Alliances, Mergers & Networks
“The effect of legitimacy in the alliance partn er selection process in ICT SME s”
Kasper Forch 2568174
Jeroen Huberts 2568468
Tobias Sapuletej 2563667
Max Willems 2568047
Remco Zuijdervliet 2562435
December 17th 2015
Team 1
Dr. Tjemkes, B.V.
,2
,Table of Contents
1. Introduction ......................................................................................................................................... 5
2. Theoretical Background ....................................................................................................................... 6
2.1 Literature review ............................................................................................................................ 6
2.1.1 Alliances in the ICT sector ....................................................................................................... 6
2.1.2 Small and Medium Enterprises ............................................................................................... 7
2.1.3 Alliance partner selection and legitimacy ............................................................................... 7
2.1.4 Alliance Partner Selection Process .......................................................................................... 7
2.1.5 Legitimacy ............................................................................................................................... 8
2.1.6 Influence of Legitimacy on Comprehensive Alliance Partner Selection Process .................... 9
2.2 Managerial Implications ............................................................................................................... 12
2.3 Movie Design Decisions ............................................................................................................... 13
2.3.1. The Storyboard ..................................................................................................................... 13
2.3.2 Shooting the Scenes .............................................................................................................. 13
2.3.3 Editing.................................................................................................................................... 13
3. Method ............................................................................................................................................... 14
3.1 Data Collection ............................................................................................................................. 14
3.2 Operational Definitions ................................................................................................................ 15
3.3 Data Analysis ................................................................................................................................ 15
4. Results ................................................................................................................................................ 16
4.1 Case Company X ........................................................................................................................... 16
4.1.1 Commercial Director X .......................................................................................................... 16
4.1.2 Technical Director Company X .............................................................................................. 16
4.2 Case Company Y ........................................................................................................................... 17
4.2.1 Managing Director Company Y ............................................................................................. 17
4.2.2 Project Manager Company Y................................................................................................. 17
4.3 Cross Case Analysis ...................................................................................................................... 18
4.4 Results of Feedback Round .......................................................................................................... 20
4.4.1 Case 1: Sogeti B.V. ................................................................................................................. 20
4.4.2 Case 2: Polytrading B.V. ........................................................................................................ 20
4.4.3 Case 3: ................................................................................................................................... 20
4.4.4 Case 4: ................................................................................................................................... 20
5. Conclusion .......................................................................................................................................... 21
6. References .......................................................................................................................................... 22
3
,Appendix I CAPSP Description ................................................................................................................ 24
Appendix II Results ................................................................................................................................. 25
Appendix III Feedback Round Results .................................................................................................... 29
Appendix IV Storyboard ......................................................................................................................... 30
Appendix V Final Cut Pro X ..................................................................................................................... 33
4
, 1. Introduction
Alliances are the cornerstone of competitive advantage for many of today’s firms, and enable them
to achieve objectives that are otherwise hard to realize. In this research, an alliance is defined as a
voluntary, long-term, contractual relationship between two or more autonomous and independent
organizations, designed to achieve mutual and individual objectives. Firms thus enter alliances to
access valuable and complementary resources they do not already possess (Tjemkes, Vos & Burgers,
2012). Alliances are especially present in the Information and Communication Technology (ICT)
sector, since this sector is characterized by high interdependence between organizations. Therefore,
the focus of this paper is on ICT companies, sized from small to medium (SME), and how they achieve
objectives through alliances.
However, in order to reach these objectives, the issue arises of how to identify and select a suitable
partner that can help to realize objectives. Alliance failure often results when managers fail to
complete their decision-making tasks for crucial development stages such as alliance partner
selection (Tjemkes, Vos & Burgers, 2012). In order to do this successfully, the alliance partner
selection process (APSP) is introduced. Within literature, two different APSPs are found, and both of
these APSPs consist out of multiple steps that lead to the selection of the best fitting alliance partner
(Tjemkes, Vos, & Burgers, 2012; Holmberg & Cummings, 2009). We combine these two diverse
processes in order to develop a more complete, comprehensive alliance partner selection process
(CAPSP).
