Alliance‐building Process as Inhibiting Factor for SME International Alliances
| DOI | http://doi.org/10.1111/1467-8551.12159 |
| Date | 01 July 2016 |
| Published date | 01 July 2016 |
British Journal of Management, Vol. 27, 497–515 (2016)
DOI: 10.1111/1467-8551.12159
Alliance-building Process as Inhibiting
Factor for SME International Alliances
N.Arranz,M.F.Arroyabe
1,2 and J. C. Fdez. de Arroyabe3
Faculty of Economics and Business Administration, UNED, Senda del Rey 11, Madrid, Spain, 1CREA,
Universit´
e du Luxembourg, 162 A, avenue de la Fa¨
ıencerie, Luxembourg, 2Maastricht University,
Tongersestraat 53, Maastricht, The Netherlands, and 3Essex Business School, University of Essex, Elmer
Approach, Southend-on-Sea SS1 1LW, UK
Corresponding author email: jcfern@essex.ac.uk
This study examines how the alliance-building process aects the intention to enter into
international alliances in the case of small and medium-sized enterprises (SMEs). From
a psychological perspective (Perceived Behavioural Control), the authors analyse the
alliance-building process as an inhibitor of the international collaboration intention, con-
sidering to what extent the experience aects the intention of the partners involved. The
study explores these hypotheses based on a sample of 220 Spanish SMEs. The results
provide empirical evidence showing that the intention to developinternational alliances is
negatively aected by the search and the selection process as well as by the negotiation
of the agreement, which reduces the intention to establish an international agreement. In
addition, the intention is moderated by the experience of the SME manager. Moreover,
there is a negative relationship between the extent of the SME manager’s international
experience and the intention to develop an international alliance.
Introduction
Traditionally, research on the internationaliza-
tion of business and entrepreneurship has high-
lighted the diculties and risks of this process
(Lu and Beamish, 2001). International alliances1
and cooperation agreements in general allowsmall
and medium-sized enterprises (SMEs) to gain ac-
cess to additional resources and enter markets in
ways not possible for a single firm (Burgel and
Murray, 2000; Homann and Schaper-Rinkel,
2001). International alliances appear to be a fun-
damental factor for SMEs in mitigating situations
with high transaction costs, and for ruling out ini-
tial hypotheses regarding the size and experience
needed to operate abroad (Lu and Beamish, 2001;
McDougall, Shane and Oviatt, 1994). These co-
operative relationships search for synergies that
1International alliances are defined as joint ventures, li-
censing, distribution/ production agreements (Bierly and
Gallagher,2007).
aim to reduce risk and to obtain economies of
scale and scope (Coviello and McAuley, 1999;
Lu and Beamish, 2001, 2006; McDougall and
Oviatt, 2000). Despite the advantages oered by
international alliances, empirical evidence showsa
low level in their use. Thus, for example in the EU
case, one-fifth of EuropeanSMEs develop interna-
tional activities, and only5% have subsidiaries and
joint ventures abroad (Observatory of European
SMEs, 2010). Fink, Harms and Kraus. (2008),
Hopp and Lukas (2014) and Lu and Beamish
(2001) point out that the use of international
alliances entails several obstacles and barriers de-
rived from factors such as the coordination of two
or more partners, the search for the right part-
ner, the emergence of goal conflicts, the lack of
trust and understanding, and cultural dierences
(Audretsch, 2009; Lu and Beamish, 2001, 2006;
McDougall and Oviatt, 1999, 2000). These obsta-
cles reveal that the alliance cooperation itself is
not a guarantee of successful entry in international
markets.
