Role of Context and Contest in the Structuring of Alliance Governance

The alliance governance – whether equity or nonequity based – through which an alliance is governed serves as a mechanism to protect a firm from partner’s opportunistic behavior, manage resource dependence and facilitate knowledge sharing. Alliance governance structure also reflects the risk, reward and control that partners perceive in a relationship. In light of the conflicts and instabilities reported in strategic alliances, it is critical to examine the interorganizational domain that affects the endurance and continuity of collaboration and explain how the alliance interface contexts determines the structuring of alliance governance. An empirical examination, using survey and archival data, revealed that the complexity of alliance task, balance of power, and competitive scope between partners are significantly related to the mode of alliance governance – whether nonequity, minority-equity, or joint venture.