Organizational Identity and Interorganizational Alliances

TL;DR: In this article, the authors examined the relationship between organizational identity and the formation and performance implications of interorganizational alliances and developed a theory of how this variation affects the search for alliance partners in terms of the speed of alliance formation and the diversity between the new organization and its partners.

Abstract: This dissertation examines the relationship between organizational identity and the formation and performance implications of interorganizational alliances. The first study investigates the effect of an organization's identity on its initial alliance portfolio formation, addressing how becoming comprehensible through organizational identity is a fundamental step in order for a new organization to be accepted by the market. Through different categorizations, some new organizations will be more comprehensible and possess clearer identities in the market than others. I develop a theory of how this variation affects the search for alliance partners in terms of the speed of alliance formation and the diversity between the new organization and its partners. The second study investigates how organizational identity affects the impact of alliances on performance outcomes. Alliances that explore and experiment tend to affect organizational outcomes negatively, at least in the short term. Although exploration strategies facilitate learning and adaptation in the long run, they incur costs due to the nature of experimentation. I advance an alternative perspective that organizational identity plays a role in this alliance-performance link. Depending on the strength of an organization's identity in terms of how coherent and taken-for-granted its categorization or social grouping is, the effect on performance may be more or less negative. Overall, this research indicates that organizational identity matters both to an organization's initial alliance portfolio formation and to the impact of this alliance portfolio on performance outcomes. This work contributes to the literature streams of both organizational identity and alliances, and presents the first systematic investigation of the link between them.