Uneven partners: managing the power balance

Abstract

Purpose

Research suggests that asymmetry has a negative impact on value creation and value distribution and assumes that the smaller partner has an inferior position and must defend itself from value misappropriation. However, industries are plagued with a range of business relationships of varying degree of imbalance. Ambitious and growth-oriented small firms enter relationships with larger counterparts, tolerate the imbalance and learn to achieve successful outcomes. In spite of the increasing importance of asymmetric partnerships, there are still many research and conceptual lacunas.

Design/methodology/approach

Ideas and conclusions of this paper are based on the authors’ experience as well as on evidence from a qualitative case study conducted at a small- and medium-sized enterprise (SME) and one of its key larger partners.

Findings

Findings reveal that asymmetric partnerships may offer a clear route to value creation and innovation for firms. Moreover, both partners can fully appropriate the value jointly generated.

Originality/value

Asymmetric partnerships, generally characterized by large dissimilarities between firms, offer the possibility of moving beyond the zero-sum game, where firms obtain value at the expense of their partners. By examining the development and dynamic aspects of these partnerships, we found a novel concept, “dual-value appropriation”, and addressed the issues of how and under which conditions dual value emerges to explain the success of asymmetric partnerships.

Citation

Pérez, L. and Cambra-Fierro, J.J. (2015), "Uneven partners: managing the power balance", Journal of Business Strategy, Vol. 36 No. 6, pp. 13-21. https://doi.org/10.1108/JBS-10-2014-0126