A Theoretical Model for Managing Alliances: Social Psychological Foundations of a Multi-level Model

Competition and cooperation are central opposing tensions in the context of alliances. In this conceptual paper we argue that a multi-level structure is necessary to best manage these tensions: the firm (e.g., management, dedicated alliance function) embraces a competitive, self-interested orientation, while the inter- organizational group that comprises the alliance team focuses on cooperation. Yet, for cooperation to flourish, members of the group must perceive the shared alliance interest as more salient than other competing interests. We provide a social psychological solution, identification with the group identity, which we argue motivates the development and use of relational mechanisms, including, trust, relational governance and cooperative behaviors. This process architecture provides a foundation for a relational capability.