexicographic Heuristics Preferred?

Dong-Gook Kim — Mon, 08 Feb 2010 17:07:05 PST

In their book, Gigerenzer and Selten (2001) described human being as an organism that adaptively reacts to its environment by selecting ecologically rational heuristics that are contingent on task demands; that is, adaptivity assumption. Empirical evidence of the adaptivity assumption is, however, mixed. In this paper, I review prior experiments related to testing the adaptivity assumption and criticize some of the past findings. From this criticism, the research questions are formed. The research objective of this paper is to test whether or not people choose their decision strategy as a reaction to environmental conditions. In this dissertation, the use of the take-the-best (TTB) heuristic is investigated for different treatments, which are information structure, information cost, and social rationality. Participants go through 180 trials of a pair comparison task. Using the proportion of TTB trials as a dependent variable, three hypotheses regarding the effects of three treatments are tested. The results of the experiments indicate that only the social rationality is a significant factor in promoting the TTB heuristic. Besides the test of the hypothesis, an exploratory analysis of participants’ data is presented.

R&D Investment Strategies of Firms: Renewal or Abandonment. A Real Options Perspective

Pingping Song — Mon, 08 Feb 2010 17:07:04 PST

This research develops a real options perspective framework for firms‘ valuation of strategic investments. I propose that a real options perspective can provide an effective means of re-examining and revising firms‘ strategic investment decisions in general, and of making individual, investment-level abandonment decisions in particular. The principal purposes of this research are to explore whether firms make abandonment decisions in accordance with real options theory, and the relative strength of the traditional economic theory, the behavioral theory of the firm and real options theory in explaining firms‘ abandonment decisions. I develop a set of hypotheses in the context of firms‘ R&D investment strategies in the world chemical industry. Using U.S. patent renewal data, I empirically test the hypotheses. The results from the empirical analyses suggest that, 1) firms‘ actual innovation abandonment decisions are consistent with the predictions made from real options theory; and 2) a real options perspective provides better explanation of firms‘ abandonment decisions than traditional economic theory and the behavioral theory of the firm. Therefore, taking such a perspective allows us to better predict abandonment than the other models. In investigating whether insights from real options theory enlighten firm‘s abandonment decisions, this research contributes to the strategic decision making literature, real options research, RBV and dynamic capability research and innovation literature.

Exploring the Relationship between Supply Network Configuration, Interorganizational Information Sharing and Performance

Marcia Daley — Mon, 08 Feb 2010 17:07:03 PST

ABSTRACT EXPLORING THE RELATIONSHIP BETWEEN SUPPLY NETWORK CONFIGURATION, INTER-ORGANIZATIONAL INFORMATION SHARING AND PERFORMANCE By MARCIA DALEY August 2008 Committee Chair: Dr. Subhashish Samaddar Major Department: Decision Science Critical to the success of a firm is the ability of managers to coordinate the complex network of business relationships that can exist between business partners in the supply network. However many managers are unsure on how best to leverage their resources to capitalize on the information sharing opportunities that are available in such networks. Although there is significant research on information sharing, the area of inter-organizational information sharing (IIS) is still evolving and there is limited research on IIS in relation to systemic factors within supply networks. To help fill this gap in the literature, a primary focus of this dissertation is on the relationship between the design of the supply network and IIS. The design of the supply network is characterized by the supply network configuration which is comprised of (1) the network pattern, (2) the number of stages in the supply network, and (3) where the firm is located in that supply network. Four different types of IIS are investigated, herein. These types of IIS are a function of the frequency with which information is shared and the scope of information shared. Type 1 (Type 2) IIS is the low (high) frequency state where only operational information is shared. Similarly, Type 3 (Type 4) is the low (high) frequency state where strategic information is shared. The argument is that the type of IIS varies depending on the configuration of the supply network and that this relationship is influenced by the coordination structure established between firms in the network. The second focus of this dissertation deals with the relationship between IIS and performance. Research findings on the benefits to be gained from IIS have been ambiguous, with some researchers claiming reduced cost in the supply network with IIS, and others finding minimal or no benefits. To add clarity to these findings, the role that uncertainty plays in the relationship between IIS and performance is examined. The thesis presented is that the positive relationship between IIS types and the performance of the supply network is impacted by process uncertainty (i.e. the variability in process outcomes and production times), and partner uncertainty. Social network theory and transaction cost economics provide the theoretical lens for this dissertation. A model is developed and will be empirically validated in a cross-sectional setting, utilizing a sampling frame randomly selected and comprised of supply management executives from various industries within the United States.

Perceived Organizational Support: Self-Interested or Other-Interested?

Debra Dookeran — Mon, 08 Feb 2010 17:07:03 PST

A new research model of Perceived Organizational Support (POS) was proposed and tested. This model proposed that moral reasoning would moderate the relationships between six justice constructs and POS. The six justice constructs were distributive justice for self, coworkers, and employees in general as well as procedural justice for self, coworkers, and employees in general. The model was tested using two studies. Study 1 consisted of 284 students at a large southeastern university, while Study 2 was comprised of 215 employees from multiple organizations. The hypothesized relationships of the model were tested using hierarchical moderated regression analysis. Overall, while the results were consistent with most prior research, there was no support for the moderating role of moral reasoning that was proposed. The findings and implications of both Study 1 and 2 are discussed. Directions for future research are also suggested.

