"Factors affecting the nature of alliance governance and competitiveness "

Abstract

Coordination needs in alliances; nature of alliance governance and competitiveness of alliances are interdependent dimensions in alliances. Coordination needs are affected by technology transfer and strategic complexity which might result in alterations in the nature and background of the alliance. This research examines the effect of complexity in technological transfer, strategic specifications of the partners and prior experience of the firm in the target country on the nature of alliance governance and alliance competitiveness. Total Interpretive Structural Model (TISM) has been developed to determine the hierarchy amongst these factors. The findings provide important inferences on the factors that affect competitiveness of contractual alliances. Results suggest that nature of alliance-being contractual agreement or a joint venture influences the competitiveness of the alliance. Introduction Alliance governance has the options in the form of choice between contractual alliances (CA) and Joint Ventures (JV) that could determine its competitiveness (Harrigan, 1985; Doz and Hamel, 1998). These two forms lead to variations in the administration and form of governance proceedings of the collaboration (Culpan, 2009; Dhir and Mital, 2013a). Alliances help the firm gain access to knowledge and other resources while gaining legitimacy and therefore push the firm towards success (Glaister, 1998; Dhir and Mital, 2013b; Parameswar, Dhir and Ongsakul, 2018). The gravity of making these decisions has led a part of the firm's management devoting their time to making plans for future partnerships. The choice between the two forms of governance have already been studied by (Gulati and Singh, 1998; Oxley and Sampson, 2004). However, previous research has not followed a structured approach to examine the effect of factors on alliance governance system and its competitiveness. The factors affecting the choice of equity contribution by parent firms in alliance and further its impact on competitiveness. This study explores the effects of different factors in the nature of alliance i.e. contractual agreement or joint venture and on the shaping the competitiveness of the alliance.