Greener pastures

Outside options and strategic alliance withdrawal

Henrich R. Greve, Hitoshi Mitsuhashi, Joel A C Baum

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

Departing from prior work that demonstrates the stickiness and stability of alliance networks resulting from embeddedness, we extend matching theory to study firms' withdrawal from alliances. Viewing alliance withdrawal as a result of firms' pursuit of more promising alternative partners (outside options) rather than failures in collaboration, we predict that a firm is more likely to withdraw from an alliance when there is a higher density of outside options that have better match quality than the current partners. We also propose that, because matching is two-sided, outside options have a greater impact on a firm's withdrawal when they are more likely to initiate new alliances. Using data on alliances in the global liner shipping industry, we show that, controlling for internal tensions in the alliance, outside options predict alliance withdrawals. Thus, despite the alliance stickiness and stability, firms alter their alliances in response to the availability of promising outside options, even leaving alliances that appear successful.

Original languageEnglish
Pages (from-to)79-98
Number of pages20
JournalOrganization Science
Volume24
Issue number1
DOIs
Publication statusPublished - 2013 Jan

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Freight transportation
Availability
Industry
Strategic alliances
Outside options
Alliances
Stickiness

Keywords

  • Alliance withdrawal
  • Embeddedness
  • Interorganizational networks
  • Market complementarity
  • Matching theory
  • Rivalry
  • Shipping industry

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Organizational Behavior and Human Resource Management

Cite this

Greener pastures : Outside options and strategic alliance withdrawal. / Greve, Henrich R.; Mitsuhashi, Hitoshi; Baum, Joel A C.

In: Organization Science, Vol. 24, No. 1, 01.2013, p. 79-98.

Research output: Contribution to journalArticle

Greve, Henrich R. ; Mitsuhashi, Hitoshi ; Baum, Joel A C. / Greener pastures : Outside options and strategic alliance withdrawal. In: Organization Science. 2013 ; Vol. 24, No. 1. pp. 79-98.
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