ORIGINAL RESEARCH ARTICLE

Toward a Dynamic Analysis of Trust-Building Process Through the Strategic Alliance Life Cycle: The Role of Dynamic Capabilities

Kaouther Ben Jemaa-Boubaya1, Fadia Bahri Korbi2 and Foued Cheriet3*

1OCRE, EDC Paris Business School, Puteaux, France; 2Laboratoire Interdisciplinaire de Recherches en Sciences de l’action (Lirsa), Conservatoire National Des Arts et Métiers, Paris, France; 3Montpellier Interdisciplinary Center on Sustainable Agri-Food Systems (MoISA), Institut Agro Montpellier, Montpellier, France

 

Citation: M@n@gement 2024: 27(5): 38–63 - http://dx.doi.org/10.37725/mgmt.2024.8301.

Handling editor: Simon Porcher

Copyright: © 2024 The author(s). Published by AIMS, with the support of the Institute for Humanities and Social Sciences (INSHS).
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Received: 13 October 2021; Accepted: 31 October 2023; Published: 6 December 2024

*Corresponding author: Foued Cheriet, Email: foued.cheriet@supagro.fr

 

Abstract

Literature has acknowledged trust as a major factor in the performance of strategic alliances. However, little research has attempted to analyze the process of building trust in parallel to the evolution of a strategic alliance. Using a longitudinal qualitative study of five cases of strategic alliances, we document a new process framework of building trust throughout the alliance life cycle. Our research has many implications. First, we contribute to demonstrate that trust is a dynamic concept. Second, we highlight that the process of building trust evolves through several iterations. We also demonstrate that this process is not linear and occurs in loops throughout the alliance life cycle. Third, we highlight the fact that trust is built through specific dynamic capabilities which refer to ‘sensing;’ ‘aligning’, ‘configuring’, and ‘adapting’. These capabilities emerge during the alliance life cycle, and influence each of the antecedents from one phase to another, allowing for a more dynamic process of building trust among partners in strategic alliances.

Keywords: Trust; Dynamic capabilities; Antecedents; Strategic alliance; Life cycle stages

The existing literature on strategic alliances emphasizes trust as one of the cornerstones of its success (Robson et al., 2008). Defined as the decision to rely on another party (i.e., a person, group, or business) under a condition of risk (Inkpen & Currall, 1998), trust constitutes a relational governance mechanism of strategic alliances which helps in reducing transaction costs associated with partners’ opportunistic behaviors, and increasing cooperative benefits by facilitating stronger ties, attachment, and higher commitments between partners (Ali et al., 2021; Madhok, 1995; Nielsen, 2004; Robson et al., 2008).

The study of trust in strategic alliances has been a prolific area of research, although there are different interpretations of trust. Indeed, some researchers consider trust as an alternative to formal alliance control mechanisms (Das & Teng, 1998). According to this approach, trust is seen as a ‘static’ causal variable of the duration or success of the alliance. With a high level of trust, partners are unlikely to behave opportunistically and negatively interpret the actions of their counterparts, thus helping to reduce the intensity and frequency of dysfunctional conflicts and to minimize transaction costs (Kale & Singh, 2009; Zaheer et al., 1998). The second approach views trust as a dynamic and evolving concept (Currall & Inkpen, 2003). The literature highlights the fact that this approach is more concerned with examining the construction and evolution of trust throughout the life cycle of the alliance (Inkpen & Currall, 2004; Nielsen, 2004; 2011). As the alliance evolves and goes through different phases of development (Das & Teng, 2002), the nature and role of trust are likely to vary (Nielsen, 2011).

Furthermore, several factors can influence the development of trust during this process, such as social antecedents (e.g., previous experience of alliances, previous exchanges with the same partner, partner reputation) and structural antecedents (e.g., respect of promises, type of contract, complementarity of resources) (Boersma et al., 2003; De Jong & Klein Woolthuis, 2008; Khalid & Ali, 2017; Lascaux, 2020; Meier et al., 2016; Silva et al., 2012).

Despite the strong interest in the process of building trust in strategic alliances, our understanding of this issue is fragmented for the following reasons. First, while the question of what antecedents develop trust has received great attention, contradictory results concerning this issue have been reported in previous studies. For instance, some researchers have shown that social antecedents, such as experience of previous alliances, develop trust by encouraging partners to act according to commonly developed values (Boersma et al., 2003). In contrast, Khalid and Ali (2017) indicate no significant relationship between trust and previous alliance experience with the same company. Moreover, for the same authors, reputation plays an active role in building trust between partners, while Meier et al. (2016) found that reputation has no impact on trust building. Thus, the literature regarding the antecedents of trust building throughout the alliance life cycle remains largely fragmented, and there is no consensus on what antecedents are truly significant for the development of trust between partners. This inconsistency in the findings calls for a more in-depth investigation to identify the antecedents that can truly influence the creation and evolution of trust throughout the alliance’s life cycle, as well as their specific role at each stage.

Second, few studies used a realistic and recursive flow schema to examine how trust is effectively built and how antecedents interact and contribute to enhance trust throughout the key phases of the alliance life cycle (Boersma et al., 2003). Indeed, we found that previous work discussed the types and roles of trust in different phases of the alliance life cycle (Boersma et al., 2003; Nielsen, 2004, 2011), but paying little attention to how trust forms or evolves, strengthens or deteriorates, disappears or resurfaces in and after each of the different phases of an alliance’s life cycle (Lascaux, 2020). In other words, no mention is made of the outcomes of building trust in each phase, while these outcomes partly condition the antecedents of the following phases. Thus, further investigation into how these antecedents come into play to establish trust between partners is necessary to provide a more integrated conceptualization of the process of building trust throughout the alliance life cycle.

Third, the development of trust also relies on partners’ capabilities in terms of collaboration, communication, etc. which refer to the social and structural dimensions of a firm’s collaborative action (Gulati et al., 2012; Schreiner et al., 2009). Although alliance dynamic capabilities have been highlighted as key determinants of collaboration success, researchers have paid sparse attention to the critical role of these capabilities in building trust between partners. Indeed, little research has been conducted to examine what capabilities are necessary for building trust, and how these capabilities influence the antecedents of building trust (Kale & Singh, 2009). Moreover, these capabilities have been associated with the post-formation stage of the alliance life cycle without considering their role throughout the whole alliance life cycle process (Schreiner et al., 2009).

In an effort to clarify the contradictory results and fill the gaps identified in prior research, our study examines the necessary dynamic capabilities for building trust throughout the life cycle of a strategic alliance. Thus, we aim to answer the following research question: ‘how dynamic capabilities are necessary to build trust throughout the life cycle of a strategic alliance?’ To answer our research question, we conducted a longitudinal study between 2013 and 2019 of five cases of strategic alliances of different types (joint-ventures and contractual alliances) and operating in multiple sectors of activity (IT, pharmaceuticals and energy). We analyze the multidimensional antecedents of trust in each phase of the alliance life cycle, responding to the call of many researchers to study the dynamics of trust in strategic alliances (Boersma et al., 2003; Khalid & Ali, 2017; Meier et al., 2016; Robson et al., 2019).

Our study reveals that trust is a dynamic and iterative concept. The process of building trust is not linear, it occurs in cycles throughout the alliance life cycle. We show that trust is built through specific dynamic capabilities which refer to ‘sensing;’ ‘aligning’, ‘configuring’, and ‘adapting’. These capabilities emerge during the phases of partner selection, negotiation, commitment, and execution, and influence each of the antecedents from one phase to another, allowing for a more dynamic process of building trust among strategic partners.

The paper is structured as follows. After addressing the basic concepts related to the analysis of trust in strategic alliances (definition, roles, and antecedents), we review previous research on the process of building trust throughout the alliance life cycle, with specific emphasis on the role of alliance dynamic capabilities. Further, we present and discuss the methodological aspects of our study in a second section. Section 3 presents the main results of our empirical analysis. Finally, results are discussed in Section 4 followed by a presentation of the theoretical and managerial implications, along with future research avenues.

Theoretical background

Trust in strategic alliances: An overview

The literature on strategic alliances has broadly recognized the importance of trust as it contributes simultaneously in decreasing transaction costs, and increasing cooperative benefits (Ali et al., 2021). First, trust allows partners to act independently without fearing each other’s reaction, and to take risks in carrying out alliance activities, which reduces the intensity and frequency of conflicts between them (Zaheer et al., 1998), and thus minimizes coordination costs (Robson et al., 2008). Second, trust contributes to promoting close ties between partners, and enhancing their attachment and mutual commitment to the alliance, resulting in strengthened relationships (Inkpen & Currall, 1998).

