Study On Governance Structure And Governance Mechanism Of Mobile Service Alliance

After the Internet, mobile Internet as a new driving force of technological change creates a new environment interface for organizations. New technology, new markets, new competition and new consumer demands, significantly changes the way enterprises create value in economic activities. In this situation, there emerge extensive alliance phenomena between the mobile communications industry and other relevant industries. And around these complex phenomena, the study on effective partnership development and management is still lagging behind industrial practices.The alliance governance is essential to the success of alliance (Yoshino and Rangan, 1995). Governance is related to a series of major organizational decisions:choice of alliance structure, alliance operation process, control mechanisms, and even alliance termination (Das and Teng,1996). Especially in the high-tech industries where undergoes the rapid technological changes, it puts forward higher requirements for companies to design their organizational structure and governance mechanism. This paper mainly studies inter-organizational cooperation in the context of mobile commerce. Taking mobile commerce alliance partnerships based-on vertical value chain as research subject, this paper aims to explore the following questions:1) what are the environmental characteristics and partnership characteristics of alliances; 2) What is the role of aforementioned characteristics in determining the design of inter-organizational relationships, and further affecting the choice of alliance governance structure; 3) For focal firms, how to design effective inter-organizational governance mechanisms-such as the incentive mechanism and dynamic governance mechanism to overcome the members' opportunism, and to better respond to the volatile environment.In view of these questions, this paper's main work and contributions focus on the following areas:First, through 146 strategic investments and mergers and acquisitions (M&A) cases involved mobile communication industry, this paper portrays the evolution of mobile commerce value chain in China, the trends and future direction of value chain evolution are also given. On the basis of the value chain analysis, a number of important features of alliance are extracted, including environmental characteristics, such as technological uncertainty and demand uncertainty as well as partnership characteristics, such as network related, portal-dominant, asmmetry, and virtuality.Second, this paper studies the governance structure choice in mobile business alliance empirically. By introducing a salient construct of cross-border organizational design-business model into governance structure choice between value-added services providers and their trading partners, this paper studies how two different value creation way:innovation-centered and efficiency-centered business model design affect the governance form, establish structural equation model (SEM) and use 83 mobile service providers survey data to test the model. The results show that novelty-centered business model (NCBM) matches the relational governance, efficiency-centered business model (ECBM) relates to the hyerarchical governance; and technical uncertainty and demand uncertainty positively related to adoption of NCBM and ECBM respectively.Third, this paper studies the formal governance mechanisms aiming at reducing opportunististic risk of mobile commerce alliance members-incentive mechanism. This paper establishes a multi-agent model under the binary-task. A hybrid incentive mechanism including credit rating and profit sharing is proposed to solve the principal-agent problem between the focal firm and members in mobile business alliance. Model indicates that the proposed incentive mechanism can achieve better performance while eliminating the risk of members'opportunism. The conclusion is validated by a simulation sample, as well as a real case between mobile operators and service providers.Finally, this paper studies the dynamic governance of mobile business alliance portfolio from the perspective of real options. By constructing an option model with mobile operator and two SPs, this paper examines the value of flexibility of a contractual alliance portfolio. Then taking the decision making problem of a mobile business alliance portfolio for example, the option value of dynamic portfolio governance is proved based on real option approach. Results indicate alliance portfolio governance is an contingent process for dynamic decision- making, which enable operators to maximize the alliance portfolio returns. In addition, when two alliances engage in positive-related business, the portfolio strategy can enhance the option value of alliance further.