Choice and performance of governance mechanisms: matching alliance governance to asset type
Article first published online: 14 APR 2009
Copyright © 2009 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 30, Issue 10, pages 1025–1044, October 2009
How to Cite
Hoetker, G. and Mellewigt, T. (2009), Choice and performance of governance mechanisms: matching alliance governance to asset type. Strat. Mgmt. J., 30: 1025–1044. doi: 10.1002/smj.775
- Issue published online: 13 AUG 2009
- Article first published online: 14 APR 2009
- Manuscript Revised: 10 MAR 2009
- Manuscript Received: 8 SEP 2005
- relational governance;
- formal governance;
- telecommunications industry
Formal and relational governance mechanisms are used in strategic alliances to coordinate resources and mitigate the risk of opportunistic behavior. While recent work has shown that these approaches are not mutually exclusive, we understand little about when one approach is superior to the other. Using data on the governance choices and subsequent performance of alliances in the German telecommunications industry, we find that the optimal configuration of formal and relational governance mechanisms depends on the assets involved in an alliance, with formal mechanisms best suited to property-based assets and relational governance best suited to knowledge-based assets. Furthermore, a mismatch between governance mechanisms and asset type can harm the performance of the alliance. Our findings contribute to transaction cost economics, the literature on relational governance, and recent work studying their interaction. Copyright © 2009 John Wiley & Sons, Ltd.