Alliance Re-Evaluation in the Context of Outside Partnering Opportunities: Decision Heuristics and the Impact of Environmental Uncertainty

Empirical evidence shows that firms engaging in alliance re-evaluation are able to increase their alliances’ performance. However, extant literature largely treats alliance re-evaluation as a “black box”. In this paper, we develop a conceptual model of alliance re-evaluation to gain better insight on this important phase of the alliance lifecycle. Further, in a decision experiment, we study alliance managers’ heuristics applied to the decision of whether to pursue an outside partnering opportunity during the course of an alliance re-evaluation. Our results show that in their decision heuristics alliance managers rate value creation-related partner characteristics more highly than commitment-related partner characteristics. However, the importance of commitment-related characteristics is contingent on the level and dimension of uncertainty present in the managers’ environment. Thus, our findings call for a more nuanced perspective on environmental uncertainty in alliance re-evaluation decision making. Implications for research on alliances and managerial heuristics are discussed.