THREE ESSAYS ON THE CHOICE OF DECISION-MAKING STRUCTURES IN ALLIANCES AND OTHER COMBINED VENTURES AND THE PERFORMANCE IMPLICATIONS OF SUCH CHOICE AT THE DYADIC AND FIRM LEVELS

Abstract

The optimal choice of a decision-making structure in alliances and other combined ventures is an important yet underexplored question. There is no single theory that predicts what types of decision-making structures will be optimal in different alliances. Existing research, while offering insights into the factors influencing the choice of a decision-making structure, does not offer a unified framework of such a choice or the performance implications of various choices. The present dissertation is an attempt to fill this void. The first essay is a conceptual examination of the various factors that may affect the optimal choice of a decision-making structure. I build a general model and outline gaps in the existing research. The second essay considers the implication of interdependence between the collaborating firms and the internal complexity of the firms for the optimal choice of a decision-making structure. I build a simulation model that shows how asymmetric interdependence and significant internal complexity of the partners can reduce the need to centralize decision making in alliances and other combined ventures. The third essay is a study of individual costs and benefits that each partner in an alliance enjoys or bears as a result of collaboration under interdependence. I use computer simulations to show that the size and sign of the individual performance benefits depends on the chosen decision-making structure and the pattern of interdependence between the collaborating firms. The significance of this dissertation lies in the examination of factors unrelated to opportunism as antecedents of an optimal choice of a decision-making structure, which is part of a wider concept of governance mode choice. The findings in this dissertation contribute to the theory of the firm and to the theory of strategic alliances.