Defining Strategic Collaboration: Antecedents of Explicit Meaning (Re)-Negotiation

Abstract

Creating a shared understanding is essential in strategic alliances. To achieve this shared understanding, alliance partners can formulate explicit meaning by including definitions in their contracts. While explicit definitions reduce interpretive uncertainty, they can also question implicitly held meaning. This paper examines the antecedents of contractual definitions in alliance agreements and argues that partners will more likely resort to explicit definitions when their social and technological repositories overlap because overlaps (1) unleash the capacity for explicit definitions and (2) establish mutual appreciation of explicit definitions. We also argue that when technological uncertainty is high, the influence of social overlap on the inclusion of definitions is stronger, whereas when technological uncertainty is low, the influence of technology overlap is more pertinent. We test our conceptual model using a large panel data set of strategic alliance agreements in the biopharmaceutical industry. Our paper advances the literature on strategic alliances by drawing attention to the hitherto unexplored phenomenon of codified meaning in contracts and linking it to the literature on strategic communication.