The Research On The Relationship Between Institutional Distances And The Governance Mechanism Of Domestic Crossregional Strategic Alliance

Recently two or three decades, strategic alliances have been proved to reduce transaction costs, create more efficient innovation, reduce the risk of other aspects, which developing fleetly it in all the world. However, the high rate of failure in strategic alliances is also an indisputable fact. There are reports that more than 50% of the Union failed entirely due to inappropriate treatment resulting alliance. Therefore, the importance of strategic alliances governance is prominent and got more and more attention to the league managers. Meanwhile, it is a fact that the presence of local protectionism. Due to the China’s gradual experimental way to promote the reform of decentralization. In China’s market, there is an obvious phenomenon region segmentation and market segmentation of existence led to a number of regional domestic institutional environment difference. While this may be one of the motivation for domestic enterprises into differences environmental, on the other hand,it also bring greater challenges to the governance mechanism in the alliance. Therefore, in the context of the domestic market segmentation, the question of discussing strategic alliance governance issues, has theoretical significance and practical value.Focusing on the transition system scenarios,this study bases on the " Transaction Cost Theory) ", "Resource-based view" and " Institution based view " and expanding the theoretical perspective Strategic Alliance. By this stage of the domestic market segmentation analysis conditions, institutional distance generated cross-regional alliance, building and governance mechanisms affect the mechanism chosen to explore the institutional differences(institutional distance) coalition partners across the region where the strategic alliance between the areas and strategic alliances the relationship between governance mechanisms selection and strategic decision-making for businesses across the region to build a strategic alliance to provide a theoretical basis. This study answers the three questions: Why is alliance an effective way to enter the inter-regional market? What impacts the way of cross-regional coalition building process in the choice of governance structure? What impact on the system away from the process of cross-regional alliances running Governance choose? Through discussion of the three issues above, it has drawn some proposition: in domestic market segmentation, the more institutional distance, the more likely to choose an equity alliance, and in the course of the alliance governance, the more likely to choose formal governance. In addition, the article also discusses the regulation of business skills and experience.Under the conditions of market segmentation and the institutional distance between the members,the research focus on how to choose the kind of coalition governance structure and control mechanisms. To maximize the presence of domestic inter-regional alliance while reducing management costs at the same time. While in the process, what kind of governance mechanisms able to obtain the value of the maximization, it can provide some guidance for the enterprise decision-making of domestic inter-regional alliances.