Chapter 5: A Circumplex Approach to Interpartner Dynamics in Strategic Alliances

A strategic alliance is a long-term contractual agreement between two or more firms to share resources and realize individual and common objectives (Das & Teng, 2000a). Although alliances nowadays constitute the cornerstone of many firms’ strategies, they also tend to exhibit a mix of promise and peril, resulting in a high failure rate of up to 50% (Das & Teng, 2000b). Such a high failure rate highlights the need for alliance managers to overcome adverse situations by responding to their partners’ selfserving behaviors (Luo, Shenkar, & Gurnani, 2008) as well as unforeseen circumstances (Tjemkes & Furrer, 2010). While there is a large amount of scholarly work on alliance formation and governance structure, little is known about interpartner dynamics in strategic alliances once the partners reached an initial agreement (De Rond & Bouchikhi, 2004). Therefore, opening the black box of interpartner dynamic behavior is salient, as it would enable managers to better steer their alliance relationships toward success (Das & Teng, 2000b).