Alliance Re‐Evaluation in the Context of Outside Partnering Opportunities: Decision Heuristics and the Impact of Environmental Uncertainty

Abstract

Empirical evidence shows that firms engaging in alliance re‐evaluation are able to increase their alliances’ performance. However, extant literature largely treats alliance re‐evaluation as a ‘black box’. In this paper, we develop a conceptual model of alliance re‐evaluation to gain better insight on this important phase of the alliance lifecycle. Further, in a decision experiment, we study alliance managers’ heuristics applied to the decision of whether to pursue an outside partnering opportunity during the course of an alliance re‐evaluation. Our results show that in their decision heuristics alliance managers rate value creation‐related partner characteristics more highly than commitment‐related partner characteristics. However, the importance of commitment‐related characteristics is contingent on the level and dimension of uncertainty present in the managers’ environment. Thus, our findings call for a more nuanced perspective on environmental uncertainty in alliance re‐evaluation decision making. Implications for research on alliances and managerial heuristics are discussed.