Abstract
The analysis found that to share in the gains of a globalizing economy, smaller multinational enterprises find surrogates outside their firm, third party enablers, to help bridge informational structural holes and build multi-nodal social networks that link cross-cultural alliances partners. Using a qualitative case study, propositions for future testing were developed that highlight similarities and differences between large and small firms, the role third parties play with small firms, and how these third-party behaviors co-evolve with the alliance partners. Conceptual and practical issues related to the changing role of third parties are identified and discussed.
Highlights
In an era of rapid globalization and collaboration, the small and medium-sized enterprise (SME) alliance topic is crucial because SMEs are the fastest growing business segment and account for the greatest job growth
Lack of relational trust causes exogenous uncertainty Structural hole exists between Enviro and U.S firm (USFIRM) Jane and Jane contacted her business school friend (Joe) serve as trust-building mediators between Peter (Enviro Representative) and Ralph (USFIRM Representative); relational “investment” is critical because personal connections substitute for mistrust/lack of familiarity
The intent of this research is to address an interesting topic of both theoretical and practical relevance and to add knowledge associated with process research and longitudinal studies, especially in the field of social network evolution and alliance deal making
Summary
In an era of rapid globalization and collaboration, the small and medium-sized enterprise (SME) alliance topic is crucial because SMEs are the fastest growing business segment and account for the greatest job growth. Because much of alliance research is based on transaction cost (Hennart, 1988, Chi 1994, Reuer, Koza and Mitchell, 2000) that is static and focuses on when the alliance organization is a more efficient governance mechanism, this research provides little guidance with regard to the way firms reach decisions to pursue an alliance, identify candidate alliance partners, and determine key relational values that are critical in negotiating and decision making. Alliance formation processes involve difficult to model, dynamic interactions and social dimensions not explicitly tied to economics, i.e., bridging structural holes, making distant alliance parties aware of candidate interest and adhering to procedural fairness – making sure partners perceive that the allocation procedures for decision making rights are fair (Arino & Ring, 2010). “What role do external intermediaries play in establishing and cultivating international alliances among small and medium-sized enterprises?” fits in between, and has potential to contribute to, each of these streams
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