In the context of alliances, trust must involve several features since it is necessary to take into account (1) the multidimensionality of trust as it cannot be assessed for a single partner (Nielsen, 2004); (2) the dynamic evolution of trust as the alliance relationship goes through various stages (Boersma et al., 2003; Latusek & Vlaar, 2018; Nielsen, 2011); and (3) the multi-level treatment of trust, as it can evolve between individuals groups, organizations, and networks (Inkpen & Currall, 1998; Khalid & Ali, 2017; Lascaux, 2020; Zaheer et al., 1998). Thus, following Nielsen (2011, p. 160), we argue that ‘trust is a dynamic, multi-dimensional construct that serves different purposes during the evolution of alliance relationships’.

The issue of trust building during the alliance life cycle addresses several questions including the choice of the theoretical framework, the level of analysis of trust (interpersonal, inter-organizational, etc.), the conceptualization of trust (measurement, dimensions), as well as the antecedents and outcomes of trust in relation to the dynamics of the alliance itself. After consulting approximately 40 journal articles, reports, and books, which concern the dynamics of trust and the evolution of strategic alliances, we selected the major studies conducted over the period 2003–2020, which deal simultaneously with these two themes (see summary in Table 1).1 In this regard, we narrowed the search to the most relevant articles dealing with the issue of building trust in strategic alliances.

Table 1. Selected contributions on the concept of trust
Authors Theoretical grounding Conceptualization of trust Alliance life cycle Antecedents
Boersma et al., 2003 Transaction cost theory Competence-based trust refers to ‘an expectation that a party will perform its role competently’.

Goodwill-based trust ‘occurs when there are no explicit promises which are expected to be fulfilled, as in the case of contractual-based trust, nor fixed professional standards to be reached, as in the case of competence-based trust’.

Promissory-based trust refers to ‘an expectation that a party can be relied upon to carry out a verbal or written promise’.
1) Previous history stage
  • Direct personal contact
  • Reputation
  • Prior exchange
2) Negotiation stage
  • Putting oneself into the other’s shoes
  • Judgment
  • Personal relationship
3) Commitment stage
  • Formal legal contact
  • Financial investment
  • Long-term orientation
4) Execution stage
  • Friendship
  • Cooperative behavior
  • Incompetence in solving a technical problem
Nielsen, 2004 Rational prediction-sociology/psychology Cognitive-based trust is based on predictability, past behavior, dependability, and fairness. 1) Alliance formation
Emotional prediction-sociology/psychology Affect-based trust is based on non-calculative reliance on the moral integrity, or goodwill, of others based on emotional bonds between individual and social interaction. 2) Alliance implementation
Conditional-institutional economics and sociology Institution-based trust refers to institutional factors that can act as broad support for the critical mass of trust that sustains further risk taking and trust behavior.
Rational choice-economics Calculus-based trust emerges when the trustor perceives that the trustee intends to perform an action that is beneficial (cost/benefit). 3) Alliance evolution
Conditional-institutional economics and sociology Deterrence-based trust enables one party to believe that another will be trustworthy because the costly sanctions in place for breach of trust exceed any potential benefits from opportunistic behavior.
Khalid & Ali, 2017 Social exchange theory Transaction cost theory Trust is defined as a behavior, or behavioral intention, that reflects reliance on the international joint-venture (IJV) partner under a condition of risk, and therefore involves vulnerability on the part of the trustor.
  • SET: partner’s cultural sensitivity; reputation; inter-partner communication; expected longevity of the IJV
  • TCT: resource complementary; interdependence; ownership share
Korsgaard et al., 2018 Deterrence-based trust enables one party to believe that another will be trustworthy; cost of breach of trust exceeds any potential benefits from opportunistic behavior.

Calculus-based trust emerges when the trustor perceives that the trustee intends to perform an action that is beneficial (cost/benefit).

Knowledge-based trust is based on the knowledge accumulated over repeated interactions of the trustee’s goodwill and ability.

Identification-based trust is based on the knowledge accumulated over repeated interactions of the trustee’s goodwill and ability.
1) Early-stage relationship
  • Partner reputation
  • Contextual factors (social and/or legal incentives to compel trustworthy behavior)
  • Individual differences in expectations the trustor brings to the situation (propensity to trust)
2) Intermediate stage
  • Assessment of reliability is based on past behavior and cognitive reasoning
  • Direct experience with the trustee fulfilling obligations / cumulative direct experience
3) Late stage
  • Extended interaction
  • Exchange of social benefits
Lascaux, 2020 Multilevel approach Cognition-based trust relates to perceived competence and dependability of a trusted party, which provide a rational basis for trusting expectations.

Affect-based trust is built on the emotional ties established between the parties and a sense of genuine concern for the partners’ well-being.
  • Reputation
  • Third-party legitimation
  • The search for coopetitive balance
  • Cultural impact
  • The structure of coopetition
  • The initiation of knowledge transfer
  • The deliberate arrangement of social interactions
  • Cognitive outcomes
  • Emotional reactions
  • Positive training results
Source: Own elaboration.

The first observation concerns the diversity of theoretical approaches and the conceptualization of trust and its dimensions. The studies carried out analyze the dynamics of trust on the basis of the transaction cost theory (TCT), and social exchange theory (SET). Similarly, some studies conceptualize trust as a trade-off between a calculative approach (rational choice and economic calculation) and a relational approach (social exchange, emotion, satisfaction). The second observation concerns the many measures used to assess trust and its levels: cognitive and affective trust, competence, promise or goodwill-based trust, affective and calculated trust, etc. These dimensions occur at interpersonal, intergroup, and interorganizational levels. The third observation relates to the diversity of antecedents and outcomes of the processes of building trust in strategic alliances.

Beyond these observations, the summary table of previous studies reveals many conceptual and methodological gaps (indicated by ‘shaded’ areas in the table). Indeed, most of these studies were static (with little longitudinal perspective). A dynamic approach is therefore needed to analyze the process of trust-building through the alliance life cycle. Also, several studies have been purely conceptual contributions without empirical validation of the links between the dynamics of trust and the life cycle of the strategic alliance. Finally, these studies are characterized by a lack of simultaneous integration of antecedents and outcomes of trust or feedback loops.

Antecedents of building trust through the alliance life cycle

Past studies show different types of antecedents that play an important role in building trust throughout the phases of the alliance life cycle: selection of the partner, negotiation, commitment, and execution (Ring & Van de Ven, 1994). Since trust is a dynamic variable which can vary substantially within strategic alliances, as well as over time, it is critical to identify its antecedents at each phase of the alliance life cycle, because such antecedents could determine how trust and alliance will co-evolve together (Inkpen & Currall, 2004; Nielsen, 2011).

In this regard, Boersma et al. (2003) conducted four case studies of IJV to study the main factors affecting the development of trust during the different development stages of the IJV. The authors concluded that trust can be seen both as an output and an input at various stages of the process, affected by several antecedents such as prior exchanges, direct personal contact, personal relationships, forbearance, mode of cooperation, friendship, etc. In the same perspective, De Jong and Klein Woolthuis (2008) indicate in their study of 391 Dutch firms in high-tech alliances that the antecedents of interorganizational trust include a shared past, detailed interfirm contracts, relational openness, and mutual dependence. Based on the transaction cost approach and the behavioral approach, Silva et al. (2012) conducted a study on 232 international alliances involving Portuguese and international firms to provide a more holistic view of trust and performance in international alliances. The authors identify three main antecedents as significant influencers on trust: shared values, communication, and opportunistic behavior.

Furthermore, Khalid and Ali (2017) integrated SET and TCT to develop and test a comprehensive framework of social and structural antecedents of trust in IJVs. Based on an analysis of 89 IJVs established by Nordic firms in Asia, Europe, and America, the authors find that partner reputation, communication, cultural sensitivity, expected longevity of the IJVs, and resource complementarity had a positive influence on the development of trust. However, they find that prior alliance experience with the partner firm, balanced interdependence, and balanced ownership are unrelated to trust.

In recent literature, the question of which antecedents develop trust has received greater attention than the question of the process through which trust is built; in other words how antecedents interact and contribute to enhance the next step trust level, and what dynamic capabilities are needed to build it. Although the literature review highlights several antecedents that could build trust throughout the life cycle of the alliance, few studies use a more realistic, recursive flow schema to examine this process (Boersma et al., 2003). In other words, no mention is made of the outcomes of building trust in each phase, while these outcomes partly condition the antecedents of the following phases. Also, few studies have studied the alliance dynamic capabilities necessary for the construction of trust throughout an alliance life cycle, nor their link with the antecedents of building trust.

Do alliance dynamic capabilities matter in building trust?

Alliance dynamic capabilities can be viewed as a reflection of skills required to be successful in the main phases of the establishment and management of alliances (Kale et al., 2002). By providing a theoretical account of the key cognitive, behavioral, or organizational skills that enable a firm to effectively and efficiently manage a given alliance during the post-formation phase, Schreiner et al. (2009) pointed out that alliance capability is a multidimensional construct that includes three distinct skills, namely coordination, communication, and bonding.

