Rogues and Deviants: a game-theoretic perspective on opportunism in strategic alliances

ABSTRACT

This research examines how relational factors, such as monitoring, relative alliance identity (RAI), and trust, influence opportunism and, consequently, alliance performance. The authors suggest that the strategic alliances literature would benefit from recognising that opportunism does not always originate from the firm (rogue opportunism), but can also originate from individual employees (deviant opportunism). Hypotheses are tested in a multi-method approach within a business simulation and a cross-sectional sample of alliance executives. The results demonstrate a U-shaped relationship between trust and opportunism; however, monitoring moderates the relationship such that at high levels of trust, opportunism is practically non-existent. Further, results indicate that employees’ identification with the alliance impedes opportunism. Additionally, both types of opportunistic behaviours negatively impact the performance of partner firms and alliances.     

供应链战略联盟关系风险及其控制

供应链战略联盟关系是最重要的供应链关系形式,在为供应链战略联盟成员带来对彼此有利的竞争优势的同时,也面临着失败的风险.供应链战略联盟关系风险的形成是多种因素相互作用的结果,为有效控制供应链战略联盟关系风险,确保风险管理策略得到正确执行,应建立信任机制,减少联盟成员之间的交易成本,增强联盟成员之间的合作意愿,提高生产与服务的柔性,降低联盟成员的机会主义行为倾向;进行动态契约控制,预防目标冲突风险,及时发现和规避信任风险、信息风险、激励风险、文化差异风险;建立有效的激励机制,形成联盟成员之间的制衡和监督关系,激发联盟成员的积极性、主动性和创造性,及时发现并解决问题,促进联盟关系的健康发展,提高整个供应链的竞争能力和绩效;增进文化融合,消除联盟成员在信息和认识上的差异,使联盟成员间的目标趋于一致,推动联盟成员间的有效合作,促进联盟关系健康发展.     

A process leading to strategic alliance outcome: The case of IT companies in China,Japan and Korea

Although theories and research have provided valuable information on strategic alliance, it still seems difficult for practitioners to overview the process and subsequent outcomes of strategic alliance in a single frame. This is because the conditions of alliance are different from one alliance to another, which makes it difficult for practitioners to apply existing research findings to their own cases. One of the ways to overcome such difficulties in practical application would not be focusing on alliance processes with unique or idiosyncratic features of each alliance but instead focusing on elements that exist in most alliances. To find out the process that leads to the outcome in strategic alliance that is easily applicable for practitioners, the current study measured the behavioral direction and relational outcomes of strategic alliance based on benefit and risk perception in information technology (IT) companies in China, Japan and South Korea. Results show that firms set the direction and the intensity of their participation in alliance based on benefit and risk perception. Specifically, while perceived benefits promoted active participation in alliance, perceived risks increased protective participation in alliance. Also, these behavioral directions predicted the relational outcome in strategic alliance such that while active behavioral orientation predicted commitment to the relationship with the partner firms, protective behavioral orientation led to dissolution of the relationship. The present study provides useful insights for strategy associates, and evoke more various and detached academic approaches in the field of strategic alliance discussions.     

The guppy and the whale: Relational pluralism and start-ups' expropriation dilemma in partnership formation

Start-ups have a high need for resources yet face significant risks when forming partnerships with incumbents to access those resources. We propose that a partnership strategy based on relational pluralism, forming multiplex and multifaceted ties with partners, can mitigate these risks. Such ties offer the start-up increased legitimacy and a relational safeguard against resource misappropriation by more powerful partners. However, we propose that there is a limit to the effectiveness of relational pluralism. Its effect is weakened when the start-up becomes entirely dependent on a small set of partners, or when an additional tie yields resources that are redundant. We argue that the start-up only benefits when the gains from relational safeguarding and legitimacy outweigh the costs of dependence and redundancy. We empirically observe the co-evolution of start-ups’ interlocking directorate and strategic alliance networks in the Australian mining industry over a 10-year period. Our results show that start-ups that engage in relational pluralism perform better than both start-ups that form no alliances and start-ups that form stand-alone alliances. Having a very small portfolio of partners or one that skews heavily toward local partners, however, indeed limits the effectiveness of relational pluralism. Intriguingly, we also find that the temporal sequencing of relational pluralism matters. One of our central findings is that the best performing start-ups first form board interlocks with promising partners and add a strategic alliance later. This offers a rare glance at the temporal sequencing in which peripheral start-ups can gain exceptional performance through partnership formation.     

