Whether and How trust matters in challenging alliance contexts....

What is it about?

Strategic alliances are considered significant corporate strategy for reducing the investment risk, transferring competence and resources, and entering global markets. Despite their widespread use, alliances are reported to be risky and ineffective. Extant research suggests that legal and contractual controls are inadequate for managing the alliances because of the complex industry and global contexts that affect the alliances. Thus, it is critical to study the role of relational dynamics such as trust in the success of alliances, and examine whether the relationships between partners can withstand the contesting alliance contexts. Employing the relational exchange perspective, this study systematically examines the influence of trust between partners on the alliance performance, and further tests whether the alliance relationships are strengthened or restrained by the national differences, governance mode, and rivalry and power dynamics between the partners. This study, based on data collected from the managers of 179 strategic alliances, revealed that trust between partners is related to alliance performance, and found evidence that this relationship is moderated by alliance contexts such as international scope, alliance governance mode, and rivalry between partners.

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Why is it important?

Strategic alliances are considered significant corporate strategy for reducing the investment risk, transferring competence and resources, and entering global markets. Despite their widespread use, alliances are reported to be risky and ineffective. Extant research suggests that legal and contractual controls are inadequate for managing the alliances because of the complex industry and global contexts that affect the alliances. Thus, it is critical to study the role of relational dynamics such as trust in the success of alliances, and examine whether the relationships between partners can withstand the contesting alliance contexts. Employing the relational exchange perspective, this study systematically examines the influence of trust between partners on the alliance performance, and further tests whether the alliance relationships are strengthened or restrained by the national differences, governance mode, and rivalry and power dynamics between the partners. This study, based on data collected from the managers of 179 strategic alliances, revealed that trust between partners is related to alliance performance, and found evidence that this relationship is moderated by alliance contexts such as international scope, alliance governance mode, and rivalry between partners.

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