Interfirm cooperation and uncertainty: a study in the ICT Industry

In this empirical study, I take the perspective of the firm in order to explore and understand forming and configuring interfirm cooperation, applying a firm’s alliance portfolio approach. The majority of studies have found interfirm cooperation to be crucial for acquiring resources, increasing firms’ performance, and building competitive advantages, especially in the most globalized industries, knowledge- and technology-intensive and characterized by a high level of uncertainty. Many studies have explored the impact of alliance portfolio configuration on firms’ characteristics. However, little attention has been focused thus far on phenomena of alliance portfolio forming or its impact on portfolio configuration. In order to fill this gap, I applied a mixed method approach, including a multi-site study, and analyzed the phenomena of alliance portfolio forming in 26 ICT firms.The results indicate that, in the same institutional environment, firms conduct various cooperation strategies and create different alliance portfolios. The major reason for this is the different approaches to uncertainty and trust. The results show that initial trust is a crucial factor influencing firms’ ability to take advantage of uncertainty. Moreover, a higher ability to take advantage of uncertainty—namely, trusting instead of applying calculative uncertainty reduction mechanisms in forming interfirm relationships—is a major factor distinguishing the hyper-growth firms from the remaining ordinary analyzed firms. The results contribute to the understanding of approaches to uncertainty and types of trust in forming firms’ alliance portfolios as well as understanding factors—other than institutional ones—behind firms’ cooperation strategies.