Hostname: page-component-784d4fb959-wxg6b Total loading time: 0 Render date: 2025-07-15T14:56:34.234Z Has data issue: false hasContentIssue false
  • English
  • Français

Choosing innovation alliance governance structure: The roles of performance feedback and top management team characteristics

Published online by Cambridge University Press:  03 June 2024

Taoyong Su ,
Yongheng Chen ,
Wei Liu Open the ORCID record for Wei Liu [Opens in a new window]  and
Junzhe Ji
Taoyong Su
Affiliation:
School of Economics and Management, Tongji University, Shanghai, China
Yongheng Chen
Affiliation:
School of Finance and Business, Shanghai Normal University, Shanghai, China
Wei Liu*
Affiliation:
School of Economics and Management, Tongji University, Shanghai, China
Junzhe Ji
Affiliation:
Adam Smith Business School, University of Glasgow, West Quadrangle, Glasgow, UK
*
Corresponding author: Wei Liu; Email: weiwl@tongji.edu.cn
Get access Rights & Permissions [Opens in a new window]

Abstract

While the importance of innovation alliance for high-technological firms is well-documented, existing literature provides little guidance on the role of performance feedback in an alliance governance structure choice. Drawing on performance feedback theory, this study sheds light on the association between performance deviating (either above or below) from firms’ social aspirations and the governance structure choice of innovation alliances. Using an unbalanced panel of Chinese biopharmaceutical firms spanning from 2007 to 2020, we find that firms experiencing negative performance feedback prefer a non-equity innovation alliance structure, whereas those with positive performance feedback are more likely to adopt an equity one. The strength of these relationships is contingent on top management team average tenure and educational-level diversity. Our findings both provide theoretical and practical insights into guiding how firms under different states of performance feedback select alliance governance structures.

Keywords

performance feedbackinnovation alliance governance structureequity and non-equityTMT tenureTMT educational-level diversity

Information

Type
Research Article
Information
Journal of Management & Organization , Volume 31 , Issue 2 , March 2025 , pp. 602 - 624
Copyright
© The Author(s), 2024. Published by Cambridge University Press in association with Australian and New Zealand Academy of Management.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Article purchase

