"When Networks Matter", Douglas Reid, Queens University, at the Strategic Leadership Forum Toronto, October 3, 2002

Strategic Leadership Forum Toronto luncheon at the Ontario Club, Thursday, October 3, 2002, 12:55 p.m.

These participant's notes were created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing (daviding@systemicbusiness.org) at the IBM Advanced Business Institute ( http://www.ibm.com/abi ).

Introduction by Michael Koscec, (Entech Corporation), SLF-Toronto chair of the thought leadership series for the year

Douglas Reid is an assistant professor of business strategy, Queen's School of Business

[Offline, I had a conversation with Douglas that he was working with Peter Keen]

[Douglas Reid]

Unveiling the research for the first time, today.

Profound managerial impact.



Diagram from Yoshino ∓ Rangan, Harvard 1995:


Different types of arrangements:

Cooperative strategy: an alliance lifecycle

Prototypically: start to analyze how company A and company B cooperate.

Networks do matter, we know because they let ...

The network effect on alliances has been under-researched.

Pooling resources between partners has been a major motivator for doing alliances.

Expected contribution

Real-world example: airline industry

Theoretical development

What will firms do to manage dependencies? (Pfeffer and Salancik (1978))

The outcomes from successfully manage dependencies:

Have found that people are over-measured and under-valued: measure too many things, and do too little with them

How do alliances help company survive?


Research setting: airline industry (not a paragon of virtue)

20 years of raw flight data (to 1997, at the beginning of large alliances such as Star Alliance)


Network of : C <--> A <--> D <--> B <--> E
Alliance in the dyad: A <--> B

What to measure?

What do strategic alliances remind you of?

Best analogy:

A also has alternatives, e.g. can it could get a destination by C

A and B could also be competitive on some routes

With data, looking at absolute amount and changes, at ...

Findings: airlines don't have a good record for keeping up stable, long-term relationships.

Findings on overall industry:

This industry is quite segmented

When dealing with a customer the same size ...

When your airline is smaller than your partner, different results

If you're the larger partner, things change:

Observations: networks don't help much in moving production resources, more with information.

Limitation of study: Only covers scale alliances, (doing the same thing), not sequential (link) alliances (upstream / downstream).


Generalizability beyond airline industry?

Research method in the 6 month framework?

Rule that the top three always merge with smaller players?

Measure of commitment to managing the relationship?


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