Transitional Governance in External Technology Sourcing Trajectories: Complementing the Real Option Perspective

Abstract Collaboration and acquisition have traditionally been observed as two alternative strategies to get access to external technologies. However, real option scholars have recently argued that firms can also engage in transitional technology sourcing trajectories where collaboration and acquisition are used as complementary strategies. While these real option scholars have identified factors that influence when partners are likely to shift from collaboration to acquisition, they remain silent on how such a transition can be effectively managed. Based on a multiple case-study of four transitional technology sourcing trajectories between one entrepreneurial and one established firm, this study therefore explores how the pre-acquisition collaboration stage and the post-acquisition integration are related to each other. Our findings suggest that entrepreneurial companies may use the pre-acquisition collaboration stage as a period to evaluate the goodwill of the established partner. In addition, we point to the presence of pre-acquisition integration efforts and the extent of strategic convergence during the pre-acquisition collaboration stage as factors that substantially influence the success of the post-acquisition integration process in transitional governance trajectories. Key words transitional governance, technology sourcing, real optio