How do firms build alliance capability? What explains heterogeneity across firms with respect to their overall alliance success? Building upon insights from organizational learning, evolutionary economics and the knowledge based view of the firm, this study provides a theoretical framework to highlight the antecedent organizational processes that underlie development of alliance capability and explain variation in alliance success across firms. We find that explicit processes to accumulate and leverage alliance know-how associated with experience play an important role in driving capability and success. More specifically, we find that processes of articulation, codification, sharing and internalization of alliance know-how are central to achieving differential success. We also observe that a structural arrangement to coordinate firm level alliance activity can support the implementation and impact of these processes. While explicit processes to accumulate and leverage organizational know-how are valuable, our research also highlights certain conditions under which their relative efficacy is diminished. A multi-method approach comprising large sample survey research and in-depth case study is used to test the theoretical arguments. An important contribution of this study also lies in developing clear theoretical constructs representing distinct dimensions of organizational knowledge management and providing empirical validation for those constructs. Thus, although the present study is restricted to examining the development of alliance capability, it has the potential to inform and extend the role of knowledge accumulation in the development of organizational capabilities in other settings as well.
