Make the Alliance Personal: A Dependence Framework of Managerial Personal Tie Activation in Alliance Management

In this study, we explore an intriguing yet understudied question: Would top managers decide to activate personal ties to manage their firms’ alliances? We address this question by synthesizing the insights of the research on personal tie activation and resource dependence theory to develop a nuanced theoretical framework on the mechanisms underlying top managers’ personal tie activation decisions in alliance management. We highlight that the interdependence features between two alliance partner firms (i.e., mutual dependence, power imbalance, interpartner competition, and the interactions thereof) together shape the partner firms’ relational dynamics in the value creation and value appropriation in their alliance. Accordingly, these features determine the potential benefits and costs for top managers of the partner firms to activate their personal ties to manage this alliance, both for their firms and for themselves. We draw empirical evidence from a field study with 244 alliances between Chinese firms and an experimental vignette study with 212 real-world managers in China. Results of our analyses support our predictions, with a few intriguing exceptions. We derive valuable implications for theory and practice.