The Evolution Of Embeddedness Within The Alliance Structure In A Non-Equity HospitalIty Alliance | Prakash K. Chathoth

This paper develops the conceptual underpinnings of how embeddedness within a strategic alliance develops, which forms the basis for the growth of different forms of alliances. These underpinnings are used to develop propositions, which are: P1(a): The alliance structure that firms use in order to define their role/relationship and the manner in which they combine resources to tap market opportunities will evolve, as competitor firms imitate such successful combinations of resources and alliance structures. P1(b): The trend of this evolution will be in the direction of more complex resource-sharing relationships that need to be created to tap new opportunities. This will create an evolutionary path of alliance structures ranging from simple to more complex alliance structures. P2: As organizational alliances evolve into more complex resource-sharing entities, the nature of the relationship between incumbent firms within an alliance will evolve from revenue maximizing functions to one that involves revenue maximizing accompanied by cost minimizing functions. Examples from the airline industry are used to support the propositions, followed by a discussion on implications for the lodging and restaurant industry managers.