Environmental uncertainty affects inter-organisational partner selection: The mediating role of cost and strategy in alliance motivations among SMEs

Lee, Wei-Long

doi:10.1017/jmo.2014.22

Cited by 12 publications

(8 citation statements)

References 77 publications

(117 reference statements)

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“…Inter-firm partnerships also enable a firm to deal with external uncertainty (Podolny, 1994; Beckman et al , 2004; Xie et al , 2013; Lee, 2014). The uncertainty-based view suggests that market uncertainty, which defined as the difﬁculty ﬁrms have in predicting the future due to incomplete knowledge, is the primary determinant of firms’ preferences for various partner selection strategies (Beckman et al , 2004; Baum et al , 2005; Kacperczyk et al , 2015).…”

Section: Introductionmentioning

confidence: 99%

Inertia, uncertainty, and exploratory partner selection

Liang

Mei

2019

JBIM

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Purpose The purpose of this paper is to examine the following research question in partner selection decisions in business-to-business strategic partnerships/collaborations literature: How do inertia and uncertainty affect partner selection? Explicitly, the paper analyzes how inertia of previous alliance selection routines and uncertainty of entire market movement shape firms’ preferences regarding exploratory partner selection (i.e. selecting new partners who never collaborate with the focal firm). Design/methodology/approach Grounded on inter-firm partnerships, partner selection and network theory literature, the study empirically tests a fine-grained sample of 511 open-end funds initiated by 61 fund management firms in China. To do so, it runs Tobit regression for main analysis and applies a variety of sensitivity analyses to check the robustness. Findings Results show that inertia in previous partner selection has a negative effect on exploration. Importantly, these inertial forces impact domestic firms but not international firms. Market uncertainty also affects exploratory partner selection: short-term market uncertainty encourages exploration, whereas long-term uncertainty inhibits it. These effects also depend on firms’ type: long-term market uncertainty has a negative effect on exploration for international firms but not for domestic firms. Both types of firms exhibit a stronger tendency toward exploration when they encounter short-term uncertainty. However, this inclination is stronger in international firms. Originality/value Earlier research has examined how inertia affects exploitation but largely overlooked its effect on exploration. A critical examination of firm and environment level factors provides a deeper understanding of why and when firms have inconsistent preferences for specific partner selection strategies. Thus, this study offers a unique perspective for understanding firms’ exploratory partner selection by focusing on two important characteristics of focal firms: one internal (inertia) and one external (market uncertainty) in nature.

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Section: Introductionmentioning

confidence: 99%

Inertia, uncertainty, and exploratory partner selection

Liang

Mei

2019

JBIM

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“…Second, although this study focused on the contract terms and relative characteristics of partners, prior research also noted environmental factors as determinants of alliance activities (Podolny, 1994;Beckman et al, 2004;Lee, 2014). Accordingly, future research needs to look at the link between environmental characteristics (e.g.…”

Section: Limitations and Future Researchmentioning

confidence: 97%

“…Motivation for repeated partnership From the TCE perspective, repeated partnership allows firms to effectively manage transaction costs associated with initiating a new alliance. First, firms often form alliances with existing partners as an effort to attenuate partner uncertainty (Podolny, 1994;Beckman et al, 2004;Goerzen, 2007;Holloway and Parmigiani, 2016;Lee, 2014). Experience accumulated from repeated partnerships increases the predictability of partner behavior (Gulati, 1995a; 2238 MD 55,10 Zollo et al, 2002;Beckman et al, 2004;Das and Kumar, 2007).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

When do firms enter a repeated partnership? The effect of contract terms and relative partner characteristics

Lee

2017

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Purpose The purpose of this paper is to understand the mechanisms of partner selection from the transaction cost economics’ viewpoint. This paper reveals that a firm’s choice to initiate a new alliance with a new partner or form a repeated alliance with an existing partner depends on contract terms and the relative characteristics of partners. Design/methodology/approach The authors examine 555 alliances in high-tech industries from 2001 to 2009, which the authors collected from secondary sources, including the Securities Data Company Platinum and Compustat databases. The authors use a logit model to reveal the effect of contract terms and relative partner characteristics on repeated partnership. Findings The results show that repeated partnership is less likely to be combined with equity sharing. Repeated partnership is also negatively associated with the functional scope of a new alliance. Finally, a firm is more likely to enter a repeated partnership when its partner is from a different country. Originality/value This research provides new insights into how the choice of an alliance partner depends on contract terms and the relative characteristics of partners. Identifying factors associated with partner selection helps us understand the fundamental mechanisms of initiating a new alliance. It allows focal firms to foresee the behavior of their peers or competitors in certain circumstances and thus provides important insights for developing corresponding strategies more effectively.

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“…Yoshino and Rangan (1995), Nielsen (2010) and Lee (2014) asserted that choosing an appropriate alliance governance mode is important for the success of a strategic alliance. Different types and typologies of alliance governance modes have been suggested.…”

Section: Literature Reviewmentioning

confidence: 99%

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

Kim

2017

Journal of Management & Organization

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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.

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Environmental uncertainty affects inter-organisational partner selection: The mediating role of cost and strategy in alliance motivations among SMEs

Cited by 12 publications

References 77 publications

Inertia, uncertainty, and exploratory partner selection

Inertia, uncertainty, and exploratory partner selection

When do firms enter a repeated partnership? The effect of contract terms and relative partner characteristics

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

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