© 2016 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
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498 N. Arranz, M. F. Arroyabe and J. C. Fdez. de Arroyabe
Although a body of research has focused on
the role of managers’ cognitive structures in
operating alliances (Dwyer, Schurr and Oh, 1987;
Holmberg and Cummings, 2009; Osborn and
Hagedoorn, 1997; Spekman et al., 1998; Swoboda
et al., 2011), there is a dearth of research on
their role in alliance-building. The manager of
a firm is the person who rationally coordinates
organizational activities, even though the strategic
process of the firm is typically viewed as flows
of information and decisions, detached from the
insights of the managers involved (Carpenter,
Geletkanycz and Sanders, 2004; Hambrick and
Mason, 1984). The literature suggests that firms’
decision to pursue alliances as a strategic goal
is the result of the reflection of managers in the
organization, and their choice of action is based
on their idiosyncratic experiences, motives and
influences of people in their social environment
(Carpenter, Geletkanycz and Sanders, 2004;
Finkelstein and Hambrick, 1996). Managers’
perceived ease or diculty of entering into and
implementing alliances are likely to impact their
predisposition to support alliance formation
(Gulati, 2008; Larson, 1992). In this context, the
literature suggests that alliance-building involves
a complex decisional process, whichis not without
diculty for managers. Swoboda et al. (2011)
stress the need for adequate strategic, structural
and cultural fit between partners, and Reuer and
Ari˜
no (2007) highlight the preparation of the
contract as a source of diculties in the early
stages of alliances. Therefore, following Ajzen’s
formulation (Ajzen, 1991, 2002), the intention
of the individual to develop an action will be
conditioned by the perceived ease or diculty of
performing the behaviour.
Against this backdrop, our research focuses on
the impact of diculties raised in the early stages
of alliance-building on managers’ intention to en-
ter international alliances. Our study employs the
psychological foundations of intentional theory
(Ajzen, 1991, 2002), which has been characterized
as insightful in its ability to understand and ex-
plain individual behaviours and intentions (Hills,
Shrader and Lumpkin, 1999; Kibler, Kautonen
and Fink, 2014), and as a theoretical lens for ex-
amining these diculties. Our study uses the Per-
ceived Behavioural Control (PBC) perspective to
explore the intention to enter international al-
liances, and the moderating role of managers’ ex-
perience.From the PBC viewpoint, the intention to
develop an action is conditioned by the degree of
control that the manager has on thataction, and it
is moderated by a series of endogenousfactors that
aect the alliance-building process.We include the
manager’sexperience in international alliances as a
moderating factor; this is considered from a triple
perspective: as a factor of learning (Cohen and
Levinthal, 1990); as a motivational factor (Baron,
2004, 2006); and as a factor to generate social gov-
ernance mechanisms between the partners (Poppo
and Zenger, 2002).
We test our hypotheses using a representative
sample of Spanish SMEs with experience in
international activities. We focus our analysis
on commercial cooperation to test how the
alliance-building process aects SMEs’ intention
to develop international cooperation. Spanish
SMEs, although important in the Spanish econ-
omy, are lagging behind the European average in
terms of internationalization and the use of inter-
national cooperation (Observatory of European
SMEs, 2010). Research on Spanish SMEs high-
lights the lack of firms’ experience in developing
geographic markets, the managers’ deficiencies in
knowledge of foreign languages, the low added
level of products (Observatory of European
SMEs, 2010), and the high level of family busi-
nesses (Fern´
andez and Nieto, 2006). Fern´
andez
and Nieto (2006) argue that international coop-
eration agreements are established in an informal
and unstructured way, most of them with in-
ternational suppliers. Moreover, they point out
that family businesses are unlikely to cooperate,
because founders are reluctant to make changes
and to decentralize the decision process. As for
the perception that Spanish entrepreneurs have on
international cooperation, besides the classic and
negative aspects highlighted in the literature (e.g.
the problems in the choice of partner, the need for
an adequate coordination, the problems derived
of opportunistic behaviour), they consider the
process of establishing the agreement as complex
and tedious (Consejo Superior de C´
amaras, 2007).
Therefore, by investigating the inhibiting factors
of international cooperation perceived by SMEs,
and acknowledging the importance of interna-
tional growth by SMEs for the Spanish economy,
this study has important implications both for
firms and for government support organizations.
In addition, this research makes a number of
theoretical contributions. First, it adds significant
new empirical knowledge to the strategic alliance
© 2016 British Academy of Management.
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