Socio-emotional wealth preservation (SEW-P) can create a dilemma for family firms when seeking to establish strategic alliance: how to manage the need to establish strategic alliances aimed at obtaining complementary network-based resources (the economic dimension) with the fear that such a move may jeopardize family control and domination (the SEW dimension). To address this dilemma (also labelled as a 'mixed gamble'), we theorized that the concern to preserve SEW (i.e. SEW-P) can contribute to family firms' alliance success being dependent on the leverage of alliance management capability (AMC). We also propose that SEW-P can act as an organizational cognitive enabler for AMC. Yet the positive association between SEW-P and AMC will become stronger when family firms operate in a politically unstable environment. We tested these hypotheses using a unique dataset collected from 302 family firms operating in a politically unstable environment (the Libyan context), and the analysis lends support to our model and predictions. Overall, the study advances the alliance theories and family business literature by adding new insights that explain the effect of non-financial priorities of family firms, and related contingencies, in predicting alliance success.
Despite the research on alliance management capability (AMC) has evolved in recent years, we still lack a clear understanding of its antecedents and performance outcomes in the context of family businesses, a setting that is inherently different from a typical firm-to-firm corporation. Collecting data from the Libyan family firms sector, we found that alliance experience, family culture (as internal antecedence), and political instability (as external antecedence) are crucial for AMC development, where the latter has a significant effect on the alliance performance of these firms. We also discuss the theoretical and practical implications of our study.
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