Network Effects on New Venture Internationalization: A Network-Knowledge Framework

Jifeng Yu — Mon, 08 Feb 2010 17:07:02 PST

This study was designed to explore the research question: How do alliance networks of a new venture affect the venture’s speed of internationalization? To address this question, this paper builds a theoretical framework, from the network perspective, to systematically examine the effects of multiple network constructs. The constructs included in the paper represent two different approaches in the network literature, the network content approach and the network structure approach. A set of longitudinal data of new ventures in the U.S. biotechnology industry was collected and employed for data analysis. The results show that both network content (number and features of alliances and characteristics of partners) and network structure (network density) are important to new ventures’ speed of internationalization. As an important finding of this study, the moderating role of network density in new ventures’ speed of internationalization is contingent on the type of knowledge transferred in the network.

Effects of Free Riders and Incentive Discrimination on Customer Acquisition and Retention Resource Allocation

Geng Wang — Mon, 08 Feb 2010 17:07:02 PST

How should a company best allocate its spending between acquisition and retention? Under what condition should a company devote resources and money to analytics? The above questions are just examples of more general issues concerning many companies when managing their customer acquisition and retention programs. To answer the above questions, I will conduct a study on the allocation of financial resources between incentives that target different types of customers, and the allocation of resources between incentives and analytics spending. This research first distinguishes between customers and acquisition, between incentive and price discount, and between acquisition and retention. It then proposes a new concept, “free rider”, in a customer acquisition and retention context. Building on the free-rider concept, two mathematical models are formulated to examine the optimal allocation between acquisition incentive, retention incentive, and analytics spending. Closed-form solutions are reached for both models and the results are interpreted in the context of marketing practice. The conditions leading to different patterns of optimal solutions of analytics spending, acquisition incentives, and retention incentives are discussed. Specifically, the detailed conditions under which the optimal acquisition incentives is zero or non-zero, the optimal retention incentives is zero or non-zero, and the optimal analytics spending is zero or non-zero, are provided. Factors determining the ceiling for acceptable level of cost of analytics are also examined.

An Examination of Linkages between Personality, Leader-Member Exchange, and the Psychological Contract

Mark George Kunze — Mon, 08 Feb 2010 17:07:01 PST

Abstract An Examination of Linkages Between Personality, Leader-Member Exchange, and the Psychological Contract By Mark George Kunze 2005 Committee Chair: Dr. Edward Miles Major Department: Management While previous research has focused mainly on relationships between various personality variables and either leader-member exchange or psychological contract violation, none has yet to examine how these constructs are linked. A model of these proposed relationships is developed based on theory drawn from literature in the areas of social psychology, leader-member exchange, and psychological contracts. The present research used structural equation modeling to examine the strength of the relationship between the personality variables of negative affect, positive affect, self-monitoring, and trait cynicism with respect to leader-member exchange and perceptions of psychological contract violation. Positive affect and negative affect were found to significantly relate to both LMX and the perception of psychological contract violation. Trait cynicism was not significantly related to LMX and only weakly related to perceptions of psychological contract violation. It was hypothesized that LMX would partially mediate the relationships between the individual personality factors and perceptions of psychological contract violation; however, the data did not support this hypothesis. While self-monitoring was hypothesized to moderate the relationship of positive affect, negative affect, and trait cynicism with LMX, the moderating effect was found to be significant only for the negative affect/LMX relationship.

Deregulation, Uncertainty, and Information Technology in the Electric Utility Industry: A Transaction Cost Interpretation of the Drivers and Consequences of Vertical Disintegration

Maurice L. McNaughton — Mon, 08 Feb 2010 17:07:00 PST

The choice of firm boundaries is one of the most fundamental elements of organizational strategy. It determines industry positioning, enables the development and leverage of distinctive capabilities, and ultimately establishes the basis for sustainable competitive advantage. In the modern economy, organizational unbundling and vertical disintegration has become a recurrent theme across many industries, reflecting a major transformation in industrial organization and firm strategy. What are the drivers of this modern trend of vertical disintegration? How do we reconcile this modern phenomenon with the vertical integration logic of previous decades? Beginning with Transaction Cost Economics (TCE) as the underlying framework, we draw from the Information Processing, Coordination and Capabilities literatures to develop an integrated theoretical framework for examining and rationalizing the determinants of vertical disintegration. The recent restructuring of the US electric utility industry provides a suitable empirical context to undertake a rigorous examination of this theoretical framework: a context that manifests institutional heterogeneity, high levels of uncertainty, intense coordination requirements, and a variety of competing market and organizational institutions in transition. We employ multi-level modeling techniques, to account for firm heterogeneity and time-variant institutional parameters in our longitudinal panel data, thus allowing for a richer analysis of institutional effects. The results show that there has been systematic vertical disintegration in the electric utility industry over the period of study, 1994-2002, influenced by both firm-level and state/federal-level institutional factors as well as structural market attributes, which serve as proxies for demand and supply uncertainty. Using IT investment intensity as a proxy for firm-level IT Capability, we also established an overall significant negative effect of IT on vertical integration, consistent with previous studies about the effects of IT on firm size. The main findings confirmed several standard TCE propositions, and also address several known shortcomings, most notably the ambiguity in the treatment of uncertainty. In addition, the robust examination of the empirical evidence associated with the restructuring of the Electric Utility industry allowed us to isolate the relative effects of various institutional mechanisms and structural market attributes. These findings help to illuminate the understanding and ultimately the programming of deregulation effects.

