Charlotte R. Ren, Louis Mulotte, Pierre Dussauge and Jay Anand
ABSTRACT. We examine how a firm’s performance when implementing a given strategy drives it to persist with the same strategy or switch to a different one. We consider this question in the context of make-or-ally choices for new product introductions (NPIs). Drawing on performance feedback theory, we argue that a firm’s performance in the alliance mode has a U-shaped effect on its likelihood of switching to independent operations in the subsequent NPI and that competitive intensity strengthens this U-shaped relationship. We also predict that firms with above-aspiration alliance performance are more likely to achieve breakthrough performance in a subsequent NPI if they switch to independent operations. Data on NPIs in the global aircraft manufacturing industry support our hypotheses. Our study extends the alliance literature and contributes to research on how firm performance influences subsequent strategic choices.
Conditional acceptance, Strategic Management Journal.