Alina Lavinia Persa, Monika Poorova, Ksenia Anna Boroszko, Andrej Matta ©
This paper examines the effects of partner and relationship
characteristics on alliance outcomes.
The research involved analysis of 98 alliances (covering eight
countries and several different types of alliance) through a twostage survey design.
Findings support a positive relationship between partner firms’
benefits from alliance participation and partner reputation,
shared decision making, and strategic similarities between
partners.
BACKGROUND
ALLIANCE OUTCOMES
Previous alliance research has progressed along two main paths:
1. Partner characteristics → explanation for alliance behaviour
and outcomes.
2. Relationship characteristics → the link between the firms.
This study incorporates both economic traditions emphasizing
the value of a resource per se and behavioral traditions
emphasizing the relationship in which a firm is embedded to
develop a more complete understanding of the factors alliance
outcomes.
HYPOTHESES
1. PARTNER CHARACTERISTICS
• REPUTATION
quality;
reflect the partner’s management, product or financial
gives a firm better access to scarce resources;
A positive reputation presents itself as an indicator of what partnering firm can
expect from a firm. In addition, it acts as a factor that breaks down the distrust
sometimes formed from firm relationships .
2. CHARACTERISTICS OF RELATIONSHIPS
• PRIOR AFFILIATION
relationship build trust and better
knowledge of partner’s capability.
 A prior affiliation with a firm should positively affect the outcome of a joint
venture or an alliance.
 With familiarity comes synergy and economies of scale, which may not be
created in a new relationship.
 A prior relationship speeds up the alliance process because there is little or no
honeymoon period in which the partners get accostumed to each other.
 Prior affiliation influences a firm’s prosperity to align itself with a particular
partner.
 It has not yet been specifically linked to satisfaction with the outcome of an
alliance.
• SHARED DECISION MAKING
suggest close interaction
signifying both commitment to outcomes and reduced information
asymmetry
 The degree to which partners trust each other and are committed to a
relationship is a result of their investment and involvement in that
relationship.
 The close interaction and the investment partners make through shared
decision making signify two things:
1 a commitment to and interest in outcomes, which decrease the
perceived likelihood of opportunistic behaviour;
2 the likelihood that a parner’s opportunistic behaviour will be recognized.
Information assimetry is thereby reduced when both partners have high
participation in and knowledge of strategic decisions and actions.
 A high degree of mutual involvement in the strategic decision making of
the alliances will positevely affect outcomes as such involvement buids
trust and enhances the appropriability of knowledge.
• SIMILARITIES BETWEEN PARTNERS
makes it easier to identify a
partner’s potential contribution, and also to appropriate knowledge
from one another.
 On the basis of this characteristic, the notion of ‘fit’ is important: fit may
reflect perceived degree of agreement or commonality between partners.
 The more partner-firms complement one another, the greater the
probability that an alliance will be successful (resource complementarity).
 Two factors comprise strategic fit: congruence of partners’ objectives, and
complementary resources. Cultural fit is also comprised of two
components: cultural compatibility (further bifurcated into national and
corporate cultures), and the quality of managerial communications
between partners (a more indirect measure of cultural compatibility).
 Organizational fit is divided into two defining elements: equity
(ownership) structure of an alliance, and the extent of harmony in the top
management team’s decision making processes.
 In order to enjoy espected synergies, organizations must have similar
cultures and approaches to strategic decisions.
Using of methods is very important to measure
pretransaction variables .
Target reputation, prior relationship, performance,
similarities between targets and initial satisfaction in the
first year of each alliance.
Measures
The most important is to determinate dependent
variable which is usually alliance outcome.
Measurement of alliances can be problematic because
of the time-frame for payoffs may be different for
different types of relationships.
Measurement of pretransation variables
• Performance - is deemed to be
the fulfillment of an obligation, in
a manner that releases the
performer from all liabilities
under the contract
• Similarity - if they both have the
same behaviour, or one has the
same goals as the mirror image of
the other
• Initial satisfaction - compering
partner expectations of new
relationship with real satisfation
in first year
• Prior-relationship – what was the
previous relationship between
partners
Measurement of performance
Using of performance scale,
respondents who represent
partners measure overal
satisfaction with alliance by
questionnaire.
1.
2.
3.
Overall, we are very satisfied
with the performance of this
alliance.
The alliance bas realized the
goals we set out to achieve.
The alliance has contributed
to our core competencies and
competitive advantage.
Similarity scale
Respondents answer to indicate
similarities between their firm
and its partner.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Marketing
Manufacturing
Raw materials
Accounting systems
Information systems
Structure
Technology
Customers
Culture
Human resources
These types of similarities parallel the distinction between strategic and
organizational fit.
Measurement of prior-relationship
Prior relationship between partners was measured by seven items
indicating the extent to which the two firms had a prior affiliation as
customer and supplier, competitors, or partners of another type.
1.
2.
3.
4.
5.
6.
7.
Customer
Supplier
Competitor
Alliance partner
Licensee/licensor
Distributor
Other
Measurement of intial satisfaction
This single item asked partners to assess their level of satisfaction in the first year of an
alliance.
