Study Of The Interconnection Between Trust,Control And Risk In R & D Alliance

With the acceleration of the process of world economic integration and rapid development of technology since 1980s, strategic alliance has been gradually replacing the traditional way of business, becoming a new means of competing in today’s new world. As a new way of cooperation, strategic alliance greatly shortens the life-cycle and R&D cycle of products, better meets the needs of customization and makes organizational goals shifting from traditional resources and location to the comprehensive development of the organization and improvement of its core competitiveness. What’s more, in high-tech fields, via such a groundbreaking cooperation norm, organization can dramatically lower the uncertainties of developing new technology in new areas and improve its capability of controlling risks involved. On a global scale, there are more and more influencing strategic alliances which enable its companies significantly improve their capabilities of acquiring external resources and improving core competitiveness. However, as a new organizational structure, strategic alliance has only been in business practice for several decades. Although countless companies achieve their goals in a win-win situation through strategic alliance, there are many alliances running in a low efficiency status, and some of them eventually eliminated by rivals in the end. Some studies show that the main reason of strategic failure lies on inappropriate management. Insufficient perception of alliance risks leads to the increase of uncertainties which makes companies involved have to pay great price of business failure of such kind. Therefore, what is called for is one in-depth study of alliance risk which will be of great help to maintain alliance stability that is related to not only its companies, but also the performance of the alliance itself. According to prior research of strategic alliance, the risk in alliance will be determined by two independent factors, namely control and trust. Nevertheless, the interaction mechanism among control, trust and risk is still in question. In this paper, based on prior achievements in the field of strategic alliance, and from the view of resource theory, transaction cost theory and social capital theory we will exam the internal relationship between control, trust and risk in R & D alliance. According to the valid data collected from China’s mobile industry, we provide a comprehensive framework of these three and study their interplay mechanism, and up to a point try to make some contributions to this field.The structure of this paper consists of five chapters. In chapter one. we introduce the relevant research background and probe out our research objectives. As stated above, the world economic integration and rapid development of modern technology make strategic alliance a must in today’s business world. Lots of relevant research shows that strategic alliance can greatly improve the performance of the companies. However, the failure rate of alliance, especially that of R & D alliance is always far from satisfaction. Therefore, the in-depth research of alliance risk is of not only theoretical value, but also practice value. Chapter two is a literature review. There are already a great number of studies of strategic alliance and the relationship between control, trust and risk. Even till now, this topic is still hot in academic area. All these theories represent different stances, illustrating the interplay of control, trust and risk in strategic alliance from different angles. From the perspectives of resource-based theory and transaction cost theory, in chapter three we empirically study the effect of informal control (information sharing, justice and interdependence) on performance risk and that of formal control (contract control and conflict control) on performance risk in strategic alliance. And in chapter four, based on the same empirical data, we empirically study the interplay of control, trust and relational risk in strategic alliance. Based on the conclusions from the two empirical studies, in chapter five we provide corresponding suggestions for R & D alliances in China’s auto mobile industry. Finally, in chapter five, according to aforementioned conclusions, we conclude the whole paper in a holistic view, discuss the limitations of this study and provide specific suggestions for future study. In this paper, we empirically find that Information sharing and justice has a significant negative effect on performance risk and relational risk in R&D alliance; interdependence has a significant negative effect on relational risk; contract control and conflict control has a significant negative effect on performance risk and relational risk in R & D alliance; except for interdependence, informal control and formal control has a significant positive effect on trust in R&D alliance and trust has a series of mediating effects on the relationship between control and risk.