Robson et al. (2019) conceptualize alliance dynamic capabilities as fundamental processes underpinning the building of any strategic alliance, which refer to: (1) search capability, or processes wherein a firm evaluates strategic decisions to form alliances, and identifies and approaches appropriate partners; (2) formulation capability, or processes wherein a firm sets up governance structures, handles technical aspects of contracts, and negotiates deals; and (3) management capability, or processes wherein a firm manages cooperation and coordination of the partners after alliances are up and running. Based on their study of German and Austrian firms involved in alliance operations across a range of industries, the authors find that alliance capabilities allow partners to build resource complementarity and trust, which improve the alliance performance.

Cooperation and coordination were also examined by Gulati et al. (2012), as the two indispensable facets of inter-organizational collaboration. Indeed, the cooperation perspective deals with the questions of partners’ motivation and commitment, emphasizing the role of partners’ level of agreement about goals, the contribution of resources, and the sharing of benefits. Even when the partners resolve these questions, other questions remain about exactly how they are to interact to ensure that objectives are accomplished, synergies are achieved, and resources are used efficiently. This refers to the need to make structural, institutional, and relational coordination efforts, each based on distinct means needed to deal with the alliance organizational challenges, and to ensure that objectives are accomplished, synergies are achieved, and resources are used efficiently.

The development of alliance dynamic capabilities also stems from a dynamic process reinforced by the partner’s learning mechanisms (Teece et al., 1997). As characterized by Eisenhardt and Martin (2000), dynamic capabilities are related to the processes of integrating resources, their reconfiguration and decisions regarding the outcome of the alliance (adaptation, learning, exit, alliance organizational change). According to Teece (2000) and Barney (1999), these dynamic capabilities find their starting point in the competence of the company to identify and calibrate the opportunities offered by alliances. The authors then evoke the concepts of ‘sensing’ and seizing/strategizing to show how a partner identifies, materializes, and adapts its resources and skills with a view of optimizing its alliance. These capabilities translate into the mobilization of several skills such as anticipation and adaptation, aligning, learning and deciding (Schoemaker et al., 2018).

Although alliance dynamic capabilities were emphasized as key determinants of collaborative success, scholars have paid less attention to the critical role of these capabilities in building trust between partners. Of all the alliance dynamic capabilities identified in prior research (e.g., coordination, communication, bonding, cooperation, adaptation, alignment, learning, deciding), we have not yet determined which dynamic capabilities precisely influence the development of trust between strategic alliance partners, at which phase(s) of the alliance life cycle they can play a role, and on what specific antecedent(s) they can exert their influence. Furthermore, these capabilities were associated with the post-formation stage of the alliance life cycle, without considering the full evolution of interfirm interaction processes and their outcomes throughout the alliance life cycle (Schreiner et al., 2009).

In order to fill some conceptual and methodological gaps raised earlier in the text, we conducted this research with the aim of introducing a dynamic reading of the process of building trust in strategic alliances. To achieve this, we adopted an exploratory qualitative approach based on the study of five cases of strategic alliances.

Methodology

To study the process of building trust throughout the strategic alliance life cycle, we used an inductive and interpretative approach (Glaser & Strauss, 1967). As trust evolves over time and is influenced by multiple antecedents (Inkpen & Currall, 1998), using grounded theory helped us to develop a deeper understanding of the dynamic nature of building trust in strategic alliances. Thus, we followed the steps of the Gioia method for an inductive and interpretative approach (Gioia et al., 2013). Accordingly, we engaged in simultaneous analysis and emergent interpretation of the data (Goulding, 2005). We also chose to use a longitudinal qualitative research based on an in-depth study of five cases of strategic alliances to increase the validity and reliability of our results (Yin, 2003), thus responding to the call of previous research for more longitudinal studies on this issue (Khalid & Ali, 2017; Robson et al., 2019).

Data collection

Some of the data we used in this study were collected in 2011 during prior research concerning the alignment of objectives among partners involved in strategic alliances (Ben Jemaa-Boubaya et al., 2020). This data was then supplemented with a series of subsequent interviews in 2013 and 2019, focused on the development of trust within the same partners and alliances. In total, we carried out 28 interviews with two alliance partners. The respondents were directors and managers involved in the management of alliances that had been studied since their creation (Appendix 1). The interviews lasted an average of 1 h and 20 min.

An interview guide was created encompassing three themes: the process of alliance creation (e.g., the alliance creation date, the alliance theme, partners objectives, the cooperation mode), the different antecedents of trust (e.g., resources, contract, personal relationships, learning, communication), and the different ways to manage the alliance and how this can influence the process building of trust between partners (e.g., alignment, negotiations, and adaptation, etc.) (Table 2). We used dyadic responses (representatives of each partner) to study trust development in a strategic alliance, thus avoiding a very common methodological bias related to the adoption of the point of view of only one party in the alliance.

Table 2. Data-collection process
Interviews Twenty-eight semi-structured, face-to-face interviews lasting an average of 1 h 18 min

The final data body represents a total of 33 h of interviews and 525 pages of transcripts.
Respondents’ profiles 1) Directors: head of alliance and partnerships; alliance director; world alliance director; director of partnerships

2) Managers: manager of alliances; manager of partnerships; global alliance manager; local alliance manager
Period Between 2013 and 2019
Main themes addressed The alliance creation date, the alliance theme, the objectives set by the partners, the cooperation mode, the different antecedents of trust (e.g., resources, contract, personal relationships, learning, keeping promises), and how to build trust between partners during the alliance life cycle (adaptations, reorganizations, renegotiations, adjustments).
Source: Own elaboration.

Conducting a longitudinal study to investigate the trust-building process throughout the life cycle of a strategic alliance was imperative for several reasons. First, the data collected from both partners during the two periods of study allowed us to characterize the different phases of the trust-building process and their evolution in parallel with the alliance life cycle (i.e., from the partner selection phase to the assessment of its outcome over an average period of 10 years). This encompassed everything from the initial partner selection phase to the evaluation of its outcomes, spanning an average period of 10 years.

Following the initial series of interviews in 2013, the respondents were interviewed again in 2019 to discuss the evolution of the alliance and the process of building and developing trust. Second, our return to the field enhanced the analysis of certain antecedents and provided insights into the iterative nature of trust-building. For instance, we examined the assessment of reciprocal commitments during the negotiation phase and observed how adjustments and adaptations occurred during the execution phase, shedding light on the dynamic aspects of our analysis. This enabled us to track the evolution of these dynamic capabilities over time, assess how partners mobilized them in each phase of the alliance life cycle, and ascertain their roles in building trust. Third, the two data-collection periods served the dual purpose of monitoring changes occurring within the alliances, including shifts in governance structures, interpersonal relationships, and contract renegotiations, while also minimizing the potential for ‘memory’ biases regarding certain aspects of the cooperative history.

We also collected secondary data to enrich and corroborate the interview data (Marschan-Piekkari & Welch, 2011). This secondary data is of two types: press releases announcing the cooperation, the objectives and the resources committed (Appendix 3), and the minutes of all the meetings and conferences organized by ASAP (Association of Strategic Alliance Professionals)2 between 2011 and 2015. During these meetings, we took notes which were very useful in helping us to better understand the process of building trust within our alliance cases, as the topics discussed were related to alliance management (internal and external communication, contracts, conflicts, structure, etc.) (Appendix 4).

Once our research area was identified, we began by collecting data. This step was therefore carried out through ‘an iterative, inductive and interactional process with consultation of the literature, analysis and emergent interpretation’ (Gioia et al., 2013; Goulding, 2005). The qualitative data analysis phase continued until no new data emerged, all the concepts of the theory were well developed, and their links with other emerging concepts were clearly described, as recommended by Morse (2015). All the interviews were recorded and then fully transcribed. Interview transcripts were subsequently returned to the interviewees for verification in order to strengthen the reliability and validity of the data, as recommended by Eisenhardt (1989).

Data analysis

The data were analyzed by applying open-coding techniques (searching for words and phrases in the text that make sense) that allowed us to identify explanatory concepts (Glaser, 1978). Next, axial coding was performed to highlight relationships and a basic construct around which other concepts were built. Finally, we took an inductive approach, confronting the data with the literature (e.g., partner selection, reputation, prior exchanges, contract) and emerging themes from empirical studies (e.g., objectives alignment, resources alignment, contract alignment). This step greatly facilitated the organization of data (cf. Figure 1 and Appendix 2).

Figure 1. Data-coding process
Source: Own elaboration

MGMT-27-8301-F1.jpg

Sample description

The alliances studied were formed between large companies of different nationalities (French, American, Swiss, Irish). They were based in Europe and brought together both capitalistic and contractual relationships for marketing or R&D. The cases show significant asymmetry in terms of turnover and number of employees (Table 3). The selection of each case was made with the aim of finding regularities (literal replication) and differences (theoretical replication). As mentioned by Yin (1994), ‘Each case must be in line where it predicts similar inferences and produces contrasting results for theoretical replication’. Thus, our research enabled us to report information from the first stage of the alliance.

