The role of transaction cost theory and social exchange theory in strategic alliance commitment

This research utilizes transaction cost theory and social exchange theory to examine factors that impact an organization's commitment to a strategic alliance as well as the consequences of that commitment. From transaction cost theory the factors examined include asset specificity, hostages and reciprocal investments. Trust (both individual and organizational level) and power/dependence are factors from social exchange theory that were proposed to lead to commitment to a strategic alliance. For trust, hypotheses were suggested for four factors leading to both organizational and individual levels of trust--previous relationships, attachment, communication, and shared values. Additionally, commitment was proposed to lead to three specific alliance outcomes--continuity, flexibility, and performance.; Survey data were collected from 91 U.S. based research and development strategic alliance partners involved in information technology alliances. The hypotheses were tested using structural equation modeling.; The joint testing of the influence of factors from transaction cost economics and social exchange theory on an organization's commitment to a strategic alliance revealed an interesting set of relationships. The initial analysis showed that, except for the role of hostages, transaction cost economic factors were not related to commitment. Thus, contrary to previous findings, no support was found for the relationship between asset specificity and commitment. Likewise, reciprocal investments were not found to be related to an organization's commitment to a strategic alliance.; Evidence provided mixed results for the role of social exchange theory in explaining an organization's commitment to a strategic alliance. While the results showed no support for the power/dependence perspective, the other key component of social exchange theory, trust, was found to be an important factor in determining an organization's commitment to an alliance. Specifically, both organizational level trust and individual level trust were found to be significantly related to commitment. Finally, the results provide support for the importance of the concept of commitment in interorganizational relations. Commitment was found to be positively related to three important alliance outcomes: continuity, flexibility and performance.