Environmental turmoil and firms’ core structure dynamism

the moderating role of strategic alliances

Rui Xue, Gongming Qian, Zhengming Qian, Lee Li

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Purpose
Much of the extant evidence in the marketing literature posits that firms use strategic alliances to share resources, costs and risks as paths to performance improvements. Drawing from the organizational ecology theory, this study aims to propose a different rationale, namely, that strategic alliances protect a firm’s core structure – its stated goals, authority structure, core technologies and marketing strategies – by mitigating the need for hazardous changes in hostile environments.

Design/methodology/approach
This study collected quantitative data using market survey and analyzed the data with the regression method.

Findings
Using Chinese firms in three technology industries as the research setting, this research finds a positive and significant relationship between environmental hostility and core structure dynamism. Although strategic alliances themselves have no direct bearing on core structure dynamism, they are found to moderate this relationship negatively, that is, strategic alliances attenuate the relationship between environmental hostility and structural changes.

Research limitations/implications
This paper argues that strategic alliances have significant moderating effects on firm performance, that is, firms use strategic alliances to outsource competence to partners and, thus, avoid internal turmoil. However, the moderating effect alone cannot explain the complexity of strategic alliances. There could exist other effects that remain unknown. In addition, individual-level factors could have significant impacts on strategic alliance management. Future studies should look into these issues to advance the authors’ knowledge on strategic alliances.

Practical implications
The findings of this study show that managers should outsource competence to partners when they experience turmoil in markets. Adapting to market turmoil internally could lead to market failure.

Originality/value
This study provides a new rationale for strategic alliances, that is, firms use strategic alliances to reduce market uncertainty. This rationale has not been reported in the existing literature.
Original languageEnglish
Pages (from-to)1619-1638
Number of pages20
JournalJournal of Business and Industrial Marketing
Volume34
Issue number7
Early online date8 Jul 2019
DOIs
Publication statusPublished - 5 Aug 2019
Externally publishedYes

Keywords

  • Core structure dynamism
  • Environmental turmoil
  • Strategic alliances

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