Chapter 1: Managing Uncertainty in Alliances and Networks: From Governance to Practice

Alliances and networks formed by two or more organizations are an increasingly common means to cope with environmental uncertainty frequently resulting from incomplete knowledge. At the same time, alliances and networks must address uncertainty caused by the form itself, which, unlike risk, is not calculable. Our review and analysis of the literature on the topic first distinguishes between the concepts of risk and uncertainty, and then identifies three gaps in the literature that offer directions for future research. First, dyadic alliances, rather than broader networks, have been the predominant focus of researchers, limiting our understanding of the scope of uncertainty. Second, previous research concentrates on vaguely defined interorganizational relations and not more in-depth collaborations, which are far more meaningful and have a greater impact on addressing uncertainty. Third, a governance perspective has typically been applied to deal with the risks and uncertainties ensuing from alliances and networks, limiting an understanding of the impact of uncertainty on practice. To address these concerns, we call for an emphasis on genuine uncertainties rather than risks, on consideration of alliances and networks of three or more organizations rather than only dyads, and moving beyond a governance perspective, considering also how managers actually “practice uncertainties” in the face of their inability to control, reduce, or even avoid the lack of knowledge.