Alliance Experience and Accommodation in the Choice of Alliance Governance Structure
46 Pages Posted: 12 Oct 2010
Date Written: October 12, 2010
This paper explores a less-recognized aspect of alliance management capabilities, accommodation, which occurs when a firm refrains from applying its bargaining power, agreeing to terms that address their partner’s concerns or interests to a greater degree than their own. Despite its potential importance, the strategy and marketing literatures provide few insights into when and how accommodation occurs in alliances. We propose that firms with greater alliance experience are more likely to accommodate their partner’s concerns through the choice of governance structure, relying on their accumulated alliance capabilities to mitigate their own governance concerns. We find evidence to support our propositions in innovation alliances initiated between target and client firms in the biotechnology and pharmaceutical industries. In addition to formally introducing the concept of accommodation into the literature on the governance of alliances, we establish that there are boundary conditions for accommodation to occur; in our case, sufficient alliance experience. Moreover, we provide evidence in support of the transaction value perspective, which - while intellectually appealing - has been difficult to test empirically. Lastly, we demonstrate the value of considering the (possibly conflicting) concerns and preferences of all partners in the alliance, rather than focusing on the hazards faced by a focal partner.
Keywords: Accommodation, alliance experience, resource integration, alliance governance structure
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