Choice and performance of governance mechanisms: Matching alliance governance to asset type

Glenn Hoetker, Thomas Mellewigt

Research output: Contribution to journalArticle

256 Scopus citations

Abstract

Formal and relational governance mechanisms are used in strategic alliances to coordinate resources and mitigate the risk of opportunistic behavior. While recent work has shown thathese approaches are not mutually exclusive, we understand little about when one approach is superior to the other. Using data on the governance choices and subsequent performance of alliances in the German telecommunications industry, we find that the optimal configuration of formal and relational governance mechanisms depends on the assets involved in an alliance, with formal mechanisms best suited to property-based assets and relational governance best suited to knowledge-based assets. Furthermore, a mismatch between governance mechanisms and asset type can harm the performance of the alliance. Our findings contribute to transaction cost economics, the literature on relational governance, and recent work studying their interaction.

Original languageEnglish (US)
Pages (from-to)1025-1044
Number of pages20
JournalStrategic Management Journal
Volume30
Issue number10
DOIs
StatePublished - Oct 1 2009

Keywords

  • Alliances
  • Formal governance
  • Relational governance
  • Telecommunications industry

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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