How managers can build trust in strategic alliances: a meta-analysis on the central trust-building mechanisms

Trust is an important driver of superior alliance performance. Alliance managers are influential in this regard because trust requires active involvement, commitment and the dedicated support of the key actors involved in the strategic alliance. Despite the importance of trust for explaining alliance performance, little effort has been made to systematically investigate the mechanisms that managers can use to purposefully create trust in strategic alliances. We use Parkhe’s (1998b) theoretical framework to derive nine hypotheses that distinguish between process-based, characteristic-based and institutional-based trust-building mechanisms. Our meta-analysis of 64 empirical studies shows that trust is strongly related to alliance performance. Process-based mechanisms are more important for building trust than characteristic- and institutional-based mechanisms. The effects of prior ties and asset specificity are not as strong as expected and the impact of safeguards on trust is not well understood. Overall, theoretical trust research has outpaced empirical research by far and promising opportunities for future empirical research exist

How and When Socially Entrepreneurial Nonprofit Organizations Benefit From Adopting Social Alliance Management Routines to Manage Social Alliances?

Social alliance is defined as the collaboration between for-profit and nonprofit organizations. Building on the insights derived from the resource-based theory, we develop a conceptual framework to explain how socially entrepreneurial nonprofit organizations (SENPOs) can improve their social alliance performance by adopting strategic alliance management routines. We test our framework using the data collected from 203 UK-based SENPOs in the context of cause-related marketing campaign-derived social alliances. Our results confirm a positive relationship between social alliance management routines and social alliance performance. We also find that relational mechanisms, such as mutual trust, relational embeddedness, and relational commitment, mediate the relationship between social alliance management routines and social alliance performance. Moreover, our findings suggest that different types of social alliance motivation can influence the impact of social alliance management routines on different types of the relational mechanisms. In general, we demonstrate that SENPOs can benefit from adopting social alliance management routines and, in addition, highlight how and when the social alliance management routines–social alliance performance relationship might be shaped. Our study offers important academic and managerial implications, and points out future research directions

Network Governance at the Firm and Network Level: Goals, Routines, and Social Mechanisms

This article contributes to the general understanding of governance in networks and the achievement of private and common goals. Integrating transaction costs and social network theory, a simple integrated framework is provided for understanding why firms collaborate and under which conditions they establish durable networks that succeed in achieving goals. Network theory is extended by explicitly distinguishing between firm and network level governance, and by identifying governance mechanisms that adapt, coordinate, and safeguard customized exchanges. This way issues as how networks evolve, how they are governed, and ultimately, how collective outcomes might be generated can be better comprehended. This is especially relevant to policy planners and those having a perspective that goes beyond the performance of individual organizations.network governance, social network theory, governance mechanisms., Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Industrial Organization, Research Methods/ Statistical Methods,

Alliance or acquisition? A mechanisms‐based, policy‐capturing analysis

Research summary: While alliance researchers view prior partner‐specific alliance experience as influencing firms' subsequent alliance or acquisition decisions, empirical evidence on the alliance versus acquisition decision is surprisingly mixed. We offer a reconciliation by proposing and testing an analytical framework that recognizes prior partner‐specific experiences as heterogeneous along three fundamental dimensions: partner‐specific trust, routines, and value certainty. This allows us to use a policy‐capturing methodology to rigorously operationalize and test our mechanism‐level predictions. We find that all three mechanisms can increase the likelihood of a subsequent alliance or acquisition, and in terms of the comparative choice between alliances versus acquisitions, partner‐specific trust pulls towards alliances, and value certainty pulls towards acquisitions. We conclude with a discussion of the theoretical and empirical implications of our approach and method. Managerial summary: This study focuses on an important corporate decision: When a firm has had an alliance with another firm, how would that experience affect the likelihood of a future alliance or acquisition with that same firm? We first suggest that it will depend on three factors: the level of trust that existed in that prior alliance, the extent to which specific work routines were developed, and the degree to which the firm was able to confidently assess the value of the partner firm's resources. We then find that trust is a particularly strong predictor of future alliances, while confidence regarding value more strongly predicts future acquisitions. In this way, we demonstrate more precisely how past corporate choices can affect (consciously or unconsciously) future ones

Alliance contractual design

Our purpose in this paper is to provide an overview of what we know about alliance contracts. After a short introduction to the contents of alliance contracts, we start by contrasting alliance contractual form and governance form. Next, we focus on two related constructs: contractual complexity and contractual completeness. We suggest that contractual complexity is a more adequate construct to investigate in the absence of information about the transaction contemplated in the contract. After that, we present the measures of contractual complexity used in past studies. Then, we go over the determinants of contractual complexity by considering their influence on contracting costs and benefits given environmental and behavioral uncertainty. Conclusions and suggestions for research are offered at the end.alliance contracts; collaborative relationships; contractual complexity; strategic alliances; cooperation; joint ventures;

