truly effective practices and continual
improvement.
Most of the companies I studied use
both institutionalizing and integrating
mechanisms. How they balanced the
two seemed to be a key to success. The
highly experienced firms, which relied
predominantly on institutionalizing mechanisms, achieved an alliance success rate
of 50%, somewhat below average for
the entire database. These mechanisms
do not seem to improve competence
but, rather, mirror confidence. Firms that,
in contrast, extensively used integrating
mechanisms realized an alliance success
rate of 71% on average.
Managers often talk about how they
tolerate productive mistakes – errors
employees and the company learn from.
In the case of alliances, my research
suggests, mere tolerance is probably
not enough. Managers should create
mechanisms that encourage thoughtful
trial-and-error approaches and deliberate
lesson sharing.
Koen Heimeriks ( kheimeriks@rsm.nl) is an
assistant professor of strategy at the Rotterdam School of Management at Erasmus
University. Further details on this study are
available at www.koenheimeriks.com.
INPUTS
Biomass – The Other Energy Source
Reprint F0904D
by Marie E. Walsh
In all the talk about renewable energy alternatives to oil, natural gas, and coal, the
most often overlooked are biomass resources – for example, prairie grasses, forestry
and mill residues, nongrain parts of food crops, and urban wood wastes that are
typically discarded in landfills.
Most of this material is not currently used commercially, but steady improvements in technology and agricultural and forestry practices are paving the way for
biomass to become an important energy source in the not-too-distant future. It can
be used to produce electricity and transportation fuels, as well as organic chemicals,
biodegradable plastics, and composite materials.
My research indicates that although biomass resources are abundant worldwide,
the amount available for energy will depend primarily on three things, all of which
vary by resource type and location: environmental sustainability needs (excessive
removal of cornstalks, for instance, can harm soil productivity); collection, production, storage, and transportation costs; and prices paid for competing uses.
If the price of biomass rises, more will enter the market. Technology and productivity improvements will reduce its costs, increasing the quantity that can be used
to produce energy. But in the near term, prices of biomass will most likely be highly
volatile as suppliers adopt new production practices, government policies are clarified, and markets for its various uses emerge, falter, and ultimately stabilize.
461.7 M
dry tons
The Biomass Boom
The graph at right shows
the quantities of select
biomass resources that
could be collected in the
U.S. for (as an example)
$50 a dry ton or less, in
2010 and 2020. Some of
these resources are nascent industries that will
develop over time.
Switchgrass
Wheat straw
212.4 M
dry tons
Corn residues
Note: For comparison, one dry ton of
biomass contains the energy equivalent of 2. 5 to 3 barrels of crude oil.
Urban wood waste
Mill residues
Forestry residues
2010 2020
Marie E. Walsh ( m.e.biomass@comcast.net), a former research scientist at Oak Ridge
National Laboratory, is an adjunct associate professor in the University of Tennessee’s
department of agricultural economics and a biomass energy consultant. Reprint F0904E
