Increasingly, the creation of new organizational knowledge is becoming a managerial priority. New knowledge provides the basis for organizational renewal and sustainable competitive advantage.2 A failure to create knowledge and manage it as a critical organizational asset may account for the declining performance of many well-established firms. However, our understanding of the organizational processes surrounding knowledge creation and management is rather limit~d. By examining knowledge creation through alliance strategies, this article provides insights into how firms manage knowledge. Understanding the process by which new knowledge is created poses a fundamental challenge to the development of a learning organization.3