Introduction
Since the early 1980s, the proliferation and increasing importance of interfirm alliances
have received considerable attention in the strategic management literature [
7
]. As the
study of alliance networks has gained popularity, theoretical analysis of the competitive
advantage of organizations participating in alliances have been developed, focusing on
resource-centric theories [
2
]. Nevertheless, research has shown that it is the services
that resources provide, not resources themselves, that generate value for the firm [
8
].
Consequently, ownership or control of resources is not a necessary condition for
competitive advantage. In this sense, capability-based theories, which focus on “adapting,
integrating, and reconfiguring internal and external organizational skills, resources, and
functional competences toward a changing environment” [
9
], have taken shape.
Despite the relevance of capabilities to the success of enterprises, little attention has
been given to the theoretical analysis of this concept in the context of interfirm
alliances. In this paper, we tackle this issue by analyzing the ontological nature of
capability agreements, taking into account the broader implications of incorporating external
capabilities embedded in the firm's alliance network. To accomplish that, we conduct,
in Sections 2 and 3, an ontological analysis of capability agreements, under the
principles of the Unified Foundational Ontology [
4
]. As we shall see, our analysis shows an
important result: capability agreements expose external dependencies and reveal new
vulnerabilities, which may enable the occurrence of risk events. Therefore, we can state
that capability agreements imply a relation of duality between capabilities and
vulnerabilities: at the same time that it creates a chain of dependencies on capabilities
throughout the alliances network, it forms a chain of vulnerabilities, due to the possibility that
one or more participant nodes fail to fulfill their commitments. We conclude and
present final considerations in Section 4.
Capability and Capability Agreement
The term capability is used in a variety of contexts with different meanings and
interpretations. However, most views on capability agree that possessing a capability
means to have competence and ability (and also the right resources in adequate amount)
to do something. Sandkuhl and Stirna [
11
] define capability as the ability and capacity
that enables an enterprise to achieve a business goal in a certain con-text. In The Open
Group Architecture Framework (TOGAF) [
12
] capability is defined as the ability that
an organization, person, or system possesses. In this paper we adopt the interpretation
of capability proposed by Azevedo [
1
], which defines ca-pability as the power to bring
about a desired outcome.
We use the UFO semantics of modes (more specifically, of dispositions) defined in
Guizzardi [
6
] to represent capabilities. In UFO, a capability is a specific type of
disposition that endows their bearers with the potential of exhibiting some behavior or
bringing about a certain effect under certain conditions.
When an alliance is formed, a capability agreement is established, and the
participants endow a subset of its capabilities to the alliance with the expectation of generating
common benefits. Fig. 1 shows an OntoUML [
4
] model representing a capability
agreement for a single dyadic alliance in which a FOCAL AGENT is endowed with capabilities
offered by a PARTNER AGENT. AGENT is a rolemixin [
4
], since it represents roles played
by entities of different kinds, e.g., persons and organizations. In our model, both the
FOCAL AGENT and the PARTNER AGENT represent organizations.
The CAPABILITY AGREEMENT mediates the relation between the FOCAL AGENT and
his partner by being a social relator [
5
] composed of the PARTNER AGENT’s
commitments and the FOCAL AGENT’s claims with respect to the capabilities offered. Intentions
are mental moments [
5
] that inhere both in the FOCAL AGENT and in the PARTNER
AGENT and are tied to the motivation for establishing the agreement. The propositional
contents of AGENT’s intentions are his goals. By virtue of the capability agreement, the
PARTNER AGENT commits to perform actions to achieve the results determined in the
agreement. Fig. 2 represents the execution of these actions.
As a result of the capability agreement, the capabilities offered by the PARTNER AGENT
are aggregated to the set of capabilities of the FOCAL AGENT, as well as some of the
PARTNER AGENT’s non-offered capabilities, the latter being derived from opportunities
that range beyond the capability agreement immediate scope (for example, an agent
may benefit from the partner’s reputation, which is not part of the agreement).
The UFO concept of disposition is also applicable for the external capabilities. When
an agent delegates to another agent the performance of certain processes that realize a
capability, he can still, in a sense, to be considered as having that capability, because
he acquires that capability grounded in a relation of delegation [
5
]. This is related to the
idea of what an agent can “socially perform”: If A has a commitment from B to execute
S, then A (socially) can do S. An object can have dispositions which arise from its parts,
or from the network of its delegation relations [
5
]. In our example, if the FOCAL AGENT
has a commitment from the PARTNER AGENT with respect to (w.r.t.) the offered
capabilities, then the FOCAL AGENT (socially) has these capabilities.
A further important aspect, related to the motivation behind the establishment of the
capability agreement, is the FOCAL AGENT’s awareness of his dependence on external
agents to satisfy the desire of achieving a certain goal G. With the (social) commitment
of the PARTNER AGENT, this desire becomes an intention to G inhering in the FOCAL
AGENT. Considering that intentions are self-commitments [
3
], the FOCAL AGENT
becomes more vulnerable and may be exposed to unanticipated risks. We may get until a
much higher level of vulnerability if, believing he has the social capability w.r.t. G, the
FOCAL AGENT makes a commitment to someone else (e.g. a THIRD AGENT) to employ
this social capability to achieve G. In this case his vulnerability is bigger because, if the
PARTNER AGENT doesn’t fulfill his commitment on G, not only the FOCAL AGENT’s
self-commitment to G is frustrated but also his social-commitment to G is frustrated.
Moreover, if it is true that a commitment without a corresponding capability entails
liability then, if the THIRD AGENT decides to exercise his claim towards the FOCAL
AGENT w.r.t. G, not only G but other goals of the FOCAL AGENT may be dented (e.g.,
the FOCAL AGENT might be subject to legal or social sanction from the THIRD AGENT).
We analyze the relation between external capabilities and risk, based on the
Common Ontology of Value and Risk (COVER) defined in Sales et al [
10
]. COVER
proposes an ontological analysis of notions such as Risk, Risk Event (Threat Event, Loss
Event) and Vulnerability, among others.
When a capability agreement is not successfully executed, because the PARTNER
AGENT fails to fulfill its commitments, the RESULTING SITUATION (i.e., the one
satisfying the FOCAL AGENT’s corresponding goal) may not be obtained, and consequently,
the FOCAL AGENT may not be able to achieve his goal. In the worst case, the RESULTING
SITUATION is a threatening situation that may trigger a THREAT EVENT, which is the
one with the potential of causing a loss. The LOSS EVENT is a RISK EVENT that impacts
intentions in a negative way, as it hurts the FOCAL AGENT’s intentions of reaching a
specific goal. Fig. 3 represents the relation between external capabilities, vulnerabilities
and risk.
In this paper we presented an ontological analysis of capability agreements in the
context of interconnected organizations. We propose that capability agreements imply a
relation of duality between capabilities and vulnerabilities: at the same time that it
creates a chain of dependencies on capabilities throughout the alliances network, it forms
a chain of vulnerabilities between the participant nodes, that may enable the occurrence
of risk events. As a next direction, we plan to expand the presented analysis to broader
agreements, in which two or more participants endows a subset of its capabilities to the
alliance.