Alliance Coordination, Dysfunctions, and the Protection of Idiosyncratic Knowledge in Strategic Learning Alliances

In high technology industries firms use strategic learning alliances to create value that can’t be created alone. While they open their interorganizational membrane to gain new skills and competences, generate new products and services, accelerate development speed, and enter into new markets their idiosyncratic knowledge base may be impaired when knowledge related dysfunctions like the unintended knowledge transfer, asymmetric learning speed or premature closing occur. Within a value approach we examine the interplay of alliance coordination activities that enhance value creation, emerging knowledge related dysfunctions, and formal and organizational protections measures which shall safeguard firms intellectual crown jewels. We tested our hypotheses with a sample of 111 strategic alliances of young technology based Enterprises (YTBEs) with competing partners in high and key technology industries. Our findings suggest that a focal firm’s alliance management is well advised to intensely coordinate the alliance and to be aware of dysfunctional tendencies that erode alliance value. Since organizational protection measures could exaggerate dysfunctional effects they should be deployed very deliberately on a modest level. Formal protections measures, in contrast, seem to aggravate coordination activities’ value creation effect by setting behavioral guidelines. Moreover, an unsuccessful negotiation process of formal protection agreements may allow a deselection of partners that would not obey others intellectual property interests. Finally, we highlight theoretical and managerial implications that arise from these findings. --Strategic Learning Alliance,Protection

The Permeability of Network Boundaries: Strategic Alliances in the Japanese Electronics Industry in the 1990s

This paper looks at the choice of strategic partners for alliance formation in the Japanese electronics industry during the post-bubble economic period 1992-97. Results from a dyad analysis of 128 companies suggest that firms tend to look for partners within their existing vertical keiretsu networks of organizations for alliances that target the creation of resources that build on existing knowledge (production or distribution) but that this common keiretsu effect disappears for alliances that involve new knowledge creation (new product or technology development). The role of corporate networks, environmental uncertainty and their implications for our understanding of strategic alliance formation and the dynamics of social networks are discussed.

Coping with Problems of Understanding in Interorganizational Relationships: Using Formalization as a Means to make Sense

Research into the management of interorganizational relationships has hitherto primarily focused on problems of coordination, control and to a lesser extent, legitimacy. In this article, we assert that partners cooperating in such relationships are also confronted with ‘problems of understanding’. Such problems arise from differences between partners in terms of culture, experience, structure and industry, and from the uncertainty and ambiguity that participants in interorganizational relationships experience in early stages of collaboration. Building on Karl Weick’s theory of sensemaking, we advance that participants in interorganizational relationships use formalization as a means to make sense of their partners, the interorganizational relationships in which they are engaged and the contexts in which these are embedded so as to diminish problems of understanding. We offer a systematic overview of the mechanisms through which formalization facilitates sensemaking, including: (1) focusing participants’ attention; (2) provoking articulation, deliberation and reflection; (3) instigating and maintaining interaction; and (4) reducing judgment errors and individual biases, and diminishing incompleteness and inconsistency of cognitive representations. In this way, the article contributes to a better understanding of the relationships between formalization and sensemaking in collaborative relationships, and it carries Karl Weick’s thinking on the relationship between sensemaking and organizing forward in the context of interorganizational management.Formalization;Sensemaking;Interorganizational Cooperation;Understanding

Explorative R&D collaboration: Searching for effective and efficient governance mechanisms.

Explorative R&D collaboration is an important alternative for the internal development of new technologies. The high failure rate of this type of inter-organizational collaboration, however, indicates that governing explorative R&D collaboration is not a straightforward task. Moreover, we argue that different theoretical perspectives have formulated contradictory advice of how to govern explorative R&D collaboration. Given high risks of opportunistic behavior and high coordination costs within explorative R&D collaboration, Transaction Cost Economics and Organization Theory emphasize the need for formal governance mechanisms. The innovation literature, however, stresses that formal governance mechanisms prohibit the carrying out of explorative activities which are necessary to develop new technologies. We also suggest two alternatives to address these paradoxical requirements. In specific, we argue that effective and efficient governance of explorative R&D collaboration can be achieved by 1) collecting second-hand information about potential partners, allowing for the substitution of formal governance by relational governance, and 2) combining formal and relational governance mechanisms. Based on these theoretical findings, we emphasize the importance of longitudinal, multi-level research to study the characteristics and dynamics of different governance mechanisms within inter-organizational collaboration.Behavior; Characteristics; Coordination; Cost; Costs; Dynamics; Economics; Governance; Information; Innovation; Organization theory; R&D; Requirements; Research; Risk; Studies; Substitution; Technology; Theory; Transaction cost;

Three Levels of Alliance Management

alliance, management