A Model of Response Strategies in Strategic Alliances: A PLS Analysis of a Circumplex Structure

The few studies investigating partners' response behavior in strategic alliances often fail to provide empirical support for a large proportion of the relationships they hypothesized. This discrepancy between theory and empirical findings could be attributed to a misconceptualization of response strategies as independent from each other. Indeed, response strategies could be better conceptualized as a circumplex structure rather than as discrete responses. Whereas the circumplex structure of response strategies has been empirically established, it has not yet been taken into account when detecting the effects of potential antecedents on response strategies. A model that accounts for the circumplex structure thus should exhibit superior explanatory power by reducing Type II error. PLS path modeling is particularly suited to substantiate the superiority of such a model, however PLS path modeling as implemented in extant software is not equipped to estimate circumplex structures. Therefore, the objective of the present study is twofold. First, we extend PLS path modeling so that it can handle circumplex structures. Second, building on a circumplex structure of response strategies, we develop and test a model of alliance partners' response strategies and key antecedents. The results of a survey of alliance managers corroborate our expectations and demonstrate that non-significant antecedents become significant when accounting for the circumplex structure. This study thus advances PLS path modeling and contributes to a better understanding of managers' complex decision-making processes in strategic alliances.