From the Bottom Up? Technical Committee Activity and Alliance Formation

Abstract

We examine how interaction between mid-level managers in technical committees facilitates subsequent alliance formation in a longitudinal study of 87 cellular service providers and equipment manufacturers. Joint participation by firms in technical committees helps them identify potential alliance partners and particular opportunities for technical collaboration. This effect is magnified by sustained participation by individuals on behalf of their firms, demonstrating that interfirm relationships are enhanced by the interpersonal bonds that are forged in technical committees. In contrast, we find that the effect of joint technical committee participation on alliance formation decreases as firms have more prior alliances, suggesting that technical committees provide a more critical avenue for knowledge exchange when firms do not have the luxury of exchanging information through contractual linkages. Taken together, these findings suggest one venue where managerial action can transform existing social structure, because technical committee activity facilitates the entry of less-established firms into alliance networks.