It's Who You Know and What You Do: How SMEs from Emerging Economies Capitalize on Founder Ties to Create Bargaining Power with Foreign Multinational Alliance Partners

56 Pages Posted: 20 Jan 2016

See all articles by Kaitlyn DeGhetto

Kaitlyn DeGhetto

University of Colorado, Colorado Springs

Andrew Sutton

Independent

Tim R. Holcomb

Miami University

R. Michael Holmes

Florida State University - Department of Management

Date Written: January 19, 2016

Abstract

We examine the relative bargaining power in alliances between small- and medium-sized enterprises (SMEs) from emerging economies and multinationals from developed markets. Our work highlights the importance of founders’ personal ties, network positions, and the processes their firms use to manage resources. Specifically, we evaluate how SME founders’ ties with local government officials and business managers may serve as the conduit for value creation and SMEs’ bargaining power over foreign multinational partners. Further, this work explores the importance of resource management processes (bundling and synchronization) to enhance the value of personal ties. In doing so, we offer theory to demonstrate that SMEs’ bargaining power in strategic alliances is a function of the social relationships and resource management processes that underlie and shape the firms’ competitiveness and capabilities in emerging economies.

Keywords: emerging economies, alliances, bargaining power, founder ties

Suggested Citation

DeGhetto, Kaitlyn and Sutton, Andrew and Holcomb, Tim R. and Holmes, R. Michael, It's Who You Know and What You Do: How SMEs from Emerging Economies Capitalize on Founder Ties to Create Bargaining Power with Foreign Multinational Alliance Partners (January 19, 2016). Available at SSRN: https://ssrn.com/abstract=2718128 or http://dx.doi.org/10.2139/ssrn.2718128

Kaitlyn DeGhetto (Contact Author)

University of Colorado, Colorado Springs ( email )

1420 Austin Bluffs Parkway
Colorado Springs, CO 80918-7150
United States

Andrew Sutton

Independent ( email )

Tim R. Holcomb

Miami University ( email )

Farmer School of Business
800 E. High Street, 2075 FSB / MSC1148
Oxford, OH Ohio 45056
United States
5135293665 (Phone)

HOME PAGE: http://fsb.miamioh.edu/

R. Michael Holmes

Florida State University - Department of Management ( email )

United States

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