This study aims to shed light on the controversial debate regarding the substitutive or complementary nature of the\ud relationship between inter-organizational trust and formal control as governance mechanisms in affecting\ud international alliance performance. We deepen understanding of the trust–formal control interaction by considering\ud the multidimensional nature of formal control – both output and process control – and examining the role of trust as a\ud moderating variable in the relationship between these two distinct kinds of control and alliance performance. We test\ud the research hypotheses on a sample of 138 international alliances involving Italian firms and foreign partners. First,\ud we find that only output control has a significant positive influence on alliance performance and that trust shows a\ud fully significant positive effect on alliance success. Second, we find that trust moderates the effect of formal control\ud on alliance performance by reducing the relevance of output control and increasing that of process control

By combining the advantages of systematic and behavioural-based international market selection approaches, we build and test an International Market Selection (IMS) decision process method that is able to capture, within a small firm’s risk-averse setting, the entrepreneur’s experience, reduce cognitive biases, and preserve the flexibility of the decision.\ud The unit of analysis is the IMS decision process of a small firm venturing abroad. We adopt a ranking approach based on three-step screening. We assess the markets through a multi-criteria approach with a wider set of variables aggregated within a tree-shaped model. To obtain the ranking we use a Fuzzy Expert System (FES) as an evaluative tool. \ud The results show that the proposed decision method is consistent with the entrepreneur’s strategic orientation and experience, while preserving the flexibility requested for decision making in small firms. Unlike traditional behavioural IMS approaches, the method demonstrates an ability to reduce the cognitive biases associated with the use of a limited set of variables and unreliable evaluation models. \ud The single-case-study approach limits generalization of the findings. \ud The proposed methodology helps the decision maker to improve the quality of the IMS decision by reducing the effect of cognitive biases that usually affect traditional behavioural models. \ud For the first time, a decision-process methodology based on an FES is applied to a small firm’s IMS problem

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Business economics does not provide anymethodology for appraising strategic investments, relyingon informal approaches. Conversely, financial economicsoffers us plenty of sophisticated mathematical modelsunsuitable for applications and based on unrealisticassumptions. This paper presents an example of howstrategic investments may be handled with a formal buteasy-to-understand tool. While this paper shows a specificapplication, a real-life case, we think the model hereproposed may be generalized, so contributing to developinga new approach to business decisions. In particular,we think of a fuzzy expert system approach as a convenienttool overwhelming many of the shortcomingsinherent in the ‘‘crisp’’ approaches of the financial literature(DCF methods, options pricing, dynamic programming),while avoiding at the same time the refusal of anymethodology (typical of business economics). The ideahere presented develops some results by Magni et al.(2001) and Facchinetti et al. (2001). An evaluation functionis drawn up via ‘‘if-then’’ rules; the latter are made towork automatically by means of an expert system, whichadequately replicates the evaluation of human experts.A sensitivity analysis is presented to test the soundness ofthe model