The effect of performance feedback on strategic alliance formation and R&D intensity

Sangyun Han

European Management Journal, 2023, vol. 41, issue 5, 709-719

Abstract: This study explores whether performance feedback influences firms to form a strategic alliance or engage in R&D, both of which are risk-taking activities. Based on the behavioral theory of the firm and the resource-based view, this study shows that both low- and high-performing firms may engage in risk-taking activities by forming a strategic alliance or engaging in R&D as an organizational response to performance feedback. That is, low-performing firms are more likely to address underperformance in the short term – to solve the immediate performance problem – by forming a strategic alliance, whereas high-performing firms, which have slack resources to sustain their competitive advantage in the long run, will more likely engage in R&D activity over the long term. In addition, the moderating effect of two boundary conditions — government R&D investment and the level of industry competition — are examined to understand the relationship between performance feedback and organizational responses. The results show that as a firm's financial performance falls below its aspiration level, it has a higher probability of forming a strategic alliance. However, as a firm's performance rises above its aspiration level, it has greater R&D intensity. Government R&D investment and industry competition moderate the relationship between the firm's performance feedback and its risk-taking behavior. This research extends recent studies to further explore the effect of performance feedback on firms' strategic decision-making based on their performance feedback.

Keywords: Performance feedback; Strategic alliance; R&D intensity; Behavioral theory of the firm; Problemistic search (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0263237322000561
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eurman:v:41:y:2023:i:5:p:709-719

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/115/bibliographic
http://www.elsevier. ... me/115/bibliographic

DOI: 10.1016/j.emj.2022.03.010

Access Statistics for this article

European Management Journal is currently edited by Michael Haenlein

More articles in European Management Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().