Hostname: page-component-84b7d79bbc-tsvsl Total loading time: 0 Render date: 2024-07-31T06:26:17.073Z Has data issue: false hasContentIssue false
  • English
  • Français

Risk-based perspective on the choice of alliance governance in high-tech industries

Published online by Cambridge University Press:  12 January 2017

Hwan-Jin Kim  and
Byung-Keun Kim
Hwan-Jin Kim*
Affiliation:
Department of Technology Management, Korea University of Technology and Education, Chung Cheong Nam Do, South Korea
Byung-Keun Kim
Affiliation:
Department of Technology Management, Korea University of Technology and Education, Chung Cheong Nam Do, South Korea
*
Corresponding author: maxkim@koreatech.ac.kr
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines the influence of risks on alliance governance modes in high-tech industries. The extant literature has devoted little attention to the preferred governance mode based on the risks surrounding alliances. In this paper, we examine why risks are key factors in the alliance governance decision and investigate the choice of alliance governance mode in high-tech industries. Hypotheses are formulated based on risk perspectives; these hypotheses are empirically tested using data on 3,228 alliance records generated over the past 5 years in high-tech industries. The results suggest that risk perspectives provide an effective rationale for choosing an alliance governance mode in a high-tech industry. In the conclusion, we discuss critical issues in the current debates on predicting alliance governance modes.

Keywords

alliances and joint venturesrisk perspectivesgovernancetransaction cost economics
Type
Research Article
Information
Journal of Management & Organization , Volume 23 , Issue 5 , September 2017 , pp. 671 - 688
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, E., & Gatignon, H. (1986). Modes of foreign entry: A transaction cost analysis and propositions. Journal of International Business Studies, 17(3), 1–26.Google Scholar
Bachmann, R., & Inkpen, A. C. (2011). Understanding institutional-based trust building processes in inter-organizational relationships. Organization Studies, 32(2), 281–301.Google Scholar
Badertscher, B. A., Givoly, D., Katz, S. P., & Lee, H. (2015). Private ownership and the cost of debt: Evidence from the bond market (Columbia Business School Research Paper No. 15-11/Robert H. Smith School Research Paper, No. 2550300). New York, NY/College Park, MD: Columbia University/Robert H. Smith School of Business.Google Scholar
Baird, I. S., & Thomas, H. (1985). Toward a contingency model of strategic risk taking. Academy of Management Review, 10(2), 230–243.Google Scholar
Borgatti, S. P., Everett, M. G., & Johnson, J. C. (2013). Analyzing social networks. London: Sage.Google Scholar
Borgatti, S. P., & Foster, P. C. (2003). The network paradigm in organizational research: A review and typology. Journal of Management, 29(6), 991–1013.Google Scholar
Bosse, D. A., & Alvarez, S. A. (2010). Bargaining power in alliance governance negotiations: Evidence from the biotechnology industry. Technovation, 30(5–6), 367–375.CrossRefGoogle Scholar
Buvik, A., & Andersen, O. (2002). The impact of vertical coordination on ex post transaction costs in domestic and international buyer-seller relationships. Journal of International Marketing, 10(1), 1–24.Google Scholar
Casciaro, T. (2003). Determinants of governance structure in alliances: The role of strategic, task and partner uncertainties. Industrial and Corporate Change, 12(6), 1223–1251.Google Scholar
Chandler, A. D. (1990). Scale and scope: The dynamics of industrial capitalism. Cambridge, MA: Harvard University Press.Google Scholar
Chen, C., Shih, H., & Yang, S. (2009). The role of intellectual capital in knowledge transfer. IEEE Transactions on Engineering Management, 56(3), 402–411.Google Scholar