Temporarily unavailable

References

Alexy, O., Bascavusoglu-Moreau, E., & Salter, A. J. (2016). Toward an aspiration-level theory of open innovation. Industrial and Corporate Change, 25(2), 289–306.10.1093/icc/dtw003CrossRefGoogle Scholar
Argote, L., & Greve, H. R. (2007). A behavioral theory of the firm—40 years and counting: Introduction and impact. Organization Science, 18(3), 337–349.10.1287/orsc.1070.0280CrossRefGoogle Scholar
Audia, P. G., & Greve, H. R. (2006). Less likely to fail: Low performance, firm size, and factory expansion in the shipbuilding industry. Management Science, 52(1), 83–94.CrossRefGoogle Scholar
Bagherzadeh, M., Gurca, A., & Brunswicker, S. (2019). Problem types and open innovation governance modes: A project-level empirical exploration. IEEE Transactions on Engineering Management, 69(2), 287–301.10.1109/TEM.2019.2942132CrossRefGoogle Scholar
Barkema, H. G., & Shvyrkov, O. (2007). Does top management team diversity promote or hamper foreign expansion? Strategic Management Journal, 28(7), 663–680.10.1002/smj.604CrossRefGoogle Scholar
Baum, J. A. C., & Dahlin, K. B. (2007). Aspiration performance and railroads’ patterns of learning from train wrecks and crashes. Organization Science, 18(3), 368–385.10.1287/orsc.1060.0239CrossRefGoogle Scholar
Baum, J. A. C., Rowley, T. J., Shipilov, A. V., & Chuang, Y. T. (2005). Dancing with strangers: Aspiration performance and the search for underwriting syndicate partners. Administrative Science Quarterly, 50(4), 536–575.10.2189/asqu.50.4.536CrossRefGoogle Scholar
Beckman, C. M., & Lee, H. J. (2017). Social comparison and learning from others. In Argote, L. & Levine, J. (Eds.), Oxford handbook of group and organizational learning. Oxford: Oxford University Press.Google Scholar
Beers, C., & Zand, F. (2014). R&D cooperation, partner diversity, and innovation performance: An empirical analysis. Journal of Product Innovation Management, 31(2), 292–312.10.1111/jpim.12096CrossRefGoogle Scholar
Blau, P. M. (1977). Inequality and heterogeneity. New York: Free Press.Google Scholar
Blettner, D., Kotiloglu, S., & Lechler, T. G. (2023). Self‐assessment versus self‐improvement motives: How does social reference group selection influence organizational responses to performance feedback? British Journal of Management, 34(4), 2312–2333.CrossRefGoogle Scholar
Bosse, D. A., & Alvarez, S. A. (2010). Bargaining power in alliance governance negotiations: Evidence from the biotechnology industry. Technovation, 30(5–6), 367–375.CrossRefGoogle Scholar
Carpenter, M. A. (2002). The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance. Strategic Management Journal, 23(3), 275–284.10.1002/smj.226CrossRefGoogle Scholar
Cheng, L. L., Xie, E., Fang, J. Y., & Mei, N. (2022). Performance feedback and firms’ relative strategic emphasis: The moderating effects of board independence and media coverage. Journal of Business Research, 139, 218–231.10.1016/j.jbusres.2021.09.021CrossRefGoogle Scholar
Chen, H. L., Hsu, W. T., & Huang, Y. S. (2010). Top management team characteristics, R&D investment and capital structure in the IT industry. Small Business Economics, 35(3), 319–333.10.1007/s11187-008-9166-2CrossRefGoogle Scholar
Chen, W. R., & Miller, K. D. (2007). Situational and institutional determinants of firms’ R&D search intensity. Strategic Management Journal, 28(4), 369–381.10.1002/smj.594CrossRefGoogle Scholar
Chen, H., Zeng, S., Lin, H., & Ma, H. (2017). Munificence, dynamism, and complexity: How industry context drives corporate sustainability. Business Strategy and the Environment, 26(2), 125–141.10.1002/bse.1902CrossRefGoogle Scholar