Table 3. Presentation of the sample
Case Partners’ country of origin (partner 1/partner 2) Date of creation Business sector (partner 1/partner 2) Alliance type Alliance scope Partner turnover (US$ millions; P1/P2) Number of employees in 2021 (P1/P2)
1 American/Irish 2011 IT/Energy Contractual alliance Marketing 21.4 / 34.94 181,000 / 710,000
2 American/French 2009 IT/Pharmaceutical Joint-venture R&D 12.69 / 24.7 51,000 / 110,000
3 American/French 2009 IT/IT Contractual alliance Marketing 38.23 / 28.6 30,100 / 10,000
4 French/Swiss 2004 Pharmaceutical/Pharmaceutical Contractual alliance R&D 4.2 / 1.7 100,000 / 5,700
5 French/American 2012 IT/IT Joint-venture R&D 48.6 / 4.15 75,900 / 85,050
Note: partners are called ‘1’ and ‘2’ to safeguard the confidentiality of the companies of our sample (based on the alphabetical order of the company name).
Source: Own elaboration.

Findings

The analysis of our results provides a better understanding of the process of building trust throughout the life cycle of a strategic alliance. Each stage (i.e., partner selection, negotiation, commitment, and execution) constitutes a new step in the process of building trust which develops, based on a set of very specific antecedents. These antecedents relate both to the structural and social dimensions of the alliance.

Stage 1: Partner selection

The analysis of our case studies shows that the first step in an alliance life cycle is selecting a partner. During this phase, managers rely on their capability to ‘sense’ the right partner based on three major antecedents: direct personal contact between the CEOs of the two partners (case 3), prior exchanges (case 5), and reputation (cases 1, 2, and 4) (Cf. Figure 2).

Figure 2. Trust-building in partner-selection stage
Source: Own elaboration.

MGMT-27-8301-F2.jpg

Direct personal contact

In case 3, the choice of the partner is related to direct personal contact and friendship between the CEOs of the two companies. Therefore, the alliance begins with interpersonal trust between the CEOs, per the following:

The decision to form an alliance came during a meeting between our CEO and his classmate. […] There are personal relationships that exist before the alliance is created. […]. The CEOs are two good friends who have known each other from college. Our CEO is very vigilant about an alliance decision. He prefers the company of his friend in whom he can trust. (Global alliance manager, case 3, P2)

Prior exchange

In case 5, partner 1 favors old partners for new alliances since past experiences could inspire trust for the company. A list of partners with whom the company has had successful alliance experience is thus prepared, then the choice of the partner is made according to the objectives set and the resources necessary to achieve them, as mentioned further in the text: ‘It is a partner with whom we have had an alliance which lasted 10 years, together we have built common know-how and working methods’.3 According to the global alliance manager (case 5, P1): ‘We start from the principle that you never change a winning team. We seek among our former partners the company that can bring us added value with which we have already won before. Our previous alliance lasted 10 years, so we know each other well’. In the same perspective, the alliance director of the partner of the same alliance confirms that ‘when we received the proposal from our prior partner, with whom the old alliance lasted 10 years and we made more than 3 million euros in profit, we can only be interested and delighted to start a new adventure with him’.

Reputation

For the other cases (1, 2, and 4), the step of finding a partner is carried out by a dedicated team within the company, that is, the alliance management department. In fact, finding a partner consists of identifying a firm with a good reputation, profile, and compatible skills; a partner that inspires trust and reliability to achieve the alliance objectives, as stipulated by the alliance manager (case 2, P1): ‘Selecting a partner is a tedious process because you have to find a company with objectives compatible with ours […]’. In this regard, the head of alliances and partnerships (case 1, P1) concludes: ‘Finding the rare pearl is hard work! […]. Generally, good companies, known by good alliance experiences, send a signal to potential partners that they have a culture of alliance management’.

In case 1, the partners met through an annual conference at an ASAP trade fair. During a business lunch, the CEOs of both companies identified compatibility between their strategic visions, which motivated them to form an alliance. This decision was validated by the fact that the managers working in the partnership department of these companies are CA-AM (Certificate of Achievement – Alliance Management)4 established by the ASAP, as stipulated by the partnerships and alliances director (case 1, P1):

Our team saw a need for collaboration to develop skills in X software […]. I attended the trade show to meet people, and why not future partners […]. While discussing with their alliance director, I discovered that our goals were shared […] the managers of the two partner companies are certified CA-AM and that was the clincher for the new alliance!

The world alliance director (case 1, P2) confirms this statement by adding: ‘We met at an ASAP conference. We realized that we have compatible objectives, but above all that we have on both sides the culture of the alliance necessary to make good alliances and confirmed by the certification established by the ASAP’.

In cases 2 and 4, the selection of the partner followed a long research process including consulting the companies’ websites as well as directories, and the directory of member companies of the ASAP and Adalec5 (partner business connection), as well as the chamber of commerce and industry databases, then selecting a multitude of companies and contacting them for a value proposition, which mentions the potential of creating an alliance with that firm, its qualities and its strengths in the market. As stated by the global alliance manager in case 2: ‘I consulted company websites, directories, and associations, then I selected several companies, leaders in the sector […]. Before contacting them, I checked their alliance relationships […] especially that they are not ‘friends’ with our competitors, otherwise we could never trust them’. Indeed, being a member of these associations implies a culture of alliance rooted in the company. In these different cases, trust has not yet been created.

Stage 2: Negotiation

Our findings show that once the partner is selected, both parties must come to the table. Negotiations are based on the capability of the partners to ‘align’ their specific objectives with the common objectives of the alliance, the specific contributions and consideration of each party, as well as the most appropriate modes of cooperation for the objectives set. The ‘sensing’ capability acquired in the previous stage therefore helps them to find objectives and resources specific to the alliance and then to align them with the objectives and resources specific to each of the partners. The partners must also have the ability to adapt to their partner’s needs in order to bring the negotiations to a successful conclusion. The exchange of viewpoints, group discussions, and spontaneous in-depth debates help to establish a climate of trust and empathy between the members of each party. Managers are relieved at the end of this step, since finding the right partner is arduous. As a result, being able to find common objectives and resources with the same partner is a good start to the collaboration. So ‘sensing’, ‘adapting’, and ‘aligning’ are the dynamic capabilities necessary to build trust during this stage (Cf. Figure 3).

Figure 3. Trust building in the negotiation stage
Source: Own elaboration.

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Objectives set

In all the cases, the partners planned weekly meetings in order to set the alliance objectives and to initiate the ‘formal’ stages of negotiation. During these meetings, the level of trust increases. By way of illustration, the alliance director (case 2) states: ‘We held meetings. The objective is to fix the teams, the deadlines set, the schedule, and results achieved build a social bond and personal relationships’.

In cases 1, 2, 4, and 5, the partners show a real willingness to form a successful alliance with complete openness to negotiations necessary to align the interests of both parties and to adapt to each other’s objectives and the alliance needs. As stated by the alliance manager (case 2): ‘Our partner is open to all negotiations to align objectives’. Thus, a mutual understanding of the needs of each party in the alliance increases the partners’ commitment within the alliance and further builds a climate of trust. Showing that you can adapt and thus align yourself with the objectives of the collaboration is a very positive signal for the collaboration.

In case 3, the situation was different from the four cases cited earlier. The decision to form an alliance was made following a meeting between the two CEOs who were already friends. Unlike other cases, this alliance was not based on specific objectives previously determined by the partner companies, but by a spontaneous decision by the CEOs. It stemmed from a strong relationship and a high level of trust. However, this trust was difficult to build as the friendship did not develop easily between the alliance management teams. Thus, faced with the multiple difficulties encountered by the teams, and in particular in setting the objectives of this new alliance, a negotiation process was put in place to have a clear trajectory for the collaboration.

Contributions and considerations

Once the objectives are set, partners are concerned with negotiating the shares in terms of resources. This involves defining each partner’s contribution in terms of resources in order to achieve the alliance objectives (human resources, technological resources, financial resources).

In cases 1, 2, and 5, the partners demonstrate a meaningful and reciprocal commitment. In fact, they established a list of resources to be committed by each party, as well as exact dates for allocating those resources to the alliance, which cemented their mutual trust and allowed the relationship to get off to a good start. For example, in case 1, the partners demonstrated their commitment by appointing a team to manage the alliance, as the director of strategic alliances said (case 1),

We have adapted well to the alliance. We have aligned our teams with the needs of the collaboration. We have appointed a team, an alliance manager and selected the support services that will be dedicated to this new alliance. We have also assigned a lawyer to this task. In addition, together we have determined the list of industrial supplies.

For case 2, the alliance manager (P1) adds,

The start of an alliance is like the start of a relationship: first you have to adapt to the partner’s rhythm […]. We continue to ‘feel’ – this time by looking for the right mechanisms to implement, the appropriate frequency of meetings, the channels of communication […] all to align ourselves with the partner and the needs of the alliance, and to demonstrate our commitment and win their trust.

