Governing explorative and exploitative Strategic Technology Alliances: comparing ownership structure, trust and contract

Carolus Sala, D.S. (2011) Governing explorative and exploitative Strategic Technology Alliances: comparing ownership structure, trust and contract.

Abstract:In the literature of alliance governance, it has been provoked that research should have a more contextualized view on alliance governance, since there are indications provided that STAs require unique governance challenges per innovation trajectory stage (Faems, 2006; Koza & Lewin, 1998; Pateli, 2009; Poppo & Zenger, 2002; Rothaermel & Deeds, 2004). To gain a more fine grained understanding on these governance challenges, this study investigated the differences in 3 key governance drivers between explorative and exploitative STAs to examine whether STAs can be best considered as heterogeneous inter-organisational arrangements. The differences between explorative and exploitative STA are derived from the objective of the STA (Koza & Lewin, 1998; Lavie & Rosenkopf, 2006, March, 1991). The investigated specific governance challenges are derived from the governance phase of the alliance life cycle and include the ownership structure, trust and contract complexity (Kale & Singh, 2009). Ownership structure determines the formal arrangement (i.e. non-equity or equity) between alliance partners. Trust is “the confidence held by one party in its expectations of the behaviour and goodwill of another party regarding business actions” (Carson, Madhok, Varman, & John, 2003, p. 46). Contract complexity refers to the extent of using safeguards in contracts to describe the agreements between partners and is perceived as legally binding (Lyons & Mehta,1997). To test the formulated hypotheses empirically, a sample of 40 STAs in Dutch Small Medium sized Enterprises within different sectors is used. To analyse the differences between explorative and exploitative STAs, Chi-square and independent T-tests are applied. Furthermore, the influence of type of partner, level of technology, number of partners and prior ties on the governance challenges is analysed with binary logistic regression and linear regression analyses. This study has found that contract complexity is significantly higher in explorative STAs, while the ownership structure and level of trust do not significantly differ between explorative and exploitative STAs. The control variables confirmed that the type of STA affects contract complexity. This finding indicates that, based on the transaction cost economics theory, a more structural perspective is selected in exploitative STAs. Furthermore, the number of partners significantly influence the ownerships structure in a way that dyadic STAs rely more on equity ownership structures than constellations do. Finally, the ownership structure and the level of trust do not differ across the explorative and exploitative STAs.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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