Neither Market nor Hierarchy: Networks and Alliances

Research in strategic management has interpreted how companies compete in very diverse ways. Researchers have elaborated different theories or approaches , whose reasoning ranges from explanations oriented towards the interior of the firm to explanations taking the external environment as the point of reference (Hoskisson, Hitt, Wan, & Yiu, 1999). However, the majority of these approaches regard the firm as an independent and autonomous entity that competes with other firms for returns in an impersonal market. But affirming this, categorically, is inappropriate in a world in which firms belong to networks of social, professional, and exchange relationships with other companies These networks consist of lasting ties that have strategic significance for the firms belonging to them. They include strategic alliances, joint ventures, long-term collaboration relationships between suppliers and their customers, and a great number of similar ties (Gulati, Nohria, & Zaheer, 2000).