Decision making within and between organizations: Rationality, politics, and alliance performance

This study extends research on strategic decision making into the realm of strategic al-liances by examining the interactive effect of decision process characteristics at the firm and al-liance levels on alliance performance. Located both within and at the boundary between partners, alliance-related decision processes have to balance each partner's self-interest on one hand and collective actions on the other hand, with both partners being dependent on each other's collabo-ration. Using primary, cross-sectional data obtained from 103 high-technology alliances, we study the effects of procedural rationality and politics in decision making. Our results corroborate the importance of procedural rationality that facilitates collective actions between alliance partners, but also uncover the pitfall of an unconditional reliance on procedural rationality at the firm level. Our results further show that politically charged decision processes impair decision makers' ability to reconcile individual interests both within and between alliance partners, and therefore jeopardize alliance performance.