In the CAPSP, the SME’s alliance manager’s view can have a great impact on whether an alliance is
forged, whereas in large firms, a single person’s view is less important (Dickson & Weaver, 2011).
However, it is important that alliance partners are selected carefully because of threats of entering
an alliance are loss of firm-specific information, opportunistic behavior of the partner firm and the
risk of becoming dependent (Hamel, 1991; Lohrke, Kreiser & Weaver, 2006; Tjemkes, Vos & Burgers,
2012). Legitimacy may affect the view of an owner or manager in an ICT SME. Legitimacy can be
defined as “a generalized perception or assumption that the actions of an entity are desirable,
proper, or appropriate within some socially constructed system of norms, values, beliefs, and
definitions” (Suchman, 1995, p. 574).
Since legitimacy may affect the view of an owner or manager, the question arises to what degree it
will influence their choices in the CAPSP, since proper completion of this process may come with
advantages that increase the likelihood of alliance success. Existing literature shows that legitimacy
plays a role in multiple stages of the alliance development process. However, we argue that it is
especially important in the CAPSP, because legitimacy may determine whether a partner is selected.
In addition, we find that the literature does not yet provide a model of alliance partner selection in
which the effect of legitimacy is shown. Therefore, our objective is to bridge this gap and introduce a
model where the effect of legitimacy on the selection of an alliance partner is clear.
In order to do so, this paper starts with discussing existing literature. In the theoretical background,
we build and validate a conceptual model, discuss its managerial implications, and discuss the
decisions we make for making an instructional movie for managers to use in practice. Second, we
elaborate upon the methods adopted for this research. Third, we present results of the interviews.
We end this report with a conclusion. The research question leading us is as follows: “How does
legitimacy affect the alliance partner selection processes in IT SME’s?”.
5
“The effect of legitimacy in the alliance partn er selection process in ICT SME s”
Kasper Forch 2568174
Jeroen Huberts 2568468
Tobias Sapuletej 2563667
Max Willems 2568047
Remco Zuijdervliet 2562435
December 17th 2015
Team 1
Dr. Tjemkes, B.V.
,2
,Table of Contents
1. Introduction ......................................................................................................................................... 5
2. Theoretical Background ....................................................................................................................... 6
2.1 Literature review ............................................................................................................................ 6
2.1.1 Alliances in the ICT sector ....................................................................................................... 6
2.1.2 Small and Medium Enterprises ............................................................................................... 7
2.1.3 Alliance partner selection and legitimacy ............................................................................... 7
2.1.4 Alliance Partner Selection Process .......................................................................................... 7
2.1.5 Legitimacy ............................................................................................................................... 8
2.1.6 Influence of Legitimacy on Comprehensive Alliance Partner Selection Process .................... 9
2.2 Managerial Implications ............................................................................................................... 12
2.3 Movie Design Decisions ............................................................................................................... 13
2.3.1. The Storyboard ..................................................................................................................... 13
2.3.2 Shooting the Scenes .............................................................................................................. 13
2.3.3 Editing.................................................................................................................................... 13
3. Method ............................................................................................................................................... 14
3.1 Data Collection ............................................................................................................................. 14
3.2 Operational Definitions ................................................................................................................ 15
3.3 Data Analysis ................................................................................................................................ 15
4. Results ................................................................................................................................................ 16
4.1 Case Company X ........................................................................................................................... 16
4.1.1 Commercial Director X .......................................................................................................... 16
4.1.2 Technical Director Company X .............................................................................................. 16
4.2 Case Company Y ........................................................................................................................... 17
4.2.1 Managing Director Company Y ............................................................................................. 17
