Governance, Negotiations, and Alliance Dynamics: Explaining the Evolution of Relational Practice

Abstract

This paper explores relational practice in strategic alliances. Focusing on how governance mechanisms and negotiation strategies evolve and form patterns of interaction that are under influence of both recursive and adaptive forces, four modes of relational practice are discussed: recursively integrative, recursively distributive, adaptive toward integrative, and adaptive toward distributive. Three longitudinal cases are examined. I find that different contractual conditions enable (or restrain) interaction patterns. Negotiation behaviour, in turn, affects future contractual conditions and their combination and recombination form the evolution of relational practice. As relationships progress, initial governance mechanisms are complemented and negotiation behaviours change. I explain how perceptions of both process and relational outcomes influence relational practice. In addition, I explicate why relational practices have both recursive and adaptive characteristics, and identify conditions that cause relational practices to move towards more integrative or distributive modes. Copyright (c) Blackwell Publishing Ltd 2009.

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“…We acknowledge that relational aspects, in terms of the characteristics of individual ties (whether they involve high levels of trust, problem solving, etc. ), can also be of interest (Gulati, 1998;Ness, 2009). However, simultaneously including both structural and relational variables in the same study will add complexity (see for instance Hinde, 1976), which can be challenging to handle both theoretically and methodologically.…”

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“…Although several authors relate stages of relationship formation to governance mechanisms (e.g., Ariño and De La Torre, 1998;Ness, 2009), the innovation phasing concept is principally unrelated to the maturity of the relationship. For example, even before the development of a novel service concept, actors may already have long-lasting relationships.…”

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“…This is a significant limitation in that we know very little about how partners in such alliances manage their interactions. Process‐related issues remain underresearched in the field of alliances (Ness, 2009) and in the field of outsourcing partnerships in general.…”