In these cases, the companies are reassured by the partner’s different abilities and skills, and carry out constructive negotiations allowing them to create a reciprocal, tolerant relationship (and in some cases a kindness toward a partner’s lack of knowledge about practices), as well as to protect themselves against opportunistic behavior, as the alliance management senior director states (case 5): ‘Negotiations are based on the principle of taking only after giving, in order to demonstrate our goodwill as well as our ability to build alliances and to inspire trust in our partner’.

On the other hand, the analysis of cases 3 and 4 reveals tension and distrust between the partners due to the reluctance of some to accept allocation of the necessary resources to the alliance. In fact, trust in case 3 proved more difficult to maintain at this stage, despite the friendship and previous ties between the leaders of the two firms. Although the partners had set goals for the new alliance, the resource allocation stage proved more difficult to achieve because the alliance had not been planned, either in terms of the firm’s needs or their future plans. Each partner had tried to limit their contribution as much as possible (case 3) or to prioritize the allocation of resources to specific objectives, leaving the common objectives of the alliance without dedicated resources (case 4). In this case, doubts about the opportunism of the partner may arise because of the potential lack of commitment. Thus, trust is negatively affected as the alliance leader (case 4) pointed out: ‘Not committing to the alliance and not immediately specifying resource contributions made us doubt our partner’s ulterior objectives and opportunism’.

It should be noted that this step builds trust because it reflects the partner’s level of commitment (the next step). A strong commitment based on contribution proportional to the level of expected rewards has a positive impact on trust development. In this regard, an alliance manager (case 5) states, ‘At this stage, you need to prove your ability to align and adapt during work meetings to discuss everyone’s contributions, which is a good sign that inspires trust’.

Mode of cooperation

Our findings indicate that the mode of cooperation affects trust building. Unlike the cases of non-equity alliances (1, 3, and 4), the two cases of joint-ventures (2 and 5) involved the creation of a single unit managed jointly by the two partners. This unit led to continuous and interactive exchange between the two partners and generated a shared feeling of belonging to the same entity. It is worth noting that in case 5, the partners who had a past alliance experience decided to go for a joint-venture whereas they were previously in a capital alliance. Thus, the trust and learning acquired from the past experience encouraged them to enter into a contract that was more binding for the partners. The director of alliances (case 5) indicates in this sense: ‘We have trust and we want to take advantage of the learning acquired to make a joint-venture with our partner’.

Stage 3: Commitment

Once the objectives have been set and the resources allocated, negotiations and adaptations between the partners continue even after the commitment phase. At this stage, trust continues to grow between the partners, who rely on their ‘configuring’ capability to choose the type of contract, announce the alliance to the ecosystem, and constitute the teams (Cf. Figure 4).

Figure 4. Trust building in the commitment stage
Source: Own elaboration.

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Choosing the type of contract

The partners moved on to drawing up a contract to formalize the commitments made in the previous step. In fact, the contract represented a cornerstone of their mutual trust. It determined the normative framework of the relationship in terms of contributions, mode and scope of cooperation, methods of knowledge transfer, protection against opportunistic behavior, legal constraints to be respected by the different parties, conflict resolution and exit terms, and termination or renewal of the agreement (all cases). This contract is based on the negotiations and adaptations in terms of objectives and resources established in the previous phase. As the alliance director (case 5) states: ‘To establish trust, we start by drawing up a clear, detailed contract, which is the fruit of our negotiations and efforts to adapt’.

Formal announcement of alliance

Through formal communication, the partners announce the beginning of the collaboration after the contract is signed. By communicating, they emphasize the common interest of all teams (cases 1, 2, 3, 5). Therefore, communication builds trust between individuals and institutions, as it clarifies planned trajectories and improves the image of the alliance vis-à-vis its ecosystem so that it can develop harmoniously (Appendix 3). An alliance manager states (case 5): ‘We ensure better communication to prove our transparency to our ecosystem and consolidate the partner’s trust with no room for any doubt’.

However, in case 4, since the partners experienced difficulties in the previous stage, communication difficulties ensuing from coordination problems worsened the situation and evolution of the alliance. The lack of communication created ambiguity and accentuated their mistrust. As an alliance manager states (case 4): ‘Already in the previous stage, we were in conflict, now, we are in an outright standoff situation. […] Our partner’s communications are fuzzy, […] ambiguity on all levels’.

Management of the teams

Based on our cases, the partners need to align teams, which is essential for the inception of the alliance and trust. In fact, they set up ‘repetitive’ communications in order to connect people previously unknown to each other. They communicate about how vital the alliance’s objectives are, the deadlines set, the schedule, and results defined in the previous stage to reassure and inspire trust. As an alliance manager states (case 2): ‘There are always doubts and reticence. These are obstacles to trust. To overcome this mistrust, I communicate our objectives, the resources to be allocated, the deadlines set, and the schedule to all our managers’.

For example, in case 3, the results show that the partners tried to overcome the difficulty of setting common goals in the previous step by holding multiple meetings, first at the top management level and then between the teams involved in the alliance, to consider different goal scenarios. These meetings helped to create a favorable climate of cooperation, to reassure the teams of the usefulness of the alliance, and to define new ways of maintaining the collaboration. Connecting teams is therefore important for building trust in a strategic alliance. It removes ambiguities and tensions, encourages the sharing of ideas, and increases the motivation of partners to adapt and give their alliance a new lease of life: ‘At last things are becoming clear. The negotiations between top management are moving in the right direction, the sharing of minutes from these meetings […] all these elements have calmed the atmosphere, aligned the teams and inspired confidence’ (alliance manager, case 3).

In fact, in all the cases, alignment of the teams was necessary in order to develop the alliance. Indeed, the alliance managers had to pay particular attention to tensions which by default can lead to imbalances, dysfunctions, and difficulties. By way of illustration, one alliance director (case 5, P1) states: ‘The alliance necessarily goes through moments of tension, […] but beneficial tensions, because they help to build trust’. In the same perspective, the alliance manager of the counterpart adds: having tensions and going through waves of negotiations is essential before building a stone in the edifice of trust’ (case 5, P2).

Stage 4: Execution

Once the mode of cooperation and the operation of the alliance have been established by the partners, the execution stage consolidates the levels of trust previously achieved. Our results show that this stage depends, once again, on the partners’ capabilities to ‘negotiate’, ‘align’, and ‘adapt’ objectives, resources, and the alliance contract, and to ‘learn’ the methods and practices needed to ensure cohesion between the teams (Cf. Figure 5).

Figure 5. Trust building in the execution stage
Source: Own elaboration.

MGMT-27-8301-F5.jpg

Upgrading of objectives

In cases 1, 2, 3, and 5 (except case 4), our results indicate that during this stage, partners were concerned with continuing to align alliance goals in order to achieve alliance evolution as noted by the alliance director (case 2), ‘I keep checking that our objectives are aligned with the alliance objectives. […] Our partner must do the same on his side’. Similarly, an alliance manager (case 5) adds: ‘I check that the objectives of the alliance are strategic for both my company and my partner […]. We have regular meetings to ensure that the objectives of the alliance are coherent’. On another note, in case 4, the partners were continuing their renegotiation efforts despite distrust and reluctance. However, these efforts did not improve the situation or the relationship’s stability. Following the negotiations, the defined action plans were not followed which led the partners to raise the possibility of leaving the alliance in order to save resources and spare the teams involved. A report was made to the board of directors and to the experts involved. ‘We cannot be in a one-sided partnership where we are the only ones moving forward […], two years of negotiation. We have to change the lens and the prism […]. Our partner decides not to sue us, […] we become suspicious of his suspicious behavior’ (alliance director, case 4).

Upgrading of resources

In cases 1, 2, and 3, the partners continue to adapt the allocation of resources according to the needs of the collaboration. In case 4, the situation continued to worsen, and one of the two partners continued to show reluctance in mobilizing resources for the alliance. This partner’s lack of commitment prevented the alliance from evolving. As a result, conflicts and tensions poisoned the atmosphere of cooperation, as the alliance manager (case 4, P1) states: ‘We cannot align our objectives if we do not have the resources and especially if we have real mistrust vis-à-vis our partner’s behavior’. In the same perspective, the alliance manager of his counterpart adds: ‘We feel the mistrust of our counterparts in view of our reluctance to mobilize the necessary resources’ (case 4, P2).

In case 5, partners who have moved to a joint-venture have been confronted with a lack of resources because the new mode of collaboration requires heavier resources. Thus, meetings between the teams have determined new investments and increased the means allocated, as an alliance manager emphasized (case 5, P2): ‘A joint-venture is a commitment in its own right, very different from a commitment in a capital alliance. So, with my partner, we have to add resources. We have to adapt to this new mode of collaboration’.

