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Managing dynamics through robust alliance governance structures: The case of KLM and Northwest Airlines

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  • de Man, Ard-Pieter
  • Roijakkers, Nadine
  • de Graauw, Henk

Abstract

Summary As alliances are mainly used in dynamic industries, extant theory assumes that alliance governance structures undergo frequent changes. This article aims to show, however, that some governance structures are more robust in dealing with internal and external dynamics than others. We develop propositions about the characteristics that need to be built into an alliance for it to be robust. These propositions are grounded in a case study of the KLM-Northwest alliance. After frequent changes in the governance structure of their alliance, KLM and Northwest found a model that has withstood turbulence in the airline industry for over a decade. This model, the virtual joint venture, has among others as a key characteristic a fifty-fifty profit sharing arrangement.

Suggested Citation

  • de Man, Ard-Pieter & Roijakkers, Nadine & de Graauw, Henk, 2010. "Managing dynamics through robust alliance governance structures: The case of KLM and Northwest Airlines," European Management Journal, Elsevier, vol. 28(3), pages 171-181, June.
    • Handle: RePEc:eee:eurman:v:28:y:2010:i:3:p:171-181
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    Citations

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    Cited by:

    1. Casanueva, Cristóbal & Gallego, Ángeles & Sancho, María, 2013. "Network resources and social capital in airline alliance portfolios," Tourism Management, Elsevier, vol. 36(C), pages 441-453.
    2. Reuer, Jeffrey & Devarakonda, S.V., 2015. "Mechanisms of hybrid governance : Administrative committees in non-equity alliances," Other publications TiSEM 063d9ccc-59c8-4e76-a77d-8, Tilburg University, School of Economics and Management.
    3. Casanueva, Cristóbal & Gallego, Ángeles & Castro, Ignacio & Sancho, María, 2014. "Airline alliances: Mobilizing network resources," Tourism Management, Elsevier, vol. 44(C), pages 88-98.
    4. Börjeson, Love, 2015. "Interorganizational situations – An explorative typology," European Management Journal, Elsevier, vol. 33(3), pages 191-200.
    5. Morgan, Ashlee & Taylor, Tracy & Adair, Daryl, 2020. "Sport event sponsorship management from the sponsee’s perspective," Sport Management Review, Elsevier, vol. 23(5), pages 838-851.
    6. Cobeña, Mar & Gallego, Ángeles & Casanueva, Cristóbal, 2017. "Heterogeneity, diversity and complementarity in alliance portfolios," European Management Journal, Elsevier, vol. 35(4), pages 464-476.
    7. Choi, Young Rok & Phan, Phillip H. & Choi, Jaepil, 2020. "Formal governance, interfirm coordination, and performance in partnerships: An empirical investigation of a mediation model," European Management Journal, Elsevier, vol. 38(3), pages 413-424.
    8. Castiglioni, Marco & Gallego, à ngeles & Galán, José Luis, 2018. "The virtualization of the airline industry: A strategic process," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 134-145.
    9. Agostini, Lara & Filippini, Roberto & Nosella, Anna, 2015. "Management and performance of strategic multipartner SME networks," International Journal of Production Economics, Elsevier, vol. 169(C), pages 376-390.

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