Choi, J., & Contractor, F. J. (2016). Choosing an appropriate alliance governance mode: The role of institutional, cultural and geographical distance in international research & development (R&D) collaborations. Journal of International Business Studies, 47(2), 210–232.10.1057/jibs.2015.28CrossRefGoogle Scholar
Choi, J., Rhee, M., & Kim, Y. C. (2019). Performance feedback and problemistic search: The moderating effects of managerial and board outsiderness. Journal of Business Research, 102, 21–33.10.1016/j.jbusres.2019.04.039CrossRefGoogle Scholar
Colombo, M. G. (2003). Alliance form: A test of the contractual and competence perspectives. Strategic Management Journal, 24(12), 1209–1229.10.1002/smj.353CrossRefGoogle Scholar
Coombs, J. E., Bierly, P. E., & Gallagher, S. (2012). The impact of different forms of IPO firm legitimacy on the choice of alliance governance structure. Journal of Management & Organization, 18(4), 516–536.CrossRefGoogle Scholar
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Martino Fine Books.Google Scholar
Das, T. K., & Rahman, N. (2010). Determinants of partner opportunism in strategic alliances: A conceptual framework. Journal of Business and Psychology, 25(1), 55–74.10.1007/s10869-009-9132-2CrossRefGoogle Scholar
D’Aveni, R. A. (1990). Top managerial prestige and organizational bankruptcy. Organization Science, 1(2), 121–142.10.1287/orsc.1.2.121CrossRefGoogle Scholar
Delerue, H. (2018). Shadow of joint patents: Intellectual property rights sharing by SMEs in contractual R&D alliances. Journal of Business Research, 87, 12–23.10.1016/j.jbusres.2018.02.002CrossRefGoogle Scholar
Desai, V. M. (2013). Learning to behave badly: Performance feedback and illegal organizational action. Industrial and Corporate Change, 23(5), 1327–1355.CrossRefGoogle Scholar
Díaz-Fernández, M. C., González-Rodríguez, M. R., & Simonetti, B. (2016). The role played by job and non-job-related TMT diversity traits on firm performance and strategic change. Management Decision, 54(5), 1110–1139.10.1108/MD-10-2015-0464CrossRefGoogle Scholar
Dollinger, M. J., & Golden, P. A. (1992). Interorganizational and collective strategies in small firms: Environmental effects and performance. Journal of Management, 18(4), 695–715.10.1177/014920639201800406CrossRefGoogle Scholar
Dong, J. Q. (2021). Technological choices under uncertainty: Does organizational aspiration matter? Strategic Management Journal, 42(5), 898–916.10.1002/smj.3253CrossRefGoogle Scholar
Felin, T., & Zenger, T. R. (2014). Closed or open innovation? Problem solving and the governance choice. Research Policy, 43(5), 914–925.10.1016/j.respol.2013.09.006CrossRefGoogle Scholar
Fernald, K., Pennings, E., & Claassen, E. (2015). Biotechnology commercialization strategies: Risk and return in interfirm cooperation. Journal of Product Innovation Management, 32(6), 971–996.10.1111/jpim.12218CrossRefGoogle Scholar
Furlotti, M., & Soda, G. (2018). Fit for the task: Complementarity, asymmetry, and partner selection in alliances. Organization Science, 29(5), 837–854.10.1287/orsc.2018.1205CrossRefGoogle Scholar
Gavetti, G., Greve, H. R., Levinthal, D. A., & Ocasio, W. (2012). The behavioral theory of the firm: Assessment and prospects. Academy of Management Annals, 6(1), 1–40.10.5465/19416520.2012.656841CrossRefGoogle Scholar
Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46(6), 685–702.10.2307/30040661CrossRefGoogle Scholar
Howell, S. T. (2018). Joint ventures and technology adoption: A Chinese industrial policy that backfired. Research Policy, 47(8), 1448–1462.10.1016/j.respol.2018.04.021CrossRefGoogle Scholar
Hu, S., Blettner, D., & Bettis, R. A. (2011). Adaptive aspirations: Performance consequences of risk preferences at extremes and alternative reference groups. Strategic Management, 32(13), 1426–1436.10.1002/smj.960CrossRefGoogle Scholar
