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Governance mode vs. governance fit: Performance implications of make-or-ally choices for product innovation in the worldwide aircraft industry, 1942-2000

Author

Listed:
  • Xavier Castañer

    (Department of Strategy, Faculty of Business and Economics - UNIL - Université de Lausanne = University of Lausanne)

  • Louis Mulotte

    (Department of Organization and Strategy - Tilburg University [Netherlands])

  • Bernard Garrette

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Dussauge

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

Abstract

We examine the impact of governance mode and governance fit on performance in make-or-ally decisions. We argue that while horizontal collaboration and autonomous governance have direct and countervailing performance implications, the alignment of make-or-ally choices with the focal firm's resource endowment and the activity's resource requirements leads to better performance. Data on the aircraft industry show that relative to aircraft developed autonomously, collaborative aircraft exhibit greater sales but require longer time-to-market. However, governance fit increases unit sales and reduces time-to-market. We contribute to the alliance and economic organization literatures.

Suggested Citation

  • Xavier Castañer & Louis Mulotte & Bernard Garrette & Pierre Dussauge, 2014. "Governance mode vs. governance fit: Performance implications of make-or-ally choices for product innovation in the worldwide aircraft industry, 1942-2000," Post-Print hal-01066491, HAL.
    • Handle: RePEc:hal:journl:hal-01066491
    DOI: 10.1002/smj.2160
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    Citations

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    Cited by:

    1. Hwang, Peter, 2017. "The alliance map: A tool for managing fear and greed in alliances," Business Horizons, Elsevier, vol. 60(5), pages 699-706.
    2. Charlotte R. Ren & Louis Mulotte & Pierre Dussauge & Jaideep Anand, 2022. "Alliance performance and subsequent make‐or‐ally choices: Evidence from the aircraft manufacturing industry," Strategic Management Journal, Wiley Blackwell, vol. 43(11), pages 2382-2413, November.
    3. Pao, Huei-Wen & Wu, Hsueh-Liang & Lee, Cheng-Yu, 2020. "Project interface choice and knowledge creation: Evidence of international science cooperation in Taiwan," Technovation, Elsevier, vol. 89(C).
    4. Ashton Hawk & Jeffrey J. Reuer & Andrew Garofolo, 2021. "The Impact of Firm Speed Capabilities on the Decision to Partner or Go It Alone," Strategy Science, INFORMS, vol. 6(3), pages 191-208, September.
    5. Sande, Jon Bingen & Haugland, Sven A., 2015. "Strategic performance effects of misaligned formal contracting: The mediating role of relational contracting," International Journal of Research in Marketing, Elsevier, vol. 32(2), pages 187-194.
    6. Stefano Elia & Rajneesh Narula & Silvia Massini, 2015. "Disentangling the Role of Modularity and Bandwidth in Entry Mode Choice: The Case of Business Services Offshoring," John H Dunning Centre for International Business Discussion Papers jhd-dp2015-06, Henley Business School, University of Reading.
    7. Heather Berry & Aseem Kaul & Narae Lee, 2021. "Follow the smoke: The pollution haven effect on global sourcing," Strategic Management Journal, Wiley Blackwell, vol. 42(13), pages 2420-2450, December.
    8. Nguyen, Huu Le & Larimo, Jorma & Wang, Yi, 2019. "Control, innovation and international joint venture performance: The moderating role of internal and external environments," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    9. Joon Mahn Lee & Rahul Kapoor, 2017. "Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms," Organization Science, INFORMS, vol. 28(5), pages 931-946, October.
    10. Kvedarienė Audronė, 2019. "Strategic technology management within global value systems," Open Economics, De Gruyter, vol. 2(1), pages 43-52, January.
    11. Hu, Nan & Li, Lu & Li, Hui & Wang, Xing, 2020. "Do mega-mergers create value? The acquisition experience and mega-deal outcomes," Journal of Empirical Finance, Elsevier, vol. 55(C), pages 119-142.
    12. Fernandez, Anne-Sophie & Chiambaretto, Paul & Chauvet, Mathieu & Engsig, Juliane, 2021. "Why do MNEs both make and coopete for innovation?," Technovation, Elsevier, vol. 106(C).
    13. Anne Parmigiani & Jennifer Irwin & Brooke Lahneman, 2022. "Building greener motorhomes: How dual‐purpose technical and relational capabilities affect component and full product innovation," Strategic Management Journal, Wiley Blackwell, vol. 43(6), pages 1110-1140, June.
    14. Yi-Chi Hsiao & Hsueh-Liang Wu & Chun-Ping Yeh, 2023. "An investigation of the bridging interface strategies used by Chinese MNE when undertaking FDI to Taiwan," Asian Business & Management, Palgrave Macmillan, vol. 22(4), pages 1485-1512, September.
    15. Diestre, Luis, 2018. "Safety crises and R&D outsourcing alliances: Which governance mode minimizes negative spillovers?," Research Policy, Elsevier, vol. 47(10), pages 1904-1917.
    16. Elia, Stefano & Massini, Silvia & Narula, Rajneesh, 2019. "Disintegration, modularity and entry mode choice: Mirroring technical and organizational architectures in business functions offshoring," Journal of Business Research, Elsevier, vol. 103(C), pages 417-431.

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