How strategic needs influence alliance formation and their governance modes: An empirical study in the Italian biopharmaceutical industry

Abstract

Firms enter strategic alliances for various reasons, and the motives behind formation of these alliances are one of main research subjects in the management field. The large literature on the issue has highlighted how alliances answer to a strategic need for collaboration that is the need to improve competitive strength through collaboration agreements. However, the study here addresses the strategic need perspective to alliances under a more specific point of view. We question what kind of competitive strengths firms aim at acquiring through inter-firm relationships. By reviewing of the most relevant literature on the issue we assume that alliances respond to three principal strategic needs: Efficiency/effectiveness need, knowledge and learning need, and global market access need. The study hypothesizes that companies enter alliances to satisfy these strategic needs and, that they influence the governance mode of the agreement. In order to empirically test the theoretical framework we have carried out a survey investigating the Italian biopharmaceutical industry. The empirical results evidence that inter-firm objectives pursued in the agreements are all ascribable to the three strategic needs and that, the governance forms of the agreements are strictly dependent on the typology of strategic need fulfilled.