Decision making on governance of strategic technology alliances

Purpose - The purpose of this paper is to study the mechanism through which decisions on the preferred governance mode of strategic technology alliances are made at the firm level. Design/methodology/approach - The author constructed a value-mediated governance model that is empirically tested through a survey of 57 strategic alliances in the Greek wireless services industry and estimated through a Structural Equation Modeling technique, namely Partial Least Squares. Findings - Quasi-hierarchy governance modes are preferred by firms assessing their current value as high, and lacking fear of partners' opportunistic behavior. Quasi-market alliances are preferred by firms having high expectations for the future value of the alliance, and facing high endogenous uncertainty resulting from the existence of a competitive relationship with the partner. Research limitations/implications - While the resource and cost perspectives are founded on diverse assumptions on firms' ability to write complete contracts, their implications for the firms' decision-making behaviour on the alliance governance issue seem to be complementary to those of the value perspective. Practical implications - Transitional governance forms, quasi-market alliances that evolve to quasi-hierarchy alliances, seem to be preferred in emerging technology-based environments. Originality/value - The Expected Alliance Value concept is introduced to explain how exogenous uncertainty characterizing the environment of emerging technology-based industries can influence the already investigated effects of the partner uncertainty and the firm's current value on the alliance governance preferences.