Regulatory Focus and Opportunism in the Alliance Development Process

Abstract

The authors examine the motivational determinants of interfirm alliance behavior through the sociocognitive principle of regulatory focus, with particular reference to the role of opportunism at the formation, operation, and outcome stages of alliance development. Regulatory focus pertains to whether an organization engages with the external world to achieve positive outcomes (promotion focus) or to avoid negative outcomes (prevention focus). The authors believe that the motivational orientations of the alliancing firms play key roles in shaping tolerance for opportunism, and they argue, broadly, that alliance firms with a promotion regulatory focus will be more tolerant of their partners’ opportunistic behavior than alliance firms with a prevention regulatory focus. Propositions are developed regarding the linkages between the regulatory focus of an alliance firm and its sensitivity to partner opportunism in the different stages of alliance development. The authors discuss further research directions and the managerial implications of their analysis.