An examination of opportunistic action within research alliances: Evidence from the biotechnology industry

Like a photographer trying to take a perfect picture, an entrepreneur trying to increase the odds of survival must learn very quickly that focus is everything. And what demands an entrepreneur’s immediate focus is the development of new products. Entrepreneurial ventures depend on the rapid creation of new products to gain access to early cash flows, create legitimacy, grab early market share, and increase their odds of survival (Schoonhoven, Eisenhardt, and Lymman 1990). However, the increasing costs and complexity of new product development are making it difficult for entrepreneurial ventures to contain the assets needed for successful R&D within their boundaries, forcing them to reach beyond their borders to access resources. Barley et al. (1992) document the use of more than 900 contractual research agreements within the biotechnology industry alone. Recent research has also found a positive relationship between the use of alliances in the R&D process and the rate of new product development Deeds and Hill 1996, Shan, Walker, and Kogut 1994.This particular study focuses on the use of relational contracts in the R&D process and extends the prior work on relational contracts to create an explanatory model of the deterrents to opportunism within a relational contract. The article begins with a discussion of the traditional modes of deterring opportunism and of modes of deterring opportunism based on the development of a strong cross-boundary relationship. From this discussion, hypotheses are derived that relate certain characteristics of the alliance (frequency of communication, strength of contractual deterrents, hostage investments, age of the relationship, etc.) to the level of opportunism within the relationship. These hypotheses are then tested on a sample of 109 research alliances in the biotechnology industry.We found significant evidence that a strong relationship between the partners serves as a much more effective deterrent to opportunistic action than the creation of hostage investments or contingent claims contracts. In particular, the results for frequency of communication and the background of the firm highlight the importance of the top management team’s understanding and involvement in the management of research alliances. The strong results for background congruence indicates the importance of shared expectations and understandings between the partners.The strong empirical results for the hypothesized U-shaped relationship between age and opportunism provide support for the existence of both a honeymoon period in the relationship and a liability of adolescence among research alliances. The data also suggest that the honeymoon period for an alliance will last about 4.6 years. We also find that the honeymoon period for alliances that are of little importance to the future of the firm is only 4.1 years, and in our sample of alliances that were important to the future of the firm, the honeymoon period extended from 4.6 years to 6.1 years.     

International Strategic Alliances

Abstract

This paper reports the findings of an empirical investigation of strategic alliance agreements between UK firms and their European, Japanese and US partners. The aim of this paper is to shed some light on the international strategic alliance activity of UK firms and ascertain the objectives and motives of international strategic alliances. In addition, the perceived performance of the strategic alliance is considered together with the perceived level of satisfaction of a range of alliance activities. The findings should prove to be a useful guideline for researchers and practitioners engaged in understanding international strategic alliances. The analysis should allow managers to examine the important issues in the formation of international strategic alliances and allow them to understand the assessment of performance and satisfaction of the alliances formed.

Key Results: The findings have shown a definite pattern in UK international strategic alliance activity. The results of the study indicate that the majority of UK firms engage in international partnerships for marketing-related activities and are essentially driven by the financial cost and risk of entering a foreign market; access to overseas market and improving market share. The findings have also indicated that the majority of UK managers are satisfied with the overall performance of the international strategic alliance.     

Using influence strategies to reduce marketing channel opportunism: The moderating effect of relational norms

In an empirical study of the North American lodging industry, we investigate the efficacy of influence strategies for managing opportunism in marketing channels. We posit that the effects of influence strategies upon opportunism are moderated by the extent to which relational norms characterize the channel exchange. The results support this moderating effect. In particular, we find that relational norms have an asymmetrical effect across coercive and noncoercive influence strategies. With high relational norms in the relationship, a channel member’s use of noncoercive influence strongly limits partner opportunism whereas the use of coercive influence exacerbates partner opportunism. In contrast, noncoercive influence intensifies and coercive influence mitigates partner opportunism under conditions of low relational norms. These findings offer first insights for curbing opportunism in marketing channel relationships with the simultaneous use of different socialization mechanisms. The authors acknowledge support for this study from the summer research program of the Cornell University School of Hotel Administration and the two hotel companies we studied and thank Reed Fisher for help with the data collection.     

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.     

