Decision making on governance of strategic technology alliances

Abstract

Purpose

The purpose of this paper is to study the mechanism through which decisions on the preferred governance mode of strategic technology alliances are made at the firm level.

Design/methodology/approach

The author constructed a value‐mediated governance model that is empirically tested through a survey of 57 strategic alliances in the Greek wireless services industry and estimated through a Structural Equation Modeling technique, namely Partial Least Squares.

Findings

Quasi‐hierarchy governance modes are preferred by firms assessing their current value as high, and lacking fear of partners' opportunistic behavior. Quasi‐market alliances are preferred by firms having high expectations for the future value of the alliance, and facing high endogenous uncertainty resulting from the existence of a competitive relationship with the partner.

Research limitations/implications

While the resource and cost perspectives are founded on diverse assumptions on firms' ability to write complete contracts, their implications for the firms' decision‐making behaviour on the alliance governance issue seem to be complementary to those of the value perspective.

Practical implications

Transitional governance forms, quasi‐market alliances that evolve to quasi‐hierarchy alliances, seem to be preferred in emerging technology‐based environments.

Originality/value

The Expected Alliance Value concept is introduced to explain how exogenous uncertainty characterizing the environment of emerging technology‐based industries can influence the already investigated effects of the partner uncertainty and the firm's current value on the alliance governance preferences.

Citation

Pateli, A.G. (2009), "Decision making on governance of strategic technology alliances", Management Decision, Vol. 47 No. 2, pp. 246-270. https://doi.org/10.1108/00251740910938902