Improvement of methods and practice

In cases 1, 2, and 3, partners were taught through cross-company training sessions scheduled at this stage. Training sessions pertaining to software use were planned to help the partner acquire new skills to achieve the alliance objectives. These training courses gave rise to fruitful discussions between the parties, enabling the partners to readjust their methods, orientations, and strategies, and to achieve predefined objectives. As an alliance manager (case 1) highlights: ‘Our software is very powerful, it makes our life easier, so first thing: to benefit our partner we offer them training’.6 Following multiple exchanges and coordination and cohabitation efforts between both teams of partners, a sense of belonging to this new entity makes the relationship comfortable.

On the other hand, the partners from case 4, blocked at the previous stage by a lack of commitment on both sides, did not mention any possibility of learning because conflicts, frustrations, and doubts eroded the climate of cooperation and trust.

Contract renegotiation

The analysis of our interviews indicates the existence of an evolution of the alliance contract (cases 1, 2, 3 and 5). Indeed, the ‘draft contract’ corresponding to the narrow contract has been adapted and evolved to a ‘broad contract’. This is a formal legal contract. The adaptation of this contract integrates all the negotiations and alignments made between the partners since the beginning of the alliance life cycle (all cases except case 4). It is a result of the consolidation of trust established between the partners. As the following two statements underline: ‘We started at the commitment stage with a ‘draft contract’, now we are in a situation of trust, things are much clearer so we can define a very detailed contractual corpus’ (Alliance manager, case 2). ‘The contract ensures a good atmosphere. It inspires trust’ (Alliance director, case 3).

Teams’ relationship development

Except in case 4, the previous stages made it possible to foster significant levels of trust between the partners. At this point, they showed a high degree of satisfaction with the evolution of the alliance (Appendix 4). Overall, they managed to overcome delicate situations. The partners forged good relationships through multiple formal and informal exchanges. Trust was further strengthened, ultimately helping to expedite the achievement of mutual objectives. On this subject, an alliance manager (case 2) states: ‘At this stage, we are reaping the benefits of the efforts made in the preceding stages, especially in terms of building trust’.

The people involved shared day-to-day operations, continuously participating either in joint meetings or in inter-partner training. A climate of interpersonal trust was therefore strengthened despite the existence of some occasional tensions, which are rather common during the alliance life cycle. These human relationships improved the relationship and the consolidation of trust. By way of illustration, the alliance manager in case 5 states:

I have often forgotten that my counterpart in the alliance belongs to a different company, […] in the joint-venture we have neighboring offices. […] There are weeks when we are always together because we have the same schedule, same meetings, and same training. At the end, the alliance allowed me to meet a friend and not just a counterpart colleague.

Trust is also based on intangible assets such as friendship, learning, the ability to adapt and adjust, and a good working atmosphere that breaks down barriers between partners. In this regard, an alliance manager (case 5) notes:

We started as friends, and since the alliance, after all the adjustments, is starting to bring added value, we continue to be so to the point that we no longer notice the line between our businesses. A good atmosphere and the utmost trust make us forget that we are not employees at the same company.

Table 4 presents a synthesis of the findings presented above along with Figure 6 which provides an overview of these findings.

Figure 6. The trust-building process in strategic alliances
Source: Own elaboration.

MGMT-27-8301-F6.jpg

Table 4. Summary of findings
Cases Antecedents and dynamic capabilities of building trust within the alliance life cycle
Stage 1
Partner selection
Stage 2
Negotiation
Stage 3
Commitment
Stage 4
Execution
Building trust
Case 1 Reputation Objectives set

Resources and contributions value
Type of contract

Formal announcement of alliance

Management of the teams
Objectives and Resources upgrading

Methods and practices improvement

Contracts renegotiation

Teams’ relationships development
Increasing level of trust
Case 2 Reputation Objectives set

Resources and contributions value

Mode of cooperation
Type of contract

Formal announcement of alliance

Management of the teams
Upgrading of objectives and resources

Improvement of methods and practices

Contract renegotiation

Teams’ relationship development
Increasing level of trust
Case 3 Direct personal contact Objectives and resources not set Type of contract

Formal announcement of alliance

Management of the teams
Upgrading of objectives and resources

Improvement of methods and practices

Contract renegotiation

Teams’ relationship development
Increasing level of trust
Case 4 Reputation Objectives and resources not set Type of contract

Tensions and conflicts
Tensions and conflicts Increasing level of distrust
Case 5 Prior exchanges Objectives set

Resources and contributions value

Mode of cooperation
Type of contract

Formal announcement of alliance

Management of the teams
Upgrading of objectives and resources

Improvement of methods and practices

Contract renegotiation

Teams’ relationship development
Increasing level of trust
Alliance dynamic capabilities Sensing Sensing

Aligning

Adapting
Negotiating

Aligning

Configuring

Adapting
Aligning

Adapting

Negotiating

Learning
Trust building capabilities
Source: Own elaboration.

Discussion

Following previous studies (e.g., Khalid & Ali, 2017; Lascaux, 2020), our results show that trust is not a static concept. Nor is it just an informal mechanism or an alternative to a formal contract. Trust is co-constructed between the partners and evolves from the early stages of the alliance. Beyond this, the process of building trust both builds on the antecedents of each stage of the alliance life cycle and interacts with specific dynamic capabilities.

During the partner selection stage, direct personal contact, prior exchanges, and the reputation of partners shape the initial perceptions of trust. This relies on the capability of partners to ‘sense’ opportunities (Eisenhardt & Martin, 2000; Teece, 2000). Then, during the negotiation stage, trust is consolidated through the utilization of the capabilities of ‘sensing’ and ‘aligning’ the objectives, resources and cooperation mode for the new alliance, and ‘adapting’ the value of contributions of each partner.

The level of trust built during the two previous stages is reinforced during the commitment stage through the type of contract and the formal alliance announcement. During this stage, the partners mobilize their capability of ‘configuring’ the type of the alliance contract, and the formal announcement of alliance. They also continue to mobilize alignment and adaptation capabilities, refining those associated with negotiating capability. Also, the operational aspects begin to intervene at this stage through the efforts made to configure the teams and announce the execution phase. This helps to consolidate the level of trust between the partners, but in some cases can lead to tensions and certain reconsiderations. During the execution stage, building trust depends mainly on the partners’ capability to ‘adapt’ resources, objectives, methods and practices, team management, and, in some cases, to make contractual adjustments. This principal capability is added to the ever-present ones of alignment and negotiation, resulting in a capability of learning.

A first observation concerns the progressive growth and development of capabilities as trust is established between partners and as their relationship develops. This reflects a cumulative process of strengthening partners’ dynamic capabilities. Thus, trust levels clearly depend on the early stages of partner selection but are also reinforced throughout the alliance life cycle (Inkpen & Currall, 1998). Our findings confirm the dynamic nature of trust (Boersma et al., 2003; Zaheer et al., 1998) and make it possible to strengthen the analysis of the links between the antecedents and the capabilities for building trust between partners.

Based on our analysis of the trust development process, which we perceive as a dynamic construct influenced by specific antecedents at every stage of the alliance’s life cycle, as well as by the cultivation of dynamic capabilities, we present the following conceptual framework (Cf. Figure 7):

Figure 7. Antecedents and dynamic capabilities for a dynamic analysis of trust-building process: proposition of a framework
Source: Own elaboration.

MGMT-27-8301-F7.jpg

Three main contributions can be drawn from our research. The first concerns the dynamic process of building trust. The second concerns the distinct nature of the antecedents related to each of the stages of the alliance, while the third concerns the non-linearity and the recursive nature of the process, through the lens of dynamic capabilities.

First, our results confirm the distinct nature of antecedents according to the stages of the alliance life cycle. In line with many previous studies (e.g., Boersma et al., 2003; De Jong & Klein Woolthuis, 2008; Silva et al., 2012), we determined that the antecedents of trust are both linked to the structural specificities of the partners and the alliance as well as the interpersonal and interorganizational relationships between the alliance members, which evolve from one phase to another. This reinforces the need to combine organizational and relational approaches in the analysis of trust. We highlight that building trust is an evolutionary and iterative process, and parallel to the life cycle of the alliance in that it relies on the level reached in previous stages. Thus, our contribution goes beyond the results of previous studies on the dynamics of trust building, by first associating the organizational and relational aspects of alliances and partners, and by establishing a linkage between the antecedents of building trust throughout the alliance life cycle through an iterative and evolving process.

Second, we highlight that building trust is an evolutionary and iterative process, a cumulative and parallel to the life cycle of the alliance in that it relies on the level reached in previous stages. With the first two groups of structural and social antecedents, alliance dynamic capabilities help partners to consolidate the trust-building process throughout the alliance life cycle. This result suggests that partners learn to build and develop their mutual trust from the early stages of the alliance. The process of building trust therefore appears to be non-linear. Its level is on a continuum between mistrust and high trust, depending on the dynamics of the relationship, the structural and social antecedents, and the dynamic capabilities of each partner.

