THE ROLE OF GOVERNANCE AND LEGITIMACY ON INTER-ORGANIZATIONAL RELATIONSHIPS: AN EXAMINATION OF ALLIANCE INNOVATION STRATEGY, NETWORK SPILLOVER, AND FIRM PERFORMANCE
Galloway, Tera Lynn
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This dissertation investigates the formation and impact of inter-organizational relationships through three essays. The first essay examines antecedents to firms' development of alliance management capabilities. Use the knowledge-based view, we suggest that corporate venture capital firms (CVCs) help their portfolio firms manage and develop more diversified alliance portfolios. Using a sample of 111 firms, we examine how partner diversity, national diversity, functional diversity and industry diversity impacts the performance of CVC-backed firms. We find that CVC-backing has a positive impact on performance when portfolio firms have high national or functional alliance diversity, and when more complex alliance diversity is present. The second essay seeks to answer why firms are less innovative following their initial public offering (IPO). Using the agency and real options view, we examine how different governance structures influence alliance exploration strategy. We find that CVCs and venture capitalist firms influence these strategies, and that founders moderate this effect. Using a sample of 122 firms that formed 204 alliances, we find that firms are most likely to pursue an alliance exploration strategy the firm is backed by a CVC and the founder retains high ownership power and is the chair of the board of directors. While the first two essays focus on the positive effects of alliance relationships, the third essay examines whether legitimacy loss can transfer, or spillover to other firms within the alliance network, following an acts of organizational misconduct. We explore three types of legitimacy loss (normative, regulatory and cognitive) and the differences in negative spillover as the illegitimacy is transferred throughout the alliance network. We then examine how media visibility, tenor and repair efforts impact the spillover effects. Using a sample of 43 events of organizational misconduct and the impact of these events on 229 firms, we find that the type of legitimacy loss created impacts the degree of negative spillover to 'innocent' allied firms and that these effects are moderated by both media and repair efforts.