Managing Governance Adaptations in Strategic Alliances

One important question confronting firms engaged in a strategic alliance is how to adapt the relationship over time. This article identifies specific governance changes firms make in strategic alliances. Using illustrative data on strategic alliances in the biotechnology industry, the authors consider the frequency of governance adaptations and explore some of the factors affecting parent firms’ interventions in their collaborative agreements. The data patterns demonstrate the relevance of parent firms’ prior experiences with alliances as well as specific features of the alliance in influencing the likelihood and type of adjustments undertaken by parent firms. While alliance adaptation has previously been a black box in the alliance area, the article begins to specify some of the dimensions of alliance adaptation and their drivers.