Unilateral commitment in alliances: an optional behaviour

Abstract

Purpose

The coordination difficulties and risks inherent to business conduct are magnified in alliance relationships, posing a greater challenge for partners. The purpose of this paper is to propose real option perspective to examine how relational risk perceptions shape commitment behaviour in biotechnology alliance relationships.

Design/methodology/approach

The hypotheses are tested with survey data on 344 alliance relationships of European Biotechnology small to medium‐sized enterprises (SMEs).

Findings

This paper suggests that commitment can be seen as a real option, which reduces the degree of asymmetry of information concerning a partner's behaviour. The findings stress that endogenous uncertainty makes unilateral commitment more attractive, but the conclusion does not show that it enhance perceived relationship effectiveness for the party that unilaterally commits in a unique time period.

Research limitations/implications

Nevertheless, within this paper the real options logic to alliance commitments was applied to single dyadic relationships given the alliances were considered an optional context. It would be worthwhile to insert the unilateral commitment decisions for one alliance in the overall portfolio of potential future opportunities.

Practical implications

From a managerial point‐of‐view, this paper shows that unilateral commitments can be seen as the expression of an optional behaviour. These commitments will not benefit the organization in the short term. Managers should adopt a holistic approach and consider all aspects of this problem.

Originality/value

This paper tests a model of unilateral commitment and provides empirical evidence to explain some managerial behaviors.

Citation

Delerue, H. and Perez, M. (2009), "Unilateral commitment in alliances: an optional behaviour", Journal of Management Development, Vol. 28 No. 2, pp. 134-149 . https://doi.org/10.1108/02621710910932098