Free‐riding in multi‐party alliances: The role of perceived alliance effectiveness and peers' collaboration in a research consortium

Abstract

Research summary: Multi‐party alliances rely on partners' willingness to commit and pool their efforts in joint endeavors. However, partners face the dilemma of how much to commit to the alliance. We shed light on this issue by analyzing the relationship between partners' free‐riding—defined as their effort‐withholding—and their perceptions of alliance effectiveness and peers' collaboration. Specifically, we posit a U‐shaped relationship between partners' subjective evaluations of alliance effectiveness and their free‐riding. We also hypothesize a negative relation between partners' perceptions of the collaboration of peer organizations and their free‐riding. Results from a mixed‐method study—combining regression analysis of primary data on a major inter‐organizational research consortium and evidence from two experimental designs—support our hypotheses, bearing implications for the multi‐party alliances literature. Managerial summary: Free‐riding is a major concern in multi‐party alliances such as large research consortia, since the performance of these governance forms hinges on the joint contribution of multiple partners that often operate according to different logics (e.g., universities, firms, and government agencies). We show that, in such alliances, partners' perceptions have relevant implications for their willingness to contribute to the consortium's shared goals. Specifically, we find that partners free‐ride more—that is, contribute less—when they perceive the effectiveness of the overall alliance to be either very low or very high. Partners also gauge their commitment to the alliance on the perception of the effort of their peers—that is, other organizations similar to them. These findings provide managers of multi‐party alliances with additional levers to motivate partners to contribute fairly to such joint endeavor. Copyright © 2015 John Wiley & Sons, Ltd.

Untangle Multi-Organizational Collaboration From Value Co-creation

“…However, in the value co-creating system, we argue that shared goals (Fonti et al, 2017;Lindenberg & Foss, 2011;Xia et al, 2012) dominant over relationships in replacing authoritarian governance. For the first reason, radical technology changes and intensified global competition force organizations to be more agile in responding to business changes, and switching partners becomes necessary for survival.…”

“…Received literature has provided ample insights into the bilateral relationships within the multi-organizational collaborations, but less is discussed about multi-lateral relationships (Tomasello et al, 2016). Studies into multi-later relationships are emerging, for example, Fonti, Maoret, and Whitbred (2017) conceptually theorize how the focal firm's evaluation of other members in a consortium would affect the collaboration and also implement the survey of cross evaluation of multiple organizations in the collaboration system to accentuate the fact that more than two members affect the potential performance of a consortium.…”

“…In the long run, reciprocity can induce continuous contribution of those resource or capability owners. In addition, it passively prevails against harmful conducts (Fonti et al, 2017).…”

“…This means that organizations in the collaboration system are willing to contribute to the collective good when they know they will receive fair value from the system (Dyer & Singh, 1998). On the other hand, free-riding (Fonti et al, 2017), lack of effort or not doing one's best, is punished, and those who free ride might leave the system. In a word, these three mechanisms are critical for keeping effort-paying organizations in the system, building up multi-organizational relationships, generating self-enforcing atmosphere, and ultimately allowing the co-creating system to last.…”

“…Under this circumstances, shared goals, on the other hand, are more achievable and effective in enhancing multi-organization value co-creation. Since shared goals call for the contributions from all organizations in the collaboration system in the system (Fonti et al, 2017), they are more powerful than relationships in binding the organizations together. Besides, shared goals can endure the test of time.…”