Hybrid Administrative Interfaces: Authority Delegation and Reversion in Strategic Alliances

Abstract

Steering committees are pivotal for governing complex collaborations by consensus to facilitate coordination and knowledge sharing. Although consensus-based governance promotes mutuality, it can also cause deadlocks, stalling expeditious decision making. We examine the conditions under which alliance partners delegate decision-making authority to steering committees as well as the conditions under which authority over discordant matters can be relocated to one of the alliance partners. We argue that joint coordination concerns increase the likelihood of authority delegation, whereas the higher costs and stakes associated with decision stalemates provide grounds for authority reversion. Empirical analyses of strategic alliances in the biopharmaceutical industry support our arguments. Our paper demonstrates the versatility of contractually defined administrative interfaces in alliance governance, allowing partners to coordinate bilaterally and adapt hierarchically as and when required.