Third, and in line with the previous contribution, our findings highlight a non-linear, cumulative, and recursive character of the construction of trust, with the importance of the dynamics capabilities of ‘sensing’ (Barney, 1999; Teece et al., 1997), ‘aligning’, ‘negotiating’, ‘configuring’, ‘adapting’, and ‘learning’. These capabilities come into play simultaneously in different phases and relate to different resources: identifying partners and opportunities in the early phases of the alliance, adapting forms of governance, resources and the execution of cooperation, and (re)negotiating capabilities, the contract and the contributions and results expected by the partners. Thus, these dynamic capacities also contribute to the cultivation of learning capabilities (see Figure 6).

Our findings make it possible to provide a more realistic and recursive flow diagram. Indeed, the evolution of the alliance during the negotiation and execution stages gives rise to changes in the resources allocated to the alliance, the cooperation mode, the objectives, or leads to new negotiations between the two partners. In some cases, these changes lead to the revelations of objectives concealed by partners which cause tensions or even conflicts, altering the level of trust obtained so far.

Thus, the partnership often seems to make steps backward until there is a renewed mobilization of the capabilities and the social and structural antecedents. These two antecedent groups are not ‘actuated’ symmetrically throughout the alliance life cycle. Social antecedents belong more to the ‘relational’ skills of the partners. They are decisive during the early stages of the alliance life cycle (partner selection and negotiation). Structural antecedents call on organizational abilities. They determine trust building during the negotiation stage, but especially during the commitment and execution stages. Nevertheless, and even if it does undergo some setbacks, the trust level seems to increase overall with the evolution of the alliance over time.

The trust-building process is neither linear nor static. The different phases of the alliance life cycle are interconnected through the level of trust established, the evolution of antecedents from one phase to another, the development of dynamic capabilities, and by the construction of the alliance itself. This embodies a holistic understanding of the simultaneous development of trust and the alliance itself.

These three contributions, distinguishing the antecedents and emphasizing the dynamic nature of the process of building trust, allow us to provide an important research perspective related to the capabilities and the learning dimension of building trust. The capabilities developed throughout the alliance life cycle demonstrate that trust is not an addition of the previous levels but rather an in-situ development passing through phases of adaptation and reinforcement and sometimes through stages of tension and management. In other words, we argue that the level of trust also depends on the specific process of its construction, on the capabilities of the partners, but also on the way of combining them throughout the alliance life cycle.

Partners must build trust and develop specific skills in this regard. This means that certain partners, attesting to significant partnership experience or substantial learning skills, will arrive in a new alliance with trust development and management capabilities already acquired and emerged. The combinations of skills for the development of these dynamic capabilities, their interactions with the antecedents of the construction of trust, and the development of distinctive capabilities related to trust through processes of learning, make it possible to consider the development of dynamic trust capabilities. This is an important perspective to test empirically.

For future research, we propose to define these trust capabilities as a combination of distinctive skills that a firm develops throughout its alliance with another partner to increase the level of trust. These skills, which cannot be transferred to other structures, can nevertheless be mobilized by the firm, partly in other collaborative relationships.

Conclusion

Our research aimed to analyze the trust-building process during the stages of the strategic alliance life cycle. We have been explicitly interested in studying the antecedents of trust and the capabilities necessary for its development. This responds to a need expressed in several previous studies calling for more longitudinal studies to show the dynamic nature of trust in this context (Boersma et al., 2003; Khalid & Ali, 2017; Robson et al., 2019), beyond examining its effects on the performance of strategic alliances.

Our study contributes to the vast strategic alliance literature, particularly by confirming the co-constructive, evolutive, and dynamic nature of trust (Khalid & Ali, 2017; Lascaux, 2020; Nielsen, 2004; Zaheer et al., 1998). Several distinct factors come into play to varying degrees in consolidating the level of trust achieved in previous stages. They relate to both alliance life cycle and alliance dynamic capabilities. Trust-building antecedents are diverse in nature and occur distinctly during the different phases. As highlighted by previous studies, they are social (prior exchange, reputation, direct contact) or structural (contract, cooperation mode, methods, and practices). Our results particularly show that the process of trust building also depends on alliance dynamic capabilities, namely sensing, alignment, configuring, adaptation, and learning. These capabilities reflect the dynamic, evolving, and co-constructive nature of the process of building trust throughout the alliance life cycle.

Thus, the process of building trust carries the risk of being called into question when tensions arise or when opportunistic or uncommitted behaviors appear between partners. The dynamics are then engaged in an iterative process that mobilizes capabilities of sensing, aligning, configuring, and adapting. The interaction of the antecedents with these capacities at each of the stages, makes it possible to develop the level of trust between the partners.

At the theoretical level, our results show the importance of the sequential reading of the development of trust throughout the life cycle of the alliance, but also of the analysis of the interactions between the antecedents of its emergence and the necessary capabilities to its construction. Thus, our results have made it possible to propose a conceptual model linking the stages of the alliance life cycle, the antecedents, and the dynamic capabilities needed to build trust that future research could empirically validate.

At the managerial level, this research provides partners with suggestions for deploying antecedents to strengthen trust-building starting from the partner selection stage. These antecedents involve reputation, direct personal contact, prior exchange, partners’ objectives, resources, and contributions value, as well as mode of cooperation, type of contract, etc. Our results also suggest that antecedents alone are not enough to maintain a high level of trust. This process requires specific dynamic capabilities for each alliance stage.

Our research has limitations. The first is conceptual and concerns the non-inclusion of the different types of trust (i.e., promissory, goodwill, and competence-based trust) when examining its constructive process. The second limitation relates to the non-measurement comparison of partners’ mutual trust during the four stages of alliance evolution. Another limitation concerns the effects of the partners’ ‘country of origin’ on the development of trust. Even if this was clearly ruled out from the inception of the research, the comparison of these effects could have informed us about the building of trust between partners from different national cultures. In addition, our cases are asymmetrical alliances which could make the process of building trust even more difficult due to the organizational and relational specificities of the partners. Even if some studies have shown that the dynamics of trust are not affected by asymmetry between partners, others indicated the possibility of developing a complex and specific process of trust despite asymmetries between them (Mahamadou, 2017). Our final limitation is also methodological, inherent in the approach adopted (case study) as it reduces the generalizability of the results obtained.

Despite these limitations, our research proposes several avenues for future research. The analysis of feedback on the different phases of building trust in relation to other ‘events’ that may take place during the alliance life cycle provides information on the non-linearity of the process. The analysis of the effects of the trust dynamics for each phase on alliance issues (performance, survival, failure) also leads to relevant managerial suggestions for strengthening trust between partners. Future research should incorporate specific measures of learning outcomes for the development of trust-building capacities to allow a better understanding of the interactions between the two constructs and the process of building trust in a strategic alliance. Finally, with the development of specific capabilities for trust building, partners gain access to valuable relational capabilities that they can leverage to understand instances of mistrust, thereby mitigating the potential for conflict or tension in their future alliances. Examining the utilization of specific capabilities to understand and anticipate the effects of defiant or opportunistic behavior represents a promising avenue for future research.

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Appendices

Appendix 1. Interview respondent profiles

Case

Respondents’ profile and firm (partner 1-P1 or partner 2-P2)

Date of interview

Duration of interview (min)

1

Head of alliances and partnerships (P1)

2013

80

World alliance director (P2)

2013

70

Manager of alliances (P1)

2019

60

Local alliance manager (P1)

2013

73

Global alliance manager (P2)

2013

67

Manager of partnerships (P2)

2019

58

2

Alliances director (P2)

2019

88

Alliance manager (P1)

2013

69

Alliance manager (P1)

2013

74

Global alliance manager (P2)

2019

58

3

World alliances director (P1)

2013

55

Head of alliances and partnerships (P1)

2013

79

Director of partnerships (P1)

2013

59

Alliances director (P2)

2019

58

Global alliance manager (P2)

2019

52

Local alliance manager (P2)

2019

63

4

Alliances director (P2)

2013

67

Alliance manager (P1)

2013

64

Alliance manager (P1)

2013

61

Alliance manager (P1)

2019

59

Manager of partnerships (P2)

2019

55

Manager of partnerships (P2)

2013

88

Manager of partnerships (P2)

2013

82

5

Alliances director (P2)

2013

89

Global alliance manager (P1)

2019

91

Global alliance manager (P2)

2013

76

Local alliance manager (P1)

2013

93

Local alliance manager (P2)

2019

84

Source: Own elaboration.