Jeppesen, L. B., & Lakhani, K. R. (2010). Marginality and problem-solving effectiveness in broadcast search. Organization Science, 21(5), 1016–1033.10.1287/orsc.1090.0491CrossRefGoogle Scholar
Jordan, A. H., & Audia, P. G. (2012). Self-enhancement and learning from performance feedback. Academy of Management Review, 37(2), 211–231.10.5465/amr.2010.0108CrossRefGoogle Scholar
Kacperczyk, A., Beckman, C. M., & Moliterno, T. P. (2015). Disentangling risk and change: Internal and external social comparison in the mutual fund industry. Administrative Science Quarterly, 60(2), 228–262.CrossRefGoogle Scholar
Kafouros, M., Wang, C. Q., Piperopoulos, P., & Zhang, M. S. (2015). Academic collaborations and firm innovation performance in China: The role of region-specific institutions. Research Policy, 44(3), 803–817.10.1016/j.respol.2014.11.002CrossRefGoogle Scholar
Kale, P., & Singh, H. (2009). Managing strategic alliances: What do we know now, and where do we go from here? Academy of Management Perspectives, 23(3), 45–62.Google Scholar
Kang, J. H. (2007). The usefulness and uselessness of the decomposition of Tobit coefficients. Sociological Methods & Research, 35(4), 572–582.10.1177/0049124106292359CrossRefGoogle Scholar
Karaca‐Mandic, P., Norton, E. C., & Dowd, B. (2012). Interaction terms in nonlinear models. Health Services Research, 47(1), 255–274.10.1111/j.1475-6773.2011.01314.xCrossRefGoogle ScholarPubMed
Kavusan, K., & Frankort, H. T. W. (2019). A behavioral theory of alliance portfolio reconfiguration: Evidence from pharmaceutical biotechnology. Strategic Management Journal, 40(10), 1668–1702.10.1002/smj.3041CrossRefGoogle Scholar
Kc, D., Staats, B. R., & Gino, F. (2013). Learning from my success and from others’ failure: Evidence from minimally invasive cardiac surgery. Management Science, 59(11), 2435–2449.10.1287/mnsc.2013.1720CrossRefGoogle Scholar
Kim, J. Y., Finkelstein, S., & Haleblian, J. (2015). All aspirations are not created equal: The differential effects of historical and social aspirations on acquisition behavior. Academy of Management Journal, 58(5), 1361–1388.10.5465/amj.2012.1102CrossRefGoogle ScholarPubMed
Kim, E., & Rhee, M. (2017). How airlines learn from airline accidents: An empirical study of how attributed errors and performance feedback affect learning from failure. Journal of Air Transport Management, 58, 135–143.10.1016/j.jairtraman.2016.10.007CrossRefGoogle Scholar
Kolev, K. D., & McNamara, G. (2022). The role of top management teams in firm responses to performance shortfalls. Strategic Organization, 20(3), 541–564.10.1177/1476127020962683CrossRefGoogle Scholar
Kotiloglu, S., Chen, Y., & Lechler, T. (2021). Organizational responses to performance feedback: A meta-analytic review. Strategic Organization, 19(2), 285–311.10.1177/1476127019883361CrossRefGoogle Scholar
Lee, Y., & Cavusgil, S. T. (2006). Enhancing alliance performance: The effects of contractual-based versus relational-based governance. Journal of Business Research, 59(8), 896–905.10.1016/j.jbusres.2006.03.003CrossRefGoogle Scholar
Lee, J., Hoetker, G., & Qualls, W. (2015). Alliance experience and governance flexibility. Organization Science, 26(5), 1536–1551.10.1287/orsc.2015.0989CrossRefGoogle Scholar
Levinthal, D. A., & Rerup, C. (2021). The plural of goal: Learning in a world of ambiguity. Organization Science, 32(3), 527–543.10.1287/orsc.2020.1383CrossRefGoogle Scholar
Li, K., Qiu, J., & Wang, J. (2019). Technology conglomeration, strategic alliances, and corporate innovation. Management Science, 65(11), 5065–5090.10.1287/mnsc.2018.3085CrossRefGoogle Scholar
Liu, K., Li, J., Hesterly, W., & Cannella, A., Jr (2012). Top management team tenure and technological inventions at post-IPO biotechnology firms. Journal of Business Research, 65(9), 1349–1356.10.1016/j.jbusres.2011.09.024CrossRefGoogle Scholar
