Alliance Dynamics through Real Options: The Case of an Alliance between Competing Pharmaceutical Companies

Céline Bérard () and Marie Perez ()
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Céline Bérard: COACTIS - COnception de l'ACTIon en Situation - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne, UL2 - Université Lumière - Lyon 2
Marie Perez: CEROS - Centre d'Etudes et de Recherches sur les Organisations et la Stratégie - UPN - Université Paris Nanterre

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Abstract: This paper aims to better understand the dynamic aspects of strategic alliances between competitors, by relying on both the real options approach and the system dynamics approach. It raises the following question: what are the behavioral dynamics of real options in alliances? The systemic qualitative model we built from the study of an alliance formed by two competing firms around an R&D project revealed three sets of feedback structures (the "expected flexibility", "uncertainty" and "collaborative skills and knowledge" dynamics), in which are embedded three types of real growth options (that is, unexpected discovery, relational reputation and interactive options). While previous studies have often focused on how partners unilaterally manage real options to reduce uncertainty, our study allowed us to identify the real options created by the alliance, which can be exploited collectively, independently by each partner or not at all, and to capture their dynamic aspects.

Keywords: Alliances; Real options; System dynamics; Influence diagram; Pharmaceutical project (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://hal.science/hal-04010373
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Citations: View citations in EconPapers (2)

Published in European Management Journal, 2014, 32 (2), pp.337-349

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04010373

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