Chapter 7: Interpartner Dynamics in Asymmetric Strategic Alliances: The Role of Interpersonal Networks

Asymmetric alliances are usually characterized by the domination of one partner by the other, and recent research shows that asymmetric alliances tend to favor opportunistic behavior (Das & Rahman, 2010). In certain cases, however, asymmetric firms can achieve a balanced interorganizational relationship. In this chapter, we identify the interpersonal dynamics that influence the relationship by focusing on a key period in the process: negotiation. The negotiation process is characterized by differences in interests and power, the importance of context, and the individual and collective external actors who intervene in the process.

Through a chronological and longitudinal approach, this chapter analyzes the negotiations between two asymmetric firms in the web industry, X Telecom (320 employees) and Web Interactive (12 employees), which are direct competitors but using different technologies. The negotiation process comprised three stages, and for each one we focus on the role of interpersonal networks and dynamics: the failure of the first negotiation, a negotiation between X Telecom and the main competitor of Web Interactive, and a second successful negotiation between the two firms. Although the competitor of Web Interactive had a better technology, we show that informal variables such as shared social networks, past working relationships, and cultural proximity provided Web Interactive with the means to negotiate effectively with X Telecom and establish a balanced strategic alliance.