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LITERATURE REVIEW & RELATED HYPOTHESES
Three primary research streams have guided the current research. First, the issue of trust is examined as a critical factor to consider in interorganizational arrangements. Second, resource–based theory is applied to explain the improved performance that comes about from some alliances. Third, a view of knowledge and learning is matched to the benefits of alliances.
Trust and Alliances
Parkhe (1993) describes factors which build
trust in interorganizational arrangements, and elaborates on the
components of trust. The potential value of building trust
comes from the reduction of the costs of longer term exchange
relationships and has been described in the context of
transaction cost economics (Williamson, 1983; Ghoshal &
Moran, 1996).
For the purpose of this paper, the most salient aspect is
Parkhe’s (1993) introduction of the construct of
opportunistic behavior as a factor to consider when analyzing the
performance of alliances. Opportunism is defined as the
pursuit of self interest at the expense of cooperative
endeavor. But there are counter forces which work against
potential opportunistic exploitation by one party or the
other. These are trust, reciprocity, and forbearance.
Positive trust makes such opportunism less likely to occur and
encourages cooperation. Reciprocity, a
“tit–for–tat” retaliatory behavior, creates
costs for opportunistic exploitation. Forbearance involves
declining to behave opportunistically due to trust or to
perceived reciprocity costs. Table One, a hypothetical 3x3
matrix of firm performance when similar firms cooperate, fail to
cooperate, or behave opportunistically, illustrates the impact of
opportunism and trust based cooperation. The numbers
assigned do not have an ordinal meaning, they are used to make
comparisons.
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