Governing Explorative R&D Alliances: Searching for Effective Strategies

Dries Faems (), Maddy Janssens (), René Bouwen () and Bart Van Looy ()
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Dries Faems: Katholieke Universiteit Leuven, Faculty of Economics and Applied Economics
Maddy Janssens: Katholieke Universiteit Leuven, Faculty of Economics and Applied Economics
René Bouwen: Katholieke Universiteit Leuven, Faculty of Psychology and Educational Sciences
Bart Van Looy: Katholieke Universiteit Leuven, Faculty of Economics and Applied Economics

management revue. Socio-economic Studies, 2006, vol. 17, issue 1, 9-29

Abstract: Although firms increasingly rely on interfirm collaboration to explore new technological opportunities, few studies have examined the ways in which this collaboration form is governed. In this paper, we attempt to increase our understanding of governing explorative R&D alliances. First, we argue that explorative R&D alliances are likely to face substantial risks of opportunistic behavior and high coordination costs. Second, applying insights from the alliance literature, we identify formal governance mechanisms as effective tools to mitigate the risk of opportunistic behavior as well as coordination costs. However, relying on insights from the new product development literature, we argue that such formal governance mechanisms may hamper exploring new technological opportunities. Third, we propose and develop alternative strategies, facilitating the governance of explorative R&D alliances: 1) relying on embedded relationships in which heterogeneity is maintained and 2) balancing formal and relational governance. To conclude, we emphasize the importance of longitudinal, multi-level research to study the characteristics and dynamics of different governance mechanisms within interfirm collaboration.

Keywords: Alliances; Exploration; Formal Governance; Relational Governance (search for similar items in EconPapers)
JEL-codes: F23 J53 M10 (search for similar items in EconPapers)
Date: 2006
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