Neither complements nor substitutes: Examining the case for coalignment of contract-based and relation-based alliance governance mechanisms in coopetition contexts

Abstract

Although the extant literature recognizes that the contract-based and relation-based alliance governance mechanisms (AGMs) play a significant role in the success of alliances, the nature of their interplay still remains ambiguous. In this study, we move away from the traditional debate between contract- and relation-based AGMs as substitutes versus complements. Instead, we offer the notion of “fit” or the “coalignment” as a more appropriate frame to explain the interplay between contract- and relation-based AGMs in the coopetition context. We conceptualize ‘Coalignment of Alliance Governance Mechanisms’ (CAGM) as a distinct higher-order construct and outline a methodological orientation to estimate the coalignment of the two forms of AGMs. We conduct a longitudinal study using primary data from 320 matched coopetition alliances in high-technology research-intensive sectors in India and find that the CAGM explains better the impact of governance mechanisms on value creation in coopetition alliances.