Outcome quality of small- to medium- sized enterprise–based alliances: The role of perceived partner behaviors

Proponents of transaction cost theory have assumed that alliance formation is motivated by environmental uncertainty, with the structure and outcomes of alliance relationships being determined by the costs versus benefits of opportunism on the part of alliance participants (Williamson 1985; Zaheer and Venkatraman 1995). Williamson argued that cooperative relationships driven by perceived efficiency are inherently prone to opportunism or “self-interest seeking with guile” (1975, p. 6). In alliance relationships, opportunism generally takes the form of negative departures from the behavioral norms established for the alliance and is usually motivated by the firm leader’s desire to improve the firm’s position, regardless of the cost to the alliance (Parkhe 1993a). The traditional focus of transaction cost theory has been on the norms established by the formal alliance relationship. These contractual mandates encompass both goal-based and relationship-based expectations. Failure to meet these types of expectations significantly, but not completely, explains the quality of outcomes for alliance relationships.A growing body of research on social control theory suggests that the social embeddedness of the alliance relationship may also establish behavioral norms against which opportunistic departures may be judged (Ouchi and Parkhe). Such norms are extracontractual or taken-for-granted expectations established by both the prior experience of the firms’ leaders and the placement of the firms’ alliance relationships within the network of interpersonal relationships maintained by the firms’ leaders. This study explores the relative impact of negative departures from both contractual and extracontractual behavioral norms on the quality of alliance outcomes, while controlling for a wide range of environmental and firm-specific factors suggested to have an impact on alliance outcome quality.Norwegian manufacturing firms that met the study’s size criteria and belonged to any one of 10 industry types were surveyed. From a list of over 7,000 small- to medium-sized enterprises (SMEs), we randomly selected and mailed surveys to the key decision leaders of over 2,500 firms, ultimately identifying, of the 433 (17.6%) owners and general managers responding, 252 (58%) that maintained alliance relationships.The results of this study challenge several assumptions regarding the determinants of alliance outcomes. A number of resource- and environment-based factors, including the firm’s industry, size, and financial strength, are not found to significantly influence alliance outcomes. The financial return provided by the SME’s alliance relationships, as an indicator of goal-based determinants, was found to be the most important factor related to outcome quality, but the results also suggested that contract noncompliance and the perceived behaviors of the SME’s alliance partners are significant as well. Additionally, the notion that SME-based alliance relationships are generally marked by assumptions of trust rather than opportunism was supported. When partner behaviors are seen or perceived to be inconsistent with either contractually mandated or socially obligated expectations, the outcomes of those relationships are negatively effected, even when the financial goals have been met. An additional finding of this study was that firm leaders make judgments regarding the quality of alliance outcomes in light of their cumulative experience with alliance relationships.     

Success through commitment and trust: the soft side of strategic alliance management

This article argues that the success of international strategic alliances requires attention not only to the hard side of alliance management (e.g., financial issues and other operational issues) but, also, to the soft side. The soft side refers to the development and management of relationship capital in the alliance. Relationship capital consists of the socio-psychological aspects of the alliance that are positive and beneficial to the alliance. Two important areas of relationship capital are mutual trust and commitment. Based on our findings from two major studies of Japanese strategic alliances, we develop a dynamic model of trust and commitment based on mutual adjustments of alliance partners. We also show how the dynamics of trust and commitment affect the performance of international strategic alliances with the Japanese. The article concludes with a discussion of the managerial implications of our findings and the dynamic model.     

Bilateral Opportunism in Buyer–supplier Partnerships

ABSTRACT

Purpose

Literature analyzes interorganizational relationships mostly from a relational perspective by emphasizing partnerships’ positive aspects. Yet business reality is often less romantic and more opportunistic. Especially within the automotive industry opportunistic behaviors often cause extreme reactions in both partners, resulting in poisoned relationships. This study examines the effects of bilateral opportunism between buyers and suppliers on both partners’ relationship induced financial performance, using an automotive industrial setting of new product development (NPD) partnerships. Furthermore, we evaluate the “opportunistic fit” between both partners to assess whether partnerships are characterized by opportunistic parity or unilateral domination.     

One more only if it is one of us. The number of partners and the stock market reaction to domestic and international alliance formation in EU telecom firms

In this paper, we analyze the interaction between two dimensions of strategic alliances whose real impact on the potential value of an alliance has not yet been highlighted: the number of partners and the direct competition among them. Building on the resource-based view, as well as on the relational view of alliances, we argue that increases in the number of partners are positively valued by the stock market when the alliance is formed by competing firms that belong to different countries. Multiparty alliances are thus positively valued when they allow a quick internationalization by affording access to resources owned by competing firms from different countries. An empirical test of stock market reaction to alliances announced by European telecom firms between 1986 and 2001 has confirmed our hypotheses.     

Understanding the impact of relational capital and organizational learning on alliance outcomes

This paper examines how relational capital influences the acquisition of knowledge among alliance partners. We propose that firms with higher levels of inter- and intrafirm learning are better able to achieve superior alliance outcomes. A conceptual framework is developed by integrating the relational view, organizational learning theory, and the resource-based view. We provide empirical evidence using large-sample data to test the model and find that trust and interaction creates a basis for knowledge acquisition across alliance partners. The results also indicate that when the firms are active in knowledge acquisition from alliance partners and dissemination of such knowledge within the organization, they are capable of enhancing satisfaction with the alliance relationship.     

