Other authors emphasize that the companys technical

Other authors emphasize that the company’s technical environment can have a
significant impact on the development of a network among companies and its
composition (Madhavan et al. 1998 ), and compacted networks are not beneficial for
companies operating in a turbulent technical environment (Rowley et al. 2000 ).
The company’s position within a network may differ. Basically, its role and
importance depend on assets possessed, know-how, patents and market position,
etc. An interesting case in point would be the passenger transport industry. The-
oretically, each airline in the network has the same rights and obligations. In
practice, however, things are different, and the role and place of the individual
airlines within the network are varied. Large, global airlines, which are mostly the
1 Alliance Network Structure 39

founding entities of the network, are the leaders. In the middle of the group, there
are full members, which cooperate closely with each other and play a major role.
Agreements between them are multilateral and exclusive, as in the case of Star
Alliance. They are supported by the second level members, which usually have
strict and close ties with one of the full members of the group. Any differentiation
between them has a hierarchical structure, i.e., full members have more power than
the second rank of members, but the latter benefit from a depth of network con-
nections and global scope. The carriers that cooperate with the network on a ‘‘from
connection to connection’’ basis are the third group. They can also cooperate with
airlines belonging to other networks because the principle of exclusivity does not
apply to them. They are usually long distance carriers from relatively distant
locations which are seeking optimal connections between their major airports.
Small regional carriers which are engaged to serve one or more specific routes can
also belong to this group. In other words, a dominant position in the network is
held by full members, and airlines that cooperate on the ‘‘from connection to
connection’’ basis are the least important. The latter do not have the full rights of
the other members, but the principle of exclusivity does not apply to them.
Although alliance networks are created to generate group-based advantage, they
must show benefits at the individual company level in order to attract and retain
new members. Therefore, the question arises: if the network generates profits, how
much can an individual member receive? Authors taking a structural approach
argue that the position of the company in the network shapes its power over
partners (Nohria and Garcia Pont 1991 ; Lorenzoni and Baden-Fuller 1995 ). Others
emphasize that scarce resources brought to the network by each company shapes
its ability to extract profits from partners. In business practice, these approaches
are equally important, and a company with unique and value-added assets can
often bargain for a central position in the network. Table 1 presents the factors
affecting the company’s position within the network.