Chetty, S. K., & Wilson, H. I. M. (2003). Collaborating with competitors to acquire resources. International Business Review, 12(1), 61–81.Google Scholar
Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: The two faces of R&D. The Economic Journal, 99(397), 569–596.Google Scholar
Coletti, A. L., Sedatole, K. L., & Towry, K. L. (2005). The effect of control systems on trust and cooperation in collaborative environments. Accounting Review, 80(2), 477–500.CrossRefGoogle Scholar
Colombo, M. G. (2003). Alliance form: A test of the contractual and competence perspectives. Strategic Management Journal, 24(12), 1209–1229.Google Scholar
Cyr, D., & Re, M. (1999). High tech, high impact: Creating Canada’s competitive advantage through technology alliances. Academy of Management Perspectives, 13(2), 17–28.Google Scholar
Das, T. K., & Rahman, N. (2010). Determinants of partner opportunism in strategic alliances: A conceptual framework. Journal of Business and Psychology, 25(1), 55–74.Google Scholar
Das, T. K., & Teng, B. (1996). Risk types and inter-firm alliance structures. Journal of Management Studies, 33(6), 827–843.Google Scholar
Das, T. K., & Teng, B. (2001). A risk perception model of alliance structuring. Journal of International Management, 7(1), 1–29.Google Scholar
Das, T. K., & Teng, B. S. (1998). Between trust and control: Developing confidence in partner cooperation in alliances. Academy of Management Review, 23(3), 491–512.Google Scholar
Das, T. K., & Teng, B. S. (1999). Managing risks in strategic alliances. Academy of Management Perspectives, 13(4), 50–62.Google Scholar
David, R. J., & Han, S. (2004). A systematic assessment of the empirical support for transaction cost economics. Strategic Management Journal, 25(1), 39–58.Google Scholar
Delerue, H. (2004). Relational risks perception in European biotechnology alliances: The effect of contextual factors. European Management Journal, 22(5), 546–556.CrossRefGoogle Scholar
de Man, A., & Roijakkers, N. (2009). Alliance governance: Balancing control and trust in dealing with risk. Long Range Planning, 42(1), 75–95.Google Scholar
DiMasi, J. (2001). Risks in new drug development: Approval success rates for investigational drugs. Clinical Pharmacology and Therapeutics, 69(5), 297–307.CrossRefGoogle ScholarPubMed
Doz, Y., & Hamel, G. (1998). Alliance advantage: The art of creating value through partnering. Boston, MA: Harvard Business School Press.Google Scholar
Eisenhardt, K. M., & Schoonhoven, C. B. (1996). Resource-based view of strategic alliance formation: Strategic and social effects in entrepreneurial firms. Organization Science, 7(2), 136–150.Google Scholar
European Union Commission (2013). Sixth FP7 monitoring report. Brussels, Belgium: European Union Commission.Google Scholar
Fagre, N., & Wells, L. T. Jr. (1982). Bargaining power of multinationals and host governments. Journal of International Business Studies, 13(2), 9–23.Google Scholar
Gimeno, J. (2004). Competition within and between networks: The contingent effect of competitive embeddedness on alliance formation. Academy of Management Journal, 47(6), 820–842.Google Scholar
Gulati, R. (1995). Social structure and alliance formation patterns: A longitudinal analysis. Administrative Science Quarterly, 40(4), 619–652.Google Scholar
Hagedoorn, J. (1993). Understanding the rationale of strategic technology partnering: Nterorganizational modes of cooperation and sectoral differences. Strategic Management Journal, 14(5), 371–386.CrossRefGoogle Scholar
Hagedoorn, J. (2002). Inter-firm R&D partnerships: An overview of major trends and patterns since 1960. Research Policy, 31(4), 477–492.Google Scholar
Hagedoorn, J. (2006). Understanding the cross-level embeddedness of interfirm partnership formation. Academy of Management Review, 31(3), 670–680.Google Scholar
Hair, J. F. Jr., Anderson, R. E., Tatham, R. L., & Black, W. C. (1995). Multivariate data analysis (3rd ed.). New York, NY: Macmillan.Google Scholar