Entrepreneurial orientation and strategic alliance success: The contingency role of relational factors

This study extends entrepreneurship research into the domain of strategic alliances by hypothesizing a positive relationship between entrepreneurial orientation (EO) and firm-level alliance success. Drawing on a relational view, we further examine the focal relationship within a contingency framework, building on the distinction between cooperation (joint action and bonding) and conflict. Findings from a study of 197 partner firms suggest that a high level of joint action strengthens the positive relationship between EO and alliance success. Bonding moderates the relationship in an inverted U-shape manner such that the effect of EO on alliance success will be greatest when bonding exists at the moderate level. However, conflict has no significant moderating effect on the EO–alliance success relationship. Overall, this study provides novel insights into whether and when partner firms can translate an EO into final alliance outcomes.     

The impact of buyer dependence on buyer opportunism in buyer–supplier relationships: The moderating role of relational norms

The impact of buyer dependence on opportunism against the supplier is examined in this research. Extant literature provides support for both a positive and an inverse relationship between these constructs. In this research, these competing predictions are subsumed under a more general model where the effect of dependence on opportunism is moderated by the level of relational norms present in the buyer–supplier relationship. Results of an experiment with purchasing managers and one replication provide support for the hypotheses that (a) dependence and opportunism will be positively related under low relational norms, and (b) dependence and opportunism will be inversely related under high relational norms. © 1997 John Wiley & Sons, Inc.     

Understanding the antecedents of collateral learning in new product alliances

Recognizing that strategic alliances represent an important means for developing knowledge in critical arenas such as new product development, the authors advance the notion of collateral learning that assesses knowledge acquisition internal to a firm in the alliance. To examine its antecedents, the authors build on the behavioral theory of the firm and propose strategic importance and performance vulnerability as the motivational components and organizational similarity and alliance experience as the awareness components advocated in the theory. Results from 133 alliance firms suggest that both the motivational and awareness components are important in influencing collateral learning in new product alliances. Specifically, to develop collateral learning, firms should have extensive alliance experience and an acknowledged stake in their alliance partners. The results also support the theorized U-shaped relationship between organizational similarity of the alliance partners and collateral learning. Thus, collateral learning is facilitated when organizations are either similar or dissimilar, while medium levels of organizational similarity facilitate collateral learning to a relatively lower extent. Although performance vulnerability is found to be associated negatively with collateral learning, extensive alliance experience can attenuate this negative effect.     

企业战略联盟中各种风险的分析

随着全球经济一体化的发展,战略联盟系互联网技术不断发展与运用的产物,在企业战略中的作用越来越重要,风险是战略联盟的一个固定属性,联盟失败的比率一直居高不下,给参加联盟的各方都带来了相当大的经济和战略方面的损失。因此,在联盟管理过程中,要正视与规避风险,以真诚的合作促使战略联盟的健康发展。     

Long-Term Relationships,Partnerships and Strategic Alliances:

The aim of this paper is to identify the conditions under which three different relationship marketing mechanisms-- long-term relationships, partnerships and strategic alliances--are most efficient. The contingency theory that is developed is based on, and extends, the Transaction Cost Economics (TCE) framework. The TCE framework is modified in one respect, opportunism is assumed to vary across exchange relationships. In those relationships that are characterized by relational norms (absence of opportunism), the TCE governance mechanisms--markets, hierarchies and hybrids--are argued to be inefficient relative to the mechanisms of relationship marketing.     

International joint ventures in Russia: Cultures' influences on alliance success

This paper investigates the influence of organizational culture on the strategic success of International Joint Ventures (IJVs) in Russia and the importance of cultural ‘fit’ of alliance partners within this transition economy. Difficult-to-access and rare data is gathered from a sample of IJVs manager in Russia in a strategy-as-practice approach. Questionnaires and in-depth interviews reveal different clusters of values and practices amongst managers and, contrary to previous research, the study suggests that within a transition economy values are not universally applied but influenced by tradition. Adopted organizational culture is also found to be dependent on the dominant IJV stake holding with culture influencing perceived IJV strategic performance. An element of congruency is identified between tradition and openness to change values.     

物流企业战略联盟风险及其防范研究

战略联盟作为组织关系中的一种制度创新,它已成为物流企业战略性调整和价值创造的重要手段。但是,物流企业战略联盟会面临不同的风险.本文给出了物流企业战略联盟的四种风险,并给出了规避风险的策略。