Introduction
The theoretical work contributed to the relation between companies within a business alliance has established the most general aspect of the structural and the relational perspectives of such collaborations. This paper addresses the analysis of the article “Towards an Integrative Perspective on Alliance Governance” by Dries Faems et al. in regards to the article’s developed perspective on alliance governance.
Key Arguments
The main idea of the article is outlining that previous studies in regards of the forming alliances propose limited perspective of a successful collaboration. The case study provided within the article emphasizes this assumption by demonstrating that the structural and relational aspects within a transaction provide difficulties in companies’ business partnership when approached separately. By showing an example of two alliances of the same companies with different relational and structural approaches, the article emphasizes the mistakes and the efficiency decline resulted from maintaining both approaches independently and without proper integration. In that sense, the article states that “structural and relational aspects are inherently linked and mutually influence each other, both within and between transactions “ (Faems et al. 2008, p. 43). Based on the concluded statement, the article provided a conceptual framework model based on which the relation between each aspect were analyzed to establish the degree of influence on the business process within the alliance.
Theoretical Contribution
The findings presented in the article can imply a new theoretical perspective on the way the application of structural elements could be connected to relational processes. Regarding the connection between structural design and relational dynamics within the transaction the article states that trust dynamics based on contracts with similar degree of contractual formalization, depends on “on the extent to which the nature of contractual formalization reflects the nature of the alliance activities” (Faems et al. 2008, p. 39) In that model the article contracts are governance mechanism, whereas goodwill trust is merely a condition that determines the way these contracts are applied. In regards to the connection between structural design and relational dynamics within the transaction, the article argues that mutual interdependence and competence trust could be “more important conditions for the continuation of interfirm relationships over multiple transactions than goodwill trust.” (Faems et al. 2008, p. 43).
Article’s Relation to Studied Concepts
As one of the most important outcomes of the course is the evaluation of theories and concepts in the field of international alliances, this article is beneficial in two ways. First of all, it provides and intensive overview of the related literature that demonstrate the points of intersection on the issue of structural and relational processes. Additionally, the article provides practical examples that demonstrate real life issues within the alliance and the way theories could be applied in regard of those issues. This article is specifically related to the theoretical perspective subject, in a way that it demonstrates the aspects that should be paid attention when indicating the need for further research on a theory that is limited or no longer comply with the current trends in the business. The way the article conducted its research questions and the subsequent recommendations, it could be implied that implementing theories would require also creative approach in issues that do not fit within the selected theory. In that sense, the case of goodwill trust as condition for further collaboration in forming another alliance proved to be exemplary, where despite negative goodwill trust dynamics the alliance was notwithstanding formed again.
Works Cited
Faems, D & Janssens, M (2008) Towards an Integrative Perspective on Alliance Governance: Connecting Contract Design, Trust Dynamics, and Contract Application. The Academy of Management. 51 (6)