Measuring the impact of organizational complexity, planning and control on strategic alliances’ performance

Abstract

PurposeThe purpose of this paper is to analyze three characteristics of strategic alliances in Italy to estimate their influence on financial performance. The authors test how alliance complexity, strategic planning and accounting control influence revenue growth, asset growth and EBITDA margin.Design/methodology/approachThis paper uses contractual and financial data to test hypothesized relationships in structural equation modelling (SEM) using partial least squares (PLSs).FindingsThis paper highlights that the extent of strategic planning positively influences the growth in assets but not in revenue or EBITDA margin. In addition, the findings of this paper support the idea that the complexity in the alliance is significantly related to the quantity of accounting controls within alliance.Originality/valueThis paper improves existing research on the subject, as it contributes to open the black box of alliances’ internal operations by examining the details of 50 Italian contracts to create a multidimensional profile of each alliance.