In this paper, we investigate the practice of quality management in strategic alliances. By employing a relational view of inter-organizational competitive advantage, the paper addresses the concept of quality management in strategic alliances and networks. We argue that institutional/network relationships influence the practice of quality within a network. In that regard, firms that have adopted quality management practices are more effective in managing and coordinating their interactions with other firms in the network, which results in their enhanced learning capability within the alliance.
The proposed framework recognizes the role of trust and cooperative learning as critical factors that affect the success of strategic alliances. It has been argued that firms within an alliance need to achieve the paradox of control and learning. We examine the role of trust as a control mechanism in strategic alliances and address the importance of cooperative learning within alliances. Several hypotheses have been proposed and future research has been outlined.
Quality management (QM) has been widely viewed as a management paradigm that enables firms to gain a competitive advantage (Yeung et al., 2006). Kanji (1990, p. 4) describes QM as “the second industrial revolution.” Empirical research shows that QM practices positively affect firm performance (Hendricks and Singhal, 1996; Handfield et al., 1998; Das et al., 2000; Douglas and Judge, 2001; Hendricks and Singhal, 2001a and Hendricks and Singhal, 2001b; Kaynak, 2003).
A fundamental question in QM is to determine whether firms operating in a network are embracing quality, and if they are, to what extent QM is adopted differently by different members of the network (Sitkin et al., 1994). Furthermore, to the extent that firms operating in networks have adopted QM programs, how are the dual goals of control and learning addressed? We attempt to investigate how QM could be practiced within a network of firms, and to what degree the practice of quality may be different.
The traditional view towards QM has been focused on the practice of quality within a single firm. While scholars raise the question regarding the domain of QM (Sousa and Voss, 2002), there is some evidence on the literature that provides insight on the role of QM in a network of firms. Recent studies show that there are synergies between QM and supply chain management performance (Flynn and Flynn, 2005). Robinson and Malhotra (2005) define quality in a supply chain management, and they argue that understanding QM in a supply chain environment requires a transition from a product to a process-oriented perspective towards quality. A recent study by Lo et al. (2007) states that QM is a prerequisite for effective supply chain management.
To extend QM and define its practice within a network of firms, we focused on strategic alliances.2 Scholars and practitioners are interested to know the critical success factors for such alliances (Gulati, 1998; Gulati et al., 2000; Arino et al., 2001; Inkpen and Ross, 2001; Sampson, 2005; Singh and Mitchell, 2005; White and Lui, 2005). Despite the significant attention given to quality, strategic management remains a key area of extension of the quality concept (Pruett and Thomas, 1996). Our aim is to address the practice of quality within a network so that firms can achieve a higher level of performance.
This paper extends the concept of quality beyond the scope of a firm by providing a network perspective of quality. It contributes to the existing body of knowledge in understanding successful strategic alliances.
Our attempt was to address the concept of quality management in strategic alliances and networks of firms. We utilized a learning perspective on quality management that was consistent with the learning perspective of strategic alliances. In line with previous studies in quality management and learning, we addressed both the control and learning aspects of quality management within strategic alliances. Trust emerged as a control mechanism, while cooperative learning and process improvement were key variables facilitating learning dynamics in the alliances.
The propositions based upon the proposed model provide the basis for testable hypotheses. Appropriately testing the hypotheses should add to our understanding of, the relationships between, and the realm of applicability of both quality management and strategic alliances.
