Governance mode vs. governance fit: Performance implications of make-or-ally choices for product innovation in the worldwide aircraft industry, 1942-2000

Xavier Castañer, Louis Mulotte, Bernard Garrette and Pierre Dussauge ()
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Xavier Castañer: Department of Strategy, Faculty of Business and Economics - UNIL - Université de Lausanne = University of Lausanne
Louis Mulotte: Department of Organization and Strategy - Tilburg University [Netherlands]
Bernard Garrette: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique
Pierre Dussauge: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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Abstract: We examine the impact of governance mode and governance fit on performance in make-or-ally decisions. We argue that while horizontal collaboration and autonomous governance have direct and countervailing performance implications, the alignment of make-or-ally choices with the focal firm's resource endowment and the activity's resource requirements leads to better performance. Data on the aircraft industry show that relative to aircraft developed autonomously, collaborative aircraft exhibit greater sales but require longer time-to-market. However, governance fit increases unit sales and reduces time-to-market. We contribute to the alliance and economic organization literatures.

Keywords: product innovation; horizontal collaboration; autonomous governance; discriminating alignment; endogeneity; aircraft industry (search for similar items in EconPapers)
Date: 2014-09
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Citations: View citations in EconPapers (16)

Published in Strategic Management Journal, 2014, 35 (9), pp.1386-1397. ⟨10.1002/smj.2160⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01066491

DOI: 10.1002/smj.2160

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