Appendix 2. Data coding process

Stages of strategic alliance

Research corpus

First-order concepts

Second-order concepts

Sources of second-order concepts

Aggregate categories

The partner selection stage

  • Interview


‘The decision to form an alliance came during a meeting between our CEO and his classmate. […] There are personal relationships that exist before the alliance is created. […]. The CEOs are two good friends who have known each other from college. Our CEO is very vigilant about an alliance decision. He prefers the company of his friend in whom he can trust.’ (Global alliance manager, case 3, P2)

Direct personal contact

Boersma et al., 2003

Sensing

  • The ASAP France conference


‘It is a partner with whom we have had an alliance which lasted 10 years, together we have built common know-how and working methods.’

Prior exchanges

Boersma et al., 2003

  • Interview


‘We start from the principle that you never change a winning team. We seek among our former partners the company that can bring us added value. With which we have already won before. Our previous alliance lasted 10 years, so we know each other well.’ (Global alliance manager, case 5, P1)

  • Interview


‘When we received the proposal from our prior partner, with whom the old alliance lasted 10 years and we made more than 3 million euros in profit, we can only be interested and delighted to start a new adventure with him.’ (Alliance director)

  • Interview


‘Selecting a partner is a tedious process because you have to find a company with objectives compatible with ours […].’ (Alliance manager, case 2, P1)

Reputation

Boersma et al., 2003

Khalid & Ali, 2017

Korsgaard et al., 2018

Lascaux, 2020

  • Interview


‘Finding the rare pearl is a hard work! […]. Generally, good companies, known by good alliance experiences, send a signal to potential partners that they have a culture of alliance management.’ (Head of alliances and partnerships, case 1, P1)



‘Our team saw a need for collaboration to develop skills in X software […] I attended the trade show to meet people, and why not future partners […]. While discussing with her alliance director, I discovered that our goals were shared […] the managers of the two partner companies are certified CA-AM and that was the clincher for the new alliance!’ (Partnerships and alliances director, case 1, P1)





‘I consulted company websites, directories, and associations, then I selected several companies, leaders in the sector… Before contacting them, I checked their alliance relationships […] especially that they are not ‘friends’ with our competitors, otherwise we could never trust them. Indeed, being a member of these associations implies a culture of alliance rooted in the company.’ (Global alliance manager in case 2)

The negotiation stage

  • Interview


‘We held meetings. The objective is to fix the teams, the deadlines set, the schedule, and results achieved build a social bond and personal relationships.’ (Alliance director, case 2)

Objectives set

Concept emerging from the research corpus

Sensing

Aligning

Adapting

‘[…] Our partner is open to all negotiations to align objectives.’

  • Interview


‘We have adapted well to the alliance. We have aligned our teams with the needs of the collaboration. We have appointed a team, an alliance manager and selected the support services that will be dedicated to this new alliance. We have also assigned a lawyer to this task. In addition, together we have determined the list of industrial supplies.’ (Director of strategic alliances, case 1)

Contributions and considerations

Concept emerging from the research corpus

‘The start of an alliance is like the start of a relationship: first you have to adapt to the partner’s rhythm […] We continue to ‘feel’ – this time by looking for the right mechanisms to implement, the appropriate frequency of meetings, the channels of communication […] all to align ourselves with the partner and the needs of the alliance, and to demonstrate our commitment and win their trust.’ (Alliance manager, P1)

‘Negotiations are based on the principle of taking only after giving, in order to demonstrate our goodwill as well as our ability to build alliances and to inspire trust in our partner.’ (Alliance management senior director, case 5)

‘Not committing to the alliance and not immediately specifying resource contributions made us doubt our partner’s ulterior objectives and opportunism.’ (Alliance leader, case 4)

‘At this stage, you need to prove your ability to align and adapt during work meetings to discuss everyone’s contributions, which is a good sign that inspires confidence.’ (Alliance manager, case 5)





‘We have trust and we want to take advantage of the learning acquired to make a joint-venture with our partner.’ (Director of alliances, case 5)

Mode of cooperation

Boersma et al., 2003



The commitment stage

  • Interview


‘To establish trust, we start by drawing up a clear, detailed contract, which is the fruit of our negotiations and efforts to adapt.’ (Alliance director, case 5)

Choosing the type of contract

Concept emerging from the research corpus

Negotiating Aligning Configuring Adapting

‘We ensure better communication to prove our transparency to our ecosystem and consolidate the partner’s trust with no room for any doubt.’ (Alliance director, case 5)

Formal announcement of alliance

‘Already in the previous stage, we were in conflict, now, we are in an outright standoff situation. […] our partner’s communications are fuzzy, […] ambiguity on all levels.’ (Alliance manager, case 4)

‘There are always doubts and reticence. These are obstacles to trust. To overcome this mistrust, I communicate our objectives, the resources to be allocated, the deadlines set, and the schedule to all our managers.’ (Alliance manager, case 2)

Management of the teams

‘At last things are becoming clear. The negotiations between top management are moving in the right direction, the sharing of minutes from these meetings […] all these elements have calmed the atmosphere, aligned the teams and inspired confidence.’ (Alliance manager, case 3)

‘The alliance necessarily goes through moments of tension, […] but beneficial tensions, because they help to build trust.’ In the same perspective, the alliance manager of the counterpart adds: ‘having tensions and going through waves of negotiations is essential before building a stone in the edifice of trust.’ (Alliance director, case 5, P2)

The execution stag

  • Interview


‘I keep checking that our objectives are aligned with the alliance objectives. […] Our partner must do the same on his side.’ (Alliance director, case 2)

Upgrading of objectives

Concept emerging from the research corpus

Aligning Adapting Negotiating Learning

‘I check that the objectives of the alliance are strategic for both my company and my partner. […] We have regular meetings to ensure that the objectives of the alliance are coherent.’ (Alliance manager, case 5)

‘We cannot be in a one-sided partnership where we are the only ones moving forward […], two years of negotiation. We have to change the lens and the prism […]. Our partner decides not to sue us, […] we become suspicious of his suspicious behavior.’ (Alliance director, case 4)

‘We cannot align our objectives if we do not have the resources and especially if we have real mistrust vis-à-vis our partner’s behavior.’ (Alliance manager, case 4, P1)

Upgrading of resources

Concept emerging from the research corpus



‘We feel the mistrust of our counterparts in view of our reluctance to mobilize the necessary resources.’ (Alliance manager, case 4, P2)



‘A joint-venture is a commitment in its own right, very different from a commitment in a capital alliance. So, with my partner, we have to add resources. We have to adapt to this new mode of collaboration.’ (Alliance manager, case 5, P2)







‘Our software is very powerful, it makes our life easier, so first thing: to benefit our partner we offer them training.’

Improvement of methods and practices

Concept emerging from the research corpus



‘We are friends, so things are much easier than if the partner was an unknown company.’ (Alliance manager, case 5)



  • Interview


‘We started at the commitment stage with a ‘draft contract’, now we are in a situation of trust, things are much clearer so we can define a very detailed contractual corpus.’ (Alliance manager, case 2)

Contract renegotiation

Concept emerging from the research corpus



‘The contract ensures a good atmosphere. It inspires trust.’ (Alliance director, case 3).



  • Interview


‘At this stage, we are reaping the benefits of the efforts made in the preceding stages, especially in terms of building trust.’ (Alliance manager, case 2)

Teams’ relationships development

Concept emerging from the research corpus



‘I have often forgotten that my counterpart in the alliance belongs to a different company, […] in the joint-venture we have neighboring offices, […] there are weeks when we are always together because we have the same schedule, same meetings, and same training. At the end, the alliance allowed me to meet a friend and not just a counterpart colleague.’ (Alliance manager, case 5)

‘We started as friends, and since the alliance, after all the adjustments, is starting to bring added value, we continue to be so to the point that we no longer notice the line between our businesses. A good atmosphere and the utmost trust make us forget that we are not employees at the same company.’ (Alliance manager, case 5)



Source: Own elaboration.

Appendix 3. Press release relating to the announcement of the collaboration (case 1)

MGMT-27-8301-F8.jpg

Appendix 4. Notes of an ASAP meeting on 06/27/2015

MGMT-27-8301-F9.jpg

Footnotes

1. A first synthesis of studies containing models of interorganizational trust and/or measures of interorganizational trust was made by Adams et al. (2010), based on a selection of thirty articles.

2. The Association of Strategic Alliance Professionals (ASAP) is a nonprofit, global membership organization for partnering professionals in all industries who manage strategic alliances, ecosystems, go-to-market partnerships, key channel partner relationships, and other business collaborations. For more information, please visit: fhttps://www.strategic-alliances.org/

3. This information was collected at the ASAP France conference: ‘Are we really a partner of choice?’ which took place on Monday, June 27, 2011, from 7:00 p.m. to 9:00 p.m.

4. CA-AM: Certificate of Achievement – Alliance Management. ASAP. The Association of Strategic Alliance Professionals. https://www.strategic-alliances.org/ca-am

5. Adalec: Partner Business connection. http://adalec.gandi.ws/

6. Alliance Accenture-Avanade-Microsoft. Accenture. https://www.accenture.com/fr-fr/services/microsoft-index