The governance of tensions in strategic alliances

University of Technology, Sydney. Faculty of Business.The focus of this thesis is the study of strategic tensions between organisations engaged in a dyadic alliance relationship and the influence that the partnering firms’ corporate strategies may bring to bear on the governance of the alliance venture and the subsequent performance of these partnerships. Prior research on alliance outcomes has largely ignored the relationship between strategic fit, alliance process and evolution. This is despite the clear demonstration, in Doz’s (1996) longitudinal study of alliances, that the initial structural conditions and subsequent evolutionary processes influence alliance outcomes (see also Noorderhaven, 2005). The literature review examines both academics’ and practitioners’ various definitions and terminologies used to describe alliances. Three scholars, Arthur (1996) (whose view of organisations is embedded in institutional theory) and Das and Teng (2001) (whose perspective of alliances is as organisations emerged in internal tension), essentially share a similar perspective. This is that alliances are based on a tentative equilibrium of reciprocal opposing forces that can quite readily shift if one force gains strength. In this thesis, theoretical contributions and models, along with empirical findings that inform an understanding of the dynamics and processes of coevolution that shape the alliance development process, were evaluated, with the evolution of paradigms and paradoxes that influence and shape the logic behind the adoption of an alliance strategy being identified as providing a basis for explanation. The primary research question for this thesis was how internal tensions between partners influence alliance performance and the value appropriated by individual partners. To answer this question, it was necessary to understand the origins and drivers of internal tensions in an alliance. Alliance tensions are influenced by the environment, structural choices and contextual, structuring, organizational and discursive processes that broadly shape the effective implementation of an alliance strategy. To answer criticisms of fragmented contributions to the strategic management agenda (Ansoff, 1987; McKierman and Carter, 2004) a research model was developed to guide and Teng's (2001) classification framework for investigating alliance structures and tension. The research findings suggest that overall tension levels and sub-systemic dialectic tensions (i.e. short-term versus long-term; flexibility versus rigidity; collaboration versus competition; common versus private benefits) evolve over time and reconstitute relationships and shape the evolutionary trajectory of an alliance. The case studies findings suggest a process of accelerating tensions and significant imbalances in their configuration will favour certain outcomes. All propositions formulated in this thesis were supported by the findings of the studies. The main contribution of my research is to extend current theory by examining converging and diverging forces/tensions and their impact on alliance value creation. This was done through the use of a dynamic model based on organisational learning and strategy theory. The governance process of alliance resources, in the context of the value creation process and perceived risk, is a key strategic element that influences internal tensions and alliance evolution. The in-depth seven qualitative case studies approach was an appropriate research methodology because of the complexity of the phenomena investigated. Since the process elements involved are not accessible though traditional quantitative methods (Doz, 1996; Arino and de la Torre, 1998), a longitudinal case studies approach was followed to monitor the interactions between the partners. However the design simultaneously constrained the testing of the findings. It would have been useful to have data from a larger sample of firms within these industries. Future studies that would include larger data sets would provide the opportunity to explore and test the model at different points in the supply chain. In conclusion, the research identified the origin of internal alliance tensions as the product of the variance between partner’s strategic intent for alliance conditions (perceived normative collaborative conditions), actual alliance conditions and perceived risk. This sets the groundwork for future research which will examine the degree to which the individual tensions are determinants of alliance performance, and obtain a deeper understanding of the interrelationships between the tensions identified in the proposed model