Multilevel Embeddedness in Multilateral Alliances: A Conceptual Framework

Abstract

In this paper we propose a conceptual framework for understanding inter-partner dynamics in multilateral alliances involving common alliance processes, dyadic ties, and external transaction networks. The difference between alliance networks and multilateral alliances is the formalization of organization and common alliance processes in the latter. The firm-specific value in multilateral alliances is often buried in dyadic ties, that can be the prime motivator to join in the first place, but at the same time hindering common alliance processes. This multiplexity of relations, multilevel embeddedness, is both a source of strategic constraints and opportunities. Multilateral alliances set firms heading towards increased rigidity, cooperation and long-term orientation, requiring careful management of rising exit barriers to preserve strategic flexibility.

Keywords: alliance processes, embeddedness, multilateral alliance, horizontal alliance, inter-partner dynamics, tensions perspective

JEL Classification: L1, L10, L22, L8