What informs a firm’s Attractiveness as an Alliance Partner? The development of a survey instrument.

Strategic alliances are defined as inter-organisational collaborative arrangements whose purpose is to achieve the strategic targets of partners (Das and Teng, 1998). Within the pharmaceutical industry, they represent a key form of disintegration that enables organisations to create a network based on partnerships, whereby the overarching goal is to pursue a set of agreed-upon goals, in which they share the benefits (Chen and Chen, 2002). Despite the high prevalence of strategic alliances within this industry, only 50% are considered stable or achieve performance perceived by the partners as satisfactory (McCutchen et al., 2008) and up to 70% terminate early (Kogut, 1989; Park and Russo, 1996; Park and Ungson, 1997). Nevertheless, 85% of the senior executives still believe alliances are and will continue to be essential or important to their business (Powerlinx, 2014), and as such have invested significantly in becoming attractive alliance partners, or partner of choice. Further, both conceptual and empirical evidence has signaled that a partner’s attractiveness can have significant contribution to the success of the alliance itself (Coombs and Deeds, 2000; Lee, 2007).

Despite this evidence, there is no validated approach for a firm to test how attractive they are perceived to be by prospective partners. Without this, a firm is not able to tangibly understand what their perceived strengths and weaknesses are, and how these evolve over time. The purpose of this research is to address this gap. Further, the research aims to understand the impact of firm’s Alliance Strategy on their attractiveness scores.

As such, this research makes three overarching and significant contributions; (1) the identification of two key antecedents of a firm’s Attractiveness as an Alliance Partner (2) the development of a self-assessment questionnaire for a firm to use in order to quantify their attractiveness, and (3) the development of research propositions for how an Alliance Strategy moderates the relationship between Attractiveness and its antecedents.

This research applies Network Theory, which, in its most simple terms, refers to a firm’s relationships with others that have important and desired resources (Ireland et al., 2002). Networks promote alliance formation and firm success through ‘social capital’, described as the benefits a firm derives from their relationships (Coleman, 1988). Social capital increases in alliances with greater diversity within their networks (Baker, 2000) and with the quality of the alliances themselves (Glaister and Buckley, 1999). As such, this theory plays a key part in explaining the identified antecedents of Attractiveness - Previous Alliance Performance and Alliance Portfolio Diversity. In turn, this research extends Network Theory in two ways. Firstly, by introducing the novel concept of Attractiveness as an Alliance Partner as an indicator of a firm’s success or performance. Secondly, by introducing the novel concept of an Alliance Strategy as an important condition that will moderate a firm’s attractiveness.

A mixed method approach has been used, comprising of four Empirical Studies in order to develop and finalise the research propositions and questionnaire. This research has been conducted within and for the pharmaceutical industry specifically but can be applied to other industries.