Hamel, G., Doz, Y., & Prahalad, C. K. (1989). Collaborate with your competitors and win. Harvard Business Review, 67(1), 133–139.Google Scholar
Harrigan, R. (1988). Strategic alliances and partner asymmetries cooperative strategies in international business. Lexington, MA: Lexington Books.Google Scholar
Hennart, J. (1988). A transaction costs theory of equity joint ventures. Strategic Management Journal, 9(4), 361–374.Google Scholar
Hitt, M. A., Dacin, M. T., Levitas, E., Arregle, J. L., & Borza, A. (2000). Partner selection in emerging and developed market contexts: Resource-based and organizational learning perspectives. Academy of Management Journal, 43(3), 449–467.Google Scholar
Hsieh, L. H. Y., Rodrigues, S. B., & Child, J. (2010). Risk perception and post-formation governance in international joint ventures in Taiwan: The perspective of the foreign partner. Journal of International Management, 16(3), 288–303.Google Scholar
Huber, G. P., & Power, D. J. (1985). Retrospective reports of strategic-level managers: Guidelines for increasing their accuracy. Strategic Management Journal, 6(2), 171–180.Google Scholar
Jiang, X., Li, M., Gao, S., Bao, Y., & Jiang, F. (2013). Managing knowledge leakage in strategic alliances: The effects of trust and formal contracts. Industrial Marketing Management, 42(6), 983–991.Google Scholar
Jo, H., & Na, H. (2012). Does CSR reduce firm risk? Evidence from controversial industry sectors. Journal of Business Ethics, 110(4), 441–456.CrossRefGoogle Scholar
Kim, H., & Choi, S. (2014). Corporate performance drivers in vertical downstream alliance portfolios: The Korean defense industry. Journal of Management and Organization, 20(2), 148–164.Google Scholar
Kogut, B. (1988). Joint ventures: Theoretical and empirical perspectives. Strategic Management Journal, 9(4), 319–332.Google Scholar
Lavie, D., & Rosenkopf, L. (2006). Balancing exploration and exploitation in alliance formation. Academy of Management Journal, 49(4), 797–818.Google Scholar
Lee, R. P., Johnson, J. L., & Grewal, R. (2008). Understanding the antecedents of collateral learning in new product alliances. International Journal of Research in Marketing, 25(3), 192–200.Google Scholar
Lee, W. (2014). Environmental uncertainty affects inter-organisational partner selection: The mediating role of cost and strategy in alliance motivations among SMEs. Journal of Management and Organization, 20(1), 38–55.Google Scholar
Lerner, J., & Merges, R. P. (1998). The control of technology alliances: An empirical analysis of the biotechnology industry. Journal of Industrial Economics, 46(2), 125–156.Google Scholar
Luo, Y. (2005). Transactional characteristics, institutional environment and joint venture contracts. Journal of International Business Studies, 36(2), 209–230.Google Scholar
March, J. G., & Shapira, Z. (1987). Managerial perspectives on risk and risk taking. Management Science, 33(11), 1404–1418.CrossRefGoogle Scholar
Merna, T., & Al-Thani, F. F. (2005). Corporate risk management: An organizational perspective. London: John Wiley and Sons Ltd.Google Scholar
Milgate, M. (2000). Black-box protection of core competencies in strategic alliances. Journal of Management and Organization, 6(2), 32–43.Google Scholar
Miller, K. D., & Bromiley, P. (1990). Strategic risk and corporate performance: An analysis of alternative risk measures. Academy of Management Journal, 33(4), 756–779.Google Scholar
Miller, K. D., & Leiblein, M. J. (1996). Corporate risk-return relations: Returns variability versus downside risk. Academy of Management Journal, 39(1), 91–122.Google Scholar
Narula, R., & Hagedoorn, J. (1999). Innovating through strategic alliances: Moving towards international partnerships and contractual agreements. Technovation, 19(5), 283–294.CrossRefGoogle Scholar
