Improvisation in new product alliances

Abstract

New products often emerge from alliances engaged in some degree of improvisation (convergence of planning and execution). However, since prior research has mainly focused upon improvisation within organizations, little is known about alliance-level improvisation or how it impacts new product development. Drawing on a broad set of literatures, we also propose that firms participating in alliances often align with partners that possess similar skills, lack a shared history, and place importance on external threats. We propose that these characteristics influence both the incidence and impact of improvisation within new product alliances. We test the effect of these three characteristics upon the incidence of improvisation in an initial study of 106 U.S. firms engaged in new product alliances. We then examine the degree to which these three characteristics moderate the impact of alliance improvisation upon new product performance via a follow-up study among 54 of these firms. We find that improvisation is more likely to occur when alliance partners lack relational experience but share similar skills. Furthermore, the impact of alliance improvisation on new product performance is enhanced when alliance partners possess similar skills, share relational experience, and place low importance on external threats. We then seek to replicate our findings in a third study involving 252 U.S. firms recently engaged in new product alliances, and also spotlight a few other drivers of alliance improvisation, including skill complementarity, shared governance, and cultural fit. We discuss the implications of our research for improvisation scholarship, provide managerial recommendations for enhancing improvisation practice, and offer a future research agenda for improvisation in new product alliances.