Interplay between Cognition and Design: How Performance of Strategic Alliance with Different Design Affected by Cognitive Capabilities

Abstract

While extant literature has shown that formal contracts and relational governance are at play in strategic alliances design, surprisingly little is known about the prerequisites of administration within these organisational structures to reach to their potential benefits. Alliances' administration needs not only functional but also cognitive capabilities. To deeper understand of relationship between managerial cognition and alliance design, current study was employed the concept of cognitive capability and relationships between psychological underpinnings of cognitive capability and performance of alliances with contractual or relational design were studied. Using OLS regression analysis, the empirical models comprised of perception, attention, problem-solving, communication and social cognition are designed to explain the role of cognitive capability in performance of strategic alliances with contractual and relational designs. Results provide a clear understanding of the importance of cognitive capability in alliances' design and show how these psychological underpinnings fuel alliances' performance in contractual and relational governance's.