Lo, F. Y., & Fu, P. H. (2016). The interaction of chief executive officer and top management team on organization performance. Journal of Business Research, 69(6), 2182–2186.10.1016/j.jbusres.2015.12.027CrossRefGoogle Scholar
Lohrke, F. T., Kreiser, P. M., & Weaver, K. M. (2006). The influence of current firm performance on future SME alliance formation intentions: A six-country study. Journal of Business Research, 59(1), 19–27.10.1016/j.jbusres.2005.02.002CrossRefGoogle Scholar
Lu, C., Liu, Z., Xu, Y., Liao, S., & Fu, L. (2022). How TMT diversity influences open innovation: An empirical study on biopharmaceutical firms in China. Technology Analysis & Strategic Management, 34(2), 151–165.10.1080/09537325.2021.1892056CrossRefGoogle Scholar
Lv, D. D., Zhu, H., Chen, W., & Lan, H. (2021). Negative performance feedback and firm cooperation: How multiple upward social comparisons affect firm cooperative R&D. Journal of Business Research, 132, 872–883.Google Scholar
Majchrzak, A., Jarvenpaa, S. L., & Bagherzadeh, M. (2015). A review of interorganizational collaboration dynamics. Journal of Management, 41(5), 1338–1360.10.1177/0149206314563399CrossRefGoogle Scholar
Majocchi, A., Mayrhofer, U., & Camps, J. (2013). Joint ventures or non‐equity alliances? Evidence from Italian firms. Management Decision, 51(2), 380–395.10.1108/00251741311301876CrossRefGoogle Scholar
Martinez-Noya, A., & Garcia-Canal, E. (2021). Innovation performance feedback and technological alliance portfolio diversity: The moderating role of firms’ R&D intensity. Research Policy, 50(9), .10.1016/j.respol.2021.104321CrossRefGoogle Scholar
McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2), 595–612.10.1016/0304-405X(90)90069-CCrossRefGoogle Scholar
McDonald, J. F., & Moffitt, R. A. (1980). The uses of Tobit analysis. Review of Economics and Statistics, 62(2), 318–321.10.2307/1924766CrossRefGoogle Scholar
Michelino, F., Cammarano, A., Lamberti, E., & Caputo, M. (2015). Knowledge domains, technological strategies and open innovation. Journal of Technology Management & Innovation, 10(2), 50–78.Google Scholar
Miller, D. (1991). Stale in the saddle-CEO tenure and the match between organization and environment. Management Science, 37(1), 34–52.10.1287/mnsc.37.1.34CrossRefGoogle Scholar
Mindruta, D., Moeen, M., & Agarwal, R. (2016). A two‐sided matching approach for partner selection and assessing complementarities in partners’ attributes in inter‐firm alliances. Strategic Management Journal, 37(1), 206–231.10.1002/smj.2448CrossRefGoogle Scholar
Naranjo-Gil, D. (2009). Management information systems and strategic performances: The role of top team composition. International Journal of Information Management, 29(2), 104–110.10.1016/j.ijinfomgt.2008.05.009CrossRefGoogle Scholar
Niesten, E., & Jolink, A. (2017). Alliance governance choices: Disentangling the effects of uncertainty and alliance experience. Long Range Planning, 51(2), 320–333.10.1016/j.lrp.2017.07.004CrossRefGoogle Scholar
Oxley, J., & Wada, T. (2009). Alliance structure and the scope of knowledge transfer: Evidence from US-Japan agreements. Management Science, 55(4), 635–649.10.1287/mnsc.1080.0968CrossRefGoogle Scholar
Phene, A., & Tallman, S. (2012). Complexity, context and governance in biotechnology alliances. Journal of International Business Studies, 43(1), 61–83.CrossRefGoogle Scholar
Poppo, L., & Zenger, T. (1998). Testing alternative theories of the firm: Transaction cost, knowledge-based, and measurement explanations for make-or-buy decision in information services. Strategic Management Journal, 19(9), 853–877.10.1002/(SICI)1097-0266(199809)19:9<853::AID-SMJ977>3.0.CO;2-B3.0.CO;2-B>CrossRefGoogle Scholar
