A behavioral theory of alliance portfolio reconfiguration

Extant research suggests that firms rationally evaluate external and/or internal contingencies when deciding how to reconfigure their alliance portfolios. We advance a behavioral perspective which assumes that managers are boundedly rational and thus rely on behavioral heuristics when making alliance portfolio reconfiguration decisions. In panel data on U.S.‐listed biotechnology firms, we find that below‐aspiration performance motivates a firm to form alliances with novel partners within the resource scope of its existing alliance portfolio. This effect is weakened by equity ties with existing partners and strengthened by firm‐specific uncertainty. Conversely, above‐aspiration performance leads to new alliances with existing partners but outside the resource scope of the firm's existing alliance portfolio. Finally, as organizational slack increases, a firm forms alliances with novel partners focusing on new‐to‐the‐portfolio resources.

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