The Impact of External Contexts on Alliance Governance in Biotech–Pharmaceutical Firm Alliances

Abstract

The interest in strategic alliances has increased over the years, especially in high tech global industries such as biotechnology, as firms seek to gain access to needed resources, expertise, and knowledge for developing and commercializing new products and technologies. The governance structure of these alliances, which is an important consideration in understanding alliance formation and performance, is influenced by both external and internal contexts of the alliance partners. However, evidence from prior research has been inconclusive regarding the impact of external contexts on alliance governance selection. To better understand this impact, we simultaneously examine three key partner external contexts - international, technological, and social contexts, and their influence on biotechnology-pharmaceutical alliance governance structure selection. Using a sample of 389 alliances formed during the six-year period 1995 through 2000, we find that the international context, specifically national cultural distance between alliance partners, and the social context, specifically credibility of the biotechnology partner in the alliance network, influence governance structure selection. We offer implications of our findings for theory, future research, and management practice.

Keywords:

• national culture
• social capital
• technological munificence
• alliance
• governance structure

Additional information

Notes on contributors

Joanne L. Scillitoe

Joanne L. Scillitoe, PhD, is an associate professor of entrepreneurship and director of Center for Entrepreneurial Studies in the School of Management at New York Institute of Technology. Her research interests are incubation processes, technology transfer, and strategic alliances. She has published and presented nearly 35 scholarly works, including in Journal of Management Studies, Technovation, and Journal of Engineering Technology Management, and has several Best Research Paper awards (PICMET 2005; MWAIS 2006; AOM 2009). She can be reached at [email protected].

Shanthi Gopalakrishnan

Shanthi Gopalakrishnan, PhD, is a professor of management in the School of Management at New Jersey Institute of Technology. Her research interests are knowledge and innovation management and strategic alliances. She has published more than 30 articles in leading journals such as Journal of Management Studies, IEEE Transactions of Engineering Management, Journal of Engineering and Technology Management, and Academy of Management Executive. She has won several Best Research Paper Awards (AOM 1997, 2009; IEEE 2001). She was the president of Eastern Academy of Management and currently serves on several journal editorial and advisory boards (Group and Organization Management and Organization Management Journal). She can be reached at [email protected].

Michael D. Santoro

Michael D. Santoro, PhD, is a professor of management in the College of Business and Economics at Lehigh University. His research interests are strategic alliances and the external sourcing of knowledge and technological innovation. He has nearly 30 publications in edited volumes and leading peer-reviewed journals, including Strategic Management Journal, Research Policy, and Journal of Management Studies, among others. Santoro currently serves on the editorial review board for IEEE Transactions on Engineering Management. He can be reached at [email protected].