4.2.2 Project Manager Company Y................................................................................................. 17
4.3 Cross Case Analysis ...................................................................................................................... 18
4.4 Results of Feedback Round .......................................................................................................... 20
4.4.1 Case 1: Sogeti B.V. ................................................................................................................. 20
4.4.2 Case 2: Polytrading B.V. ........................................................................................................ 20
4.4.3 Case 3: ................................................................................................................................... 20
4.4.4 Case 4: ................................................................................................................................... 20
5. Conclusion .......................................................................................................................................... 21
6. References .......................................................................................................................................... 22
3
,Appendix I CAPSP Description ................................................................................................................ 24
Appendix II Results ................................................................................................................................. 25
Appendix III Feedback Round Results .................................................................................................... 29
Appendix IV Storyboard ......................................................................................................................... 30
Appendix V Final Cut Pro X ..................................................................................................................... 33
4
, 1. Introduction
Alliances are the cornerstone of competitive advantage for many of today’s firms, and enable them
to achieve objectives that are otherwise hard to realize. In this research, an alliance is defined as a
voluntary, long-term, contractual relationship between two or more autonomous and independent
organizations, designed to achieve mutual and individual objectives. Firms thus enter alliances to
access valuable and complementary resources they do not already possess (Tjemkes, Vos & Burgers,
2012). Alliances are especially present in the Information and Communication Technology (ICT)
sector, since this sector is characterized by high interdependence between organizations. Therefore,
the focus of this paper is on ICT companies, sized from small to medium (SME), and how they achieve
objectives through alliances.
However, in order to reach these objectives, the issue arises of how to identify and select a suitable
partner that can help to realize objectives. Alliance failure often results when managers fail to
complete their decision-making tasks for crucial development stages such as alliance partner
selection (Tjemkes, Vos & Burgers, 2012). In order to do this successfully, the alliance partner
selection process (APSP) is introduced. Within literature, two different APSPs are found, and both of
these APSPs consist out of multiple steps that lead to the selection of the best fitting alliance partner
(Tjemkes, Vos, & Burgers, 2012; Holmberg & Cummings, 2009). We combine these two diverse
processes in order to develop a more complete, comprehensive alliance partner selection process
(CAPSP).
In the CAPSP, the SME’s alliance manager’s view can have a great impact on whether an alliance is
forged, whereas in large firms, a single person’s view is less important (Dickson & Weaver, 2011).
However, it is important that alliance partners are selected carefully because of threats of entering
an alliance are loss of firm-specific information, opportunistic behavior of the partner firm and the
risk of becoming dependent (Hamel, 1991; Lohrke, Kreiser & Weaver, 2006; Tjemkes, Vos & Burgers,
2012). Legitimacy may affect the view of an owner or manager in an ICT SME. Legitimacy can be
defined as “a generalized perception or assumption that the actions of an entity are desirable,
proper, or appropriate within some socially constructed system of norms, values, beliefs, and
definitions” (Suchman, 1995, p. 574).
Since legitimacy may affect the view of an owner or manager, the question arises to what degree it
will influence their choices in the CAPSP, since proper completion of this process may come with
advantages that increase the likelihood of alliance success. Existing literature shows that legitimacy
plays a role in multiple stages of the alliance development process. However, we argue that it is
especially important in the CAPSP, because legitimacy may determine whether a partner is selected.
In addition, we find that the literature does not yet provide a model of alliance partner selection in
which the effect of legitimacy is shown. Therefore, our objective is to bridge this gap and introduce a
model where the effect of legitimacy on the selection of an alliance partner is clear.
In order to do so, this paper starts with discussing existing literature. In the theoretical background,
we build and validate a conceptual model, discuss its managerial implications, and discuss the
decisions we make for making an instructional movie for managers to use in practice. Second, we
elaborate upon the methods adopted for this research. Third, we present results of the interviews.
We end this report with a conclusion. The research question leading us is as follows: “How does
legitimacy affect the alliance partner selection processes in IT SME’s?”.
5
