The Role of Heuristics in Alliance Collaboration for Entrepreneurial Firms

Abstract

This chapter argues that reliance on either contracts or trust poses problems for many entrepreneurial firms in both the search for and the selection of potential alliance partners and in the governance of alliances once they have begun. Although effective contracts and trust are both desirable, this chapter notes that it is likely that entrepreneurial firms must often proceed with alliances in the absence of both conditions. It draws on a small but provocative body of research in the strategy field that examines the role of heuristics in strategy. It reviews three different approaches to heuristics and how they might apply generally to the understanding of alliances. The chapter focuses particularly on what it labels as deliberate heuristics and suggests different mechanisms by which entrepreneurs might develop such heuristics. It concludes by exploring several research questions that might enhance the understanding of the role of heuristics in the interfirm collaborations of entrepreneurial firms.