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Understanding the dynamics of alliance capabilities

  • Strategic alliances have become important strategic options for firms to achieve competitive advantage. Yet, there are many examples of alliance failures. Scholars have studied this phenomenon and identified many reasons for alliance failure, including lack of trust between the partnering firms. Paradoxically, the concept of trust is still not fully understood, specifically how and under what conditions trust comes to break down within the broader process of alliance building. We synthesize a process model that describes the “alliance capability”, including trust, openness, partner contributions, and relational rents. We then translate this framework into a formal simulation model and analyze it thoroughly. In analyzing trust dynamics we identify and explore a tipping boundary, separating a regime of alliance failures and successes. We apply our core findings to openness strategies – decisions about how much knowledge to share with partners. Our analyses reveal that strategies informed by a static mental model of trust, contributions, and openness, under undervalue openness. Further, too little openness risks early failure due to the being trapped in a vicious cycle of trust depletion.

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Author of HS ReutlingenKapmeier, Florian
Erschienen in:Proceedings of the 35th International Conference of the System Dynamics Society and 60th Anniversary of System Dynamics Celebration, Cambridge, Massachusetts, USA Conference
Publisher:System Dynamics Society
Place of publication:Albany, NY
Document Type:Conference proceeding
Publication year:2017
Page Number:28
First Page:1
Last Page:28
DDC classes:650 Management und unterstützende Tätigkeiten
Open access?:Ja
Licence (German):License Logo  Open Access