The three hypothesis dimensions include:
1. Product quality:
Return rate, quality, technology, repeat husiness, reliahility, value, and customer
relationships.
2. Management:
Experience, integrity, ability to attract, retain, and train employees, decisionmaking capabilities, good neighbor in community, environmental responsibility,
and innovativeness.
3. Financial performance:
Effective use of assets, value as a long-term investment, and financial soundness.
Scales are based on items that asked respondents to indicate
cooperation between their firm and its partner.
All of this scales were created to examine, that this choice of
partner, was the right decision to cooperate with.
The question is whether
respondents in the
final sample are representative
of the population, and whether
respondents to the first survey
reflecte a bias toward alliances
with either good or poor
performance.
Results
Results
• Model 1 captures the effects of the reputation dimensions on alliance
performance .This model is significant at the p < .05 level
[F = 2.73, R^ = .16 ->table). Coefficients for management
reputation and the dummy variable for cross-border alliance are significant.
Because the reputation dimensions of product quality and management
are highly correlated.
• Model 2, isolating the effects of the relationship variables including prior
affiliation, degree of shared decision making, and similarities in strategic
content and organizational processes, is also significant at p < .05 (F = 2.41,
R^ = .18 ->table). The coefficient for shared decision making is.
• Models 1 and 2 demonstrate that partner and relationship characteristics each have
separate, significant effects on alliance outcomes.
• Model 3 is the full model with all independent variables. This model
offers a stronger, multivariate test of the hypotheses and allows examination
of how partner and relationship characteristics simultaneously affect alliance
performance.
• Model 3 is significant (F = 3.08, p < .01 ->table).
Individual coefficients for the management-quality reputation and for degree of shared
decision making are significant.
• These findings offer additional support for Hypotheses 1, 3, and 4, respectively
predicting positive relationships between alliance outcomes and reputation, shared
decision making, and similarities between partners.
 Relationship characteristics and trust in particular are the most important aspects for
explaining alliance behavior and success.
 A firms initial satisfaction with an alliance can be predicted from the relationship
characteristics, but some researches suggest that both prespectives alliance behaviour
and outcome offer a better explanation of the benefits that partners can get from an
alliance.
 The results show, that partner and relationship characteristics are very important in an
alliances.
 The positive relationship between reputation and alliance outcomes gave benefits to
partner firms.
 Theoretically, reputation represents a commodity, that can be traded in a market.
 The fact that reputation is positively related to alliance success suggests that the value
of reputation is not completely bargained away in the transaction. On the other hand,
reputation was not related to initial satisfaction and this suggest, that the benefits may
change over time.
 A surprising finding is that prior affiliation can give initial satisfaction but not to longerterm benefits to partners. This can be explained by the fact that, even if affiliation has
been demonstrated to affect alliance behaviour, it does not have a consistent impact on
the future performance.
 In this study, prior affiliation was operationally defined as any type of preexisting
relationship or market contact.
 It was find that firms can be in an alliance only when that affiliation is positive.
 We examined the relationship between the performance scale and any type of prior
affiliation except competitor contact. This relationship was not significant ( r = .29, p <
.05 ). Only an alliance with a supplier was significantly related to this alliance outcome ( r
= .29, p < .05 ).
 From variables we can find that, companies may be more likely to ally with past partners
and more satisfacied initialy, so past partnership is not predictive over successful
relationship in the long run.
 The findings do affirm positive relationships between the degree of shared decision
making and strategic similarities between partners and alliance performance.
 These variables were done to reflect trust and commitment, but trust has not been well
defined in the research.
 We can underestand the role of trust in an alliance success using direct and indirect
measures.
 Another interesting finding is that similarities between partners with organizational
characteristics, including, culture and human resources, were negatively related to
alliance outcomes, and that organizational process similarities were negatively related
to initial satisfaction.
 The results also contradict the popular idea that "culture clash” negatively influences
alliance potential. The negative relationship suggests that although similarities in
strategic factors such as manufacturing activities and markets are important to alliance
success, it is not as important for a company to pick a partner that thinks in the same
way.
 It is also possible, that these relationships are not linear, there is a certain degree for
understanding a partner.
 Too much similarity, though, could limit the benefits because nothing new is being
brought to the relationship.
 In conclusion, this research on alliances by
integrating two approaches to understanding
alliance behavior and testing their separate
and combined effects on alliance outcomes.
 We examined an alliance behavior based on
resource dependence, game theoretic and
organizational learning perspectives to
hypothesize the effects of partner and
relationship characteristics on alliance
outcomes.
 The results suggest that although initial satisfaction may be explained by relationship
characteristics, including a prior relationship with a partner and similarities between
partners, but a combination of various cultures and habits and other ways of thinking
offers the stronger explanation of more sustain, stronger and more successful
alliances.
 Partner reputation, degree of shared decision making, and strategic similarities
between partners were all found to have a significant, positive relationship to
benefits to partner firms from alliance participation.