On Some Procedures of Forming a Multi-partner Alliance
AbstractWe study two different ways of forming multi-partner alliances between ﬁrms with the central idea that procedure is an important factor in multi-partner alliance formation. In the ﬁrst procedure, an alliance is formed simultaneously, while in the second, step-by-step procedure, members are added one by one. In the model we present, each ﬁrm is assumed to have a multidimensional maneuvering space, which consists of all alliance positions acceptable to the ﬁrm, and an ideal position in this space. Alliances will form between the ﬁrms whose maneuvering spaces overlap. The results of the analysis conﬁrm that procedure is an important factor in multi-partner alliance formation. Nevertheless, if ideal positions of ﬁrms are acceptable to all alliance partners, then the result of alliance formation does not depend on procedure. In addition, it is shown that it can be disadvantageous to be a ﬁrst mover. Finally, we are able to provide sufficient conditions under which one procedure is preferred in a three-partner case. More speciﬁcally, a ﬁrm with its ideal position acceptable to the two other ﬁrms may prefer the simultaneous procedure to being a late mover if (1) there is a certain balance in the ﬁrms' degree of ﬂexibility and their power and (2) if the agreed alliance position of the two other ﬁrms is acceptable to the ﬁrm in question.
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Date of creation: 2008
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Publication status: Published, Journal of Economics & Management Strategy / Journal of Economics and Management Strategy, 2008, 17, 2, pp. 443-487
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Procedures of Forming an Alliance;
Other versions of this item:
- Annelies de Ridder & Agnieszka Rusinowska, 2008. "On Some Procedures of Forming a Multipartner Alliance," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 17(2), pages 443-487, 06.
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