Coordinating mechanisms in interorganisational alliances : context, classification and performance outcomes.

The evolution in the business environment of the last thirty years has brought with it a transformation in business practice and particularly in the way in which organisations relate with one another. Driven by a revolution in information technology and a shift in emphasis from manufacturing to service activities, the UK business environment is increasingly characterised by collaborative and dynamic interorganisational alliances. These collaborative interorganisational alliances supersede former structural divisions between adversarial hierarchical conglomerates. The greater reliance on collaborative alliances brings with it new problems in the effective governance of these alliances and so an agenda for research. The present study reviews extant empirical work in the field and identifies an anomaly in the underlying assumptions made by many empirical studies. While the context of the organisational alliance has shifted from adversarial to collaborative, empirical studies frequently retain a transaction cost perspective to explain performance in these alliances. While the transaction costs perspective makes a pertinent contribution it only provides a partial explanation and its' over emphasis in empirical work may limit the validity of findings. Building on the New Dominant Logic perspective of Vargo and Lusch (2004) the present research seeks to examine the performance of interorganisational alliances by aligning the context of the relationship more closely with the theoretical lens. Interorganisational alliances between UK architects and building contractors are used as the context providing a non-hierarchical, non-equity setting and a conceptualisation of the coordination mechanisms at work is proposed. This investigation employs a structural equation approach and finds evidence for a novel alliance coordination mechanism, procedural dependence, as a type of formal coordination operating at a different level to the conventional mechanism of contractual coordination. Furthermore contractual coordination is found to be redundant under these non- hierarchical, non-equity conditions in respect of alliance performance. Theoretical and practitioner implications are explored and future research directions described