The Impact of Motivation and Conflict Escalation on the Five Zone Model for Preferred Conflict Handling and Managerial Decision Making

Dewey Wilson Todd — Mon, 08 Feb 2010 17:07:00 PST

ABSTRACT THE IMPACT OF MOTIVATION AND CONFLICT ESCALATION ON THE FIVE ZONE MODEL FOR PREFERRED CONFLICT HANDLING AND MANAGERIAL DECISION MAKING BY DEWEY WILSON TODD JULY 2005 Committee Chairmen: Dr. Peter Zhang and Dr. Craig Hill Major Department: Managerial Sciences (Decision Sciences) The Todd-Cambridge Preferred Conflict-Handling Mode (PCHM) Instrument is an example of a two-dimensional, five zone model, similar to the Thomas-Kilmann Conflict Mode Instrument, used to explain how individuals deal with situations in which their desires are in conflict with another individual or group. The instrument, developed for this research, was based on the Managerial Grid (Van de Vliert & Kabanoff, 1990). The two variables in the PCHM model are Assertiveness and Cooperativeness. Two additional interacting, independent variables (Motivation and Conflict Escalation) were posited to affect a sudden change in subject action under situations wherein there are different views of recommended decisions. The third variable being explored by this research is “Motivation”. This represents a measure of one’s degree of attachment with respect to a decision. Motivation may originate in compensation, personal regard or an emotional attachment. The primary theory was that while assertiveness and cooperativeness may be statistically uncorrelated, although interdependent for the purposes of categorization (Van de Vliert & Kabanoff, 1990), motivation creates an interaction effect with the other two variables and can be shown by inserting either a negative or positive motivational vignette between two administrations of the PCHM instrument. In other words, when one is highly motivated on a decision component there will be a predictable change in PCHM. Five of ten hypotheses were supported (null rejected) in investigating the effect of motivation. The fourth variable explored was “Conflict Escalation” – also introduced in the form of a vignette. The purpose was to determine the effect on PCHM when a normal group decision making environment suddenly intensified in conflict. Individuals are classified according to the five preference categories, with one primary preference generally emerging. The research question here was, “…as conflict escalates, does the dominant preference score of the individual change significantly?” This could potentially affect communication and make participants more disparate. In two of the five hypotheses, this theory was supported. The conclusion was that, although PCHM has traditionally been considered static, it can be affected suddenly and with a degree of predictability. This can be evidenced through motivation and conflict escalation.

Analysis of Resource-Sharing Decisions in Dyadic Collaborative Knowledge Creation: A Game-Theoretic Approach

Savitha Namuduri — Mon, 08 Feb 2010 17:06:59 PST

Knowledge is an asset that can give an organization competitive edge. However, knowledge creation is an expensive activity. One of the reasons organizations form knowledge creation collaborations is to share resources that are needed to create knowledge. This dissertation models the dyadic collaborations as games between the partners and arrives at resource-sharing schemes for them. Specifically, the collaborations are modeled as two games- Stackelberg Leader-Follower game and Partnership game. The types of collaborations are distinguished based on the nature of the marginal return functions with respect to knowledge creation investments for each of the collaborating organizations. Three essays are presented and discussed. In Essay 1, collaborations between organizations characterized by decreasing marginal returns with respect to investments are modeled as a partnership game. In Essay 2, collaborations between organizations characterized by increasing marginal returns with respect to investments are modeled as a Stackelberg Leader-Follower game. In Essay 3, collaborations where the leader organization is characterized by decreasing marginal returns with respect to investment and the follower organization is characterized by increasing marginal returns with respect to investments are studied. The solutions for the game in terms of the participation rate, knowledge creation investments, and the system gain are presented for each essay. The results are analyzed and the observations are stated as propositions. The propositions provide guidelines for collaborating organizations to arrive at a resource-sharing scheme. Additionally, the results suggest conditions under which the potential partners collaborate specifically with respect to the participation rate and the system gain. The results of Essays 2 and 3 provide conditions for participation rate. The results of Essay 3 provide the conditions of expected system gain under which the follower organization will collaborate with a potential leader organization. The results have implications for several stages of the alliance management process such as partner selection, gauging the behavior of potential and current partners, and renegotiation of alliance terms.