Ref, O., & Shapira, Z. (2017). Entering new markets: The effect of performance feedback near aspiration and well below and above it. Strategic Management Journal, 38(7), 1416–1434.10.1002/smj.2561CrossRefGoogle Scholar
Reuer, J. J., Arino, A., Poppo, L., & Zenger, T. (2016). Alliance governance. Strategic Management Journal, 37(13), E37–E44.10.1002/smj.2535CrossRefGoogle Scholar
Rosenkopf, L., & Almeida, P. (2003). Overcoming local search through alliances and mobility. Management Science, 49(6), 751–766.10.1287/mnsc.49.6.751.16026CrossRefGoogle Scholar
Sampson, R. C. (2004). The cost of misaligned governance in R&D alliances. Journal of Law, Economics, & Organization, 20(2), 484–526.10.1093/jleo/ewh043CrossRefGoogle Scholar
Sampson, R. C. (2007). R&D alliances and firm performance: The impact of technological diversity and alliance organization on innovation. Academy of Management Journal, 50(2), 364–386.10.5465/amj.2007.24634443CrossRefGoogle Scholar
Schreiner, M., Kale, P., & Corsten, D. (2009). What really is alliance management capability and how does it impact alliance outcomes and success? Strategic Management Journal, 30(13), 1395–1419.10.1002/smj.790CrossRefGoogle Scholar
Shipilov, A. V., Li, S. X., & Greve, H. R. (2011). The prince and the pauper: Search and brokerage in the initiation of status-heterophilous ties. Organization Science, 22(6), 1418–1434.10.1287/orsc.1100.0594CrossRefGoogle Scholar
Simsek, Z. (2007). CEO tenure and organizational performance: An intervening model. Strategic Management Journal, 28(6), 653–662.10.1002/smj.599CrossRefGoogle Scholar
Su, T., Yu, Y., Chen, Y., & Hou, W. (2023). On or off: The triggering effect of underperformance duration on cooperative innovation. Technovation, 126, .10.1016/j.technovation.2023.102817CrossRefGoogle Scholar
Tyler, B. B., & Caner, T. (2016). New product introductions below aspirations, slack and R&D alliances: A behavioral perspective. Strategic Management Journal, 37(5), 896–910.10.1002/smj.2367CrossRefGoogle Scholar
Vrande, V., Vanhaverbeke, W., & Duysters, G. (2009). External technology sourcing: The effect of uncertainty on governance mode choice. Journal of Business Venturing, 24(1), 62–80.10.1016/j.jbusvent.2007.10.001CrossRefGoogle Scholar
Williamson, O. E. (2008). Outsourcing: Transaction cost economics and supply chain management. Journal of Supply Chain Management, 44(2), 5–16.10.1111/j.1745-493X.2008.00051.xCrossRefGoogle Scholar
Xu, D., Zhou, K. Z., & Du, F. (2019). Deviant versus aspirational risk taking: The effects of performance feedback on bribery expenditure and R&D intensity. Academy of Management Journal, 62(4), 1226–1251.10.5465/amj.2016.0749CrossRefGoogle Scholar
Yang, H., Wang, W., Lyu, C., & Yang, J. (2023). Effect of equity and non-equity cooperation on firm product and process innovation: The moderating role of absorptive capacity. Technology Analysis & Strategic Management 35 (5), 599–612.CrossRefGoogle Scholar
Ye, Y., Yu, W., & Nason, R. (2021). Performance feedback persistence: Comparative effects of historical versus peer performance feedback on innovative search. Journal of Management, 47(4), 1053–1081.10.1177/0149206320916225CrossRefGoogle Scholar
Yu, W., Minniti, M., & Nason, R. (2019). Underperformance duration and innovative search: Evidence from the high‐tech manufacturing industry. Strategic Management Journal, 40(5), 836–861.10.1002/smj.2988CrossRefGoogle Scholar
Zhang, J., Baden-Fuller, C., & Mangematin, V. (2007). Technological knowledge base, R&D organization structure and alliance formation: Evidence from the biopharmaceutical industry. Research Policy, 36(4), 515–528.10.1016/j.respol.2007.02.015CrossRefGoogle Scholar
Supplementary material: File

Su et al. supplementary material

Su et al. supplementary material
Download Su et al. supplementary material(File)
File 39.7 KB