Determinants of Partner Opportunism in Strategic Alliances: A Conceptual Framework

We present a comprehensive framework of the key determinants of partner opportunism in strategic alliances. We propose an extended definition of partner opportunism and three categories of the determinants of partner opportunism based on a review of the literature. These categories comprise economic factors (equity involvement, asymmetric alliance-specific investments, mutual hostages, and payoff inequity), relational factors (cultural diversity and goal incompatibilities), and temporal factors (alliance horizon and pressures for quick results). The framework of determinants makes clear how the various determinants of partner opportunism may be differentially salient in the three major alliance types, namely, equity joint ventures, minority equity alliances, and nonequity alliances. Based on the framework, a number of propositions are developed to facilitate empirical research on partner opportunism. Managerial implications flowing from the proposed framework are also discussed. Although scholars in various disciplines have studied the general topic of opportunistic behavior, our understanding of partner opportunism in strategic alliances appears to be fragmented and inadequate. As partner opportunism is acknowledged as a significant threat to alliance survival and success, a comprehensive framework of the key determinants of such opportunism should improve our understanding of this phenomenon and to also provide an impetus for future research. The article also responds to the need of alliance managers for a framework of key factors that are responsible for partner opportunism so that they may be able to deploy appropriate deterrence mechanisms to minimize opportunistic behaviors.