The dynamic capabilities literature suggests that firms need to use both internal development and external sourcing to thrive over time, but we have a limited understanding of the conditions that best suit different sourcing choices. This study examines how constraints that arise from firms ’ existing stocks of capabilities and from their internal social contexts shape their choices of capability-sourcing modes and, in turn, their ability to obtain new capabilities. Thus, the research focuses on an underemphasized form of dynamic capability: the ability to select appropriate modes of capability sourcing. We test the arguments with a survey and longitudinal survival study of the international telecommunications industry. We find intriguing variations in the way that firms ’ selection capability influences their ability to renew their capabilities and, ultimately, to survive. Key words: modes of capability acquisition; selection capability; resource gap; institutional gap; internal development; external sourcing History: Published online in Articles in Advance April 7, 2008. Recent arguments in the dynamic capabilities literature suggest that firms need to develop skills in both internal development and external sourcing to be able to renew their capabilities and thrive over time (Helfat

Recent research shows that preexisting network structure constrains the formation of new interorganizational alliances. Firms that are poorly embedded in a network structure are less likely than richly embedded firms to form alliances, because they lack informational and reputational benefits. This study examines the types of ties that poorly embedded firms can form to overcome the constraints that their structural positions impose, in turn helping to explain how firms ’ actions can transform existing network structures. We argue that poorly embedded firms are more likely to participate in ties characterized by social asymmetry than in ties characterized by structural homophily. We analyze the terms of trade that socially asymmetric partners negotiate for alliance governance and discuss how such alliances influence network dynamics. To test our arguments, we use longitudinal data on the alliance activities of 97 global chemical firms from

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We study how relational rents create both barriers and incentives for exploiting network resources in alliances. We argue that attempts to achieve concentration gains by rationalizing network resources conflict with firms ’ incentives to protect existing relational rents, but the benefits of maintaining a balance of market and relational ties provide countervailing incentives for using concentration gains to exploit market ties within a set of network resources. The analysis examines more than 800 supplier ties in a worldwide purchasing alliance involving two global competitors in a major manufacturing industry. The paper contributes to the literature on buyer-supplier ties and the general literature on interorganizational relationships by demonstrating the interplay between benefits of gaining access to network resources in new partnerships with incentives to preserve relational rents in existing relationships.

Abstract: This paper builds on the concept of “intent to learn ” as an explanation for why some firms are better than others at appropriating knowledge in their alliances. We re-conceptualize the idea of learning intent to include both top management-level decisions and firm-wide processes, while also recognizing that knowledge appropriation includes learning and protection aspects. In doing so, we develop the concepts of Alliance Learning Orientation (ALO) and Alliance Protection Orientation (APO). We propose that these two orientations significantly influence learning and leakage in alliances, both directly and through cross-effects. We test our predictions on a sample of 107 e-commerce alliances. We find that a firm’s learning and protection orientations influence its learning and leakage outcomes in alliances, while also highlighting an asymmetric trade-off between learning and leakage: learning efforts interfere with protection, but protection efforts do not damage learning outcomes.