Alliance portfolios and firm performance: the moderating role of environmental dynamics
Abstract
Purpose
The purpose of this paper is to focus on the operation strategy of high-performance alliance portfolios by analyzing the effect of alliance portfolios on the performance of focal firms, using post-structuralism of social network theory and contingency theory. In detail, this paper refines alliance portfolios into three dimensions, and studies the moderating role of context on the relation between alliance portfolios and firm performance.
Design/methodology/approach
The empirical study was carried out with second-hand data gathered from Internal Revenue Service. In total, this paper gathered data from 506 focal firms in Zhejiang Province from 2001 to 2010 as the sample to test the hypotheses.
Findings
Based on the empirical results, the authors find the positive effect of relational dimension (weak alliance portfolios) and partner dimension (the diversity of partners) on performance. The effect of the former will become weaker with the increasing environmental dynamic, while the effect of the latter will become stronger. However, the structural dimension (alliance portfolios size) and relational dimension (new partners) have the negative effect on performance. And the negative effect will become stronger under high environmental dynamic. Moreover, the negative effect of non-local partners on performance becomes stronger when the environmental dynamic is high.
Research limitations/implications
The paper reveals that with the industry transformation caused by “internet +,” companies have been required go beyond traditional dyadic alliance management perspective. That is to say, individual alliance relationship should be seen as a part of a much broader picture of alliance portfolio. As such, the framework may help companies to manage their alliance portfolios by matching high-performance alliance portfolios to the external environment to produce a synergistic effect (Lea et al., 2006; Tritos et al., 2013; Keith et al., 2014) taking the characteristics of the configuration of alliance portfolios into consideration.
Originality/value
The paper presents a model that explains the effect of three dimensions of alliance portfolios on the performance of focal firms in different contexts through empirical study. This paper also integrates post-structuralism of social network theory and contingency theory to enable the understanding on the configuration of alliance portfolios.
Keywords
Acknowledgements
The authors are grateful to the Editor Chong, Alain and two anonymous reviewers for their helpful comments and suggestions. The authors also thank Jiebing Wu, Bin Guo, Shasha Zhou, Jiexiang Wang, Dapeng Yang and Fangfang Hou for their insightful comments on earlier drafts of this paper, and to the support of the project of Zhejiang Province Natural Science Foundation of China (No. LQ17G020007), the project of the Ministry of Education of P.R. China (Project Name: the reconfiguration of alliance portfolios of firms and the trigger mechanism based on prospect theory) and the project of National Natural Science Foundation of China (No. 71273227).
Citation
Wang, X. and Bao, H. (2017), "Alliance portfolios and firm performance: the moderating role of environmental dynamics", Industrial Management & Data Systems, Vol. 117 No. 8, pp. 1550-1566. https://doi.org/10.1108/IMDS-09-2016-0351
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited