Bound to Last? Alliance Persistence in the Presence of Alternative Pa...

Throughout the past two decades, scholars in the field of strategic alliances have become increasingly interested in the post-formation dynamics and the evolution of interfirm relationships (e.g., Ariño et al., 2008). In this context, two inherently different streams of argumentation have been developed: proponents of alliance persistence have been emphasizing cohesive forces leading to inertia and longevity of established collaborations (e.g., Uzzi, 1997) despite the fact that some of them fail to produce the anticipated results (Patzelt and Shepherd, 2008). Potential reasons for this behavior include inflated attachment between partners resulting from prior and current ties (Levinthal and Fichman, 1988) and aversion to realize losses resulting from past partner-specific investments (Delios et al., 2004). In contrast, alliance instability literature emphasizes disruptive forces, such as frictions between the partners (Greve et al., 2010) that can result in premature alliance termination. Recently, Greve et al. (2013) have added to our understanding in this field by demonstrating the effect of outside options for the instability of inter-firm partnerships and in that regard emphasized the need to distinguish between failure- and option-driven alliance termination. Accordingly, some firms deliberately withdraw even from well-performing alliances, due to the availability of alternative partners possessing a higher match quality with the focal firm.

We build upon this nascent stream of option-driven alliance termination by experimentally examining, whether decision makers are indeed willing to withdraw from established partnerships in order to enter into collaborative agreements with outside options. In this regard, we introduce the term “partner switch”, defined as the substitution of an existing alliance partner with an alternative one that provides higher relative match quality along a set of alliance- and partner-specific characteristics. We develop a conjoint experiment in which decision makers are confronted with existing as well as alternative alliance partners, both of which are described along a set of six attributes. We report our results based on a dataset of 2,400 experimental ratings, conducted by 120 alliance managers.