Nielsen, B. B. (2010). Strategic fit, contractual, and procedural governance in alliances. Journal of Business Research, 63(7), 682–689.Google Scholar
Nooteboom, B., Berger, H., & Noorderhaven, N. G. (1997). Effects of trust and governance on relational risk. Academy of Management Journal, 40(2), 308–339.Google Scholar
Odagiri, H. (2003). Transaction costs and capabilities as determinants of the R&D boundaries of the firm: A case study of the ten largest pharmaceutical firms in Japan. Managerial and Decision Economics, 24(2–3), 187–211.CrossRefGoogle Scholar
Organisation for Economic Co-Operation and Development (2011). ISIC REV. 3 Technology intensity definition. New York: OECD.Google Scholar
Oxley, J. E., & Sampson, R. C. (2004). The scope and governance of international R&D alliances. Strategic Management Journal, 25(89), 723–749.Google Scholar
Paik, Y. (2005). Risk management of strategic alliances and acquisitions between western MNCs and companies in central Europe. Thunderbird International Business Review, 47(4), 489–511.Google Scholar
Park, S. H., & Russo, M. V. (1996). When competition eclipses cooperation: An event history analysis of joint venture failure. Management Science, 42(6), 875–890.Google Scholar
Park, S. H., & Ungson, G. R. (2001). Interfirm rivalry and managerial complexity: A conceptual framework of alliance failure. Organization Science, 12(1), 37–53.Google Scholar
Park, S. H., & Zhou, D. (2005). Firm heterogeneity and competitive dynamics in alliance formation. Academy of Management Review, 30(3), 531–554.Google Scholar
Parmigiani, A., & Rivera-Santos, M. (2011). Clearing a path through the forest: A meta-review of inter-organizational relationships. Journal of Management, 37(4), 1108–1136.Google Scholar
Phene, A., & Tallman, S. (2012). Complexity, context and governance in biotechnology alliances. Journal of International Business Studies, 43(1), 61–83.Google Scholar
Pisano, G. P., Russo, M. V., & Teece, D. (1988). Joint ventures and collaborative arrangements in the telecommunications equipment industry. In D. Mowery (Ed.), International collaborative ventures in U.S. manufacturing (pp. 23–70). Cambridge, MA: Ballinger.Google Scholar
Russo, B. (2004). A cost-benefit analysis of R&D tax incentives. Canadian Journal of Economics, 37(2), 313–335.Google Scholar
Sampson, R. C. (2004). Organizational choice in R&D alliances: Knowledge-based and transaction cost perspectives. Managerial and Decision Economics, 25(67), 421–436.Google Scholar
Silverman, B. S., & Baum, J. A. C. (2002). Alliance-based competitive dynamics in the Canadian biotechnology industry. Academy of Management Journal, 45, 791–806.Google Scholar
Smith, K. (2005). Measuring innovation, the Oxford handbook of innovation. Oxford: Oxford University Press.Google Scholar
Thompson, J. (1967). Organizations in action. New York: McGraw Hill.Google Scholar
Wang, Y. K. (2015). The impact of prestigious top management team on international alliance formation: Evidence from Taiwanese electronics firms. Journal of Management and Organization, 21(6), 835–852.Google Scholar
Williamson, O. E. (1975). Markets and hierarchies. Boston, MA: Free Press.Google Scholar
Williamson, O. E. (1981). The economics of organization: The transaction cost approach. American Journal of Sociology, 87(3), 548–577.Google Scholar
Williamson, O. E. (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36(2), 269–296.CrossRefGoogle Scholar
Yiu, D., & Makino, S. (2002). The choice between joint venture and wholly owned subsidiary: An institutional perspective. Organization Science, 13(6), 667–683.Google Scholar
Yoon, W., Lee, D. Y., & Song, J. (2015). Alliance network size, partner diversity, and knowledge creation in small biotech firms. Journal of Management and Organization, 21(5), 614–626.Google Scholar
Yoshino, M. Y., & Rangan, U. S. (1995). Strategic alliances. Boston, MA: Harvard Business School Press.Google Scholar