The effectiveness of contractual and trust-based governance in strategic alliances under behavioral and environmental uncertainty

R. Krishnan, Inge Geyskens, J.E.B.M. Steenkamp

Research output: Contribution to journalArticleScientificpeer-review

52 Citations (Scopus)

Abstract

We examine the interplay of behavioral and environmental uncertainty in shaping the effectiveness of two key governance mechanisms used by strategic alliances: contractual and trust-based governance. We develop and test hypotheses, using a meta-analytic dataset encompassing over 15,000 strategic alliances across 82 independent samples. We find that contractual governance works best under low to moderate levels of behavioral uncertainty and moderate to high levels of environmental uncertainty, while it is detrimental to alliance performance when both types of uncertainty are low or high. Trust-based governance is most effective at high levels of behavioral uncertainty and low levels of environmental uncertainty. It suffers a large loss of usefulness at high behavioral uncertainty as environmental uncertainty increases.
Original languageEnglish
Pages (from-to)2521-2542
JournalStrategic Management Journal
Volume37
Issue number12
DOIs
Publication statusPublished - Dec 2016

Keywords

  • alliances
  • performance
  • trust-based governance
  • uncertainty

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