Strategic Interaction in Alliances

Abstract

This article studies strategic interactions between firms that form alliances to exploit synergistic benefits. Firms cooperate to create value, but they can also compete to capture value. Fundamental questions rarely addressed by strategy scholars relate to how the configuration of control over resources influences firms' strategies, the potential for termination, and the emergence of cooperation and trust. The formal results reveal crucial aspects of the interorganizational rent-generating process and yield testable implications. With greater synergistic benefits, firms invest more, but they also compete more intensively to capture more value. With symmetric control, more value gets created, which limits the potential for termination but also exacerbates the competition for value; from a relational perspective, this form of control augments the calculative rationale of cooperation and trust.

Keywords: strategic alliances; configuration of control, cooperation and competition, value creation and value capture, termination

JEL Classification: D21, D23