Abstract:
This thesis investigated the goals, and the role of the governance mechanisms, in alliances between large Chinese pharmaceutical firms and smaller Australasian biotech firms established in an uncertain biopharmaceutical industry. Asymmetric strategic alliances between small biotechnology firms and large pharmaceutical firms have emerged to provide firms complementary resources. Alliance firms aim to utilise the partner firms' resources to achieve its strategic goals. However, the conflicting interests that individual firms pursue need integrating into shared goals through certain governance mechanism approaches, namely trust and control. They are argued to effectively manage the alliances as substitutes or complements to each other. How such relationships are best governed given the environmental uncertainty is still not well understood. The qualitative research conducted included nine in-depth interviews with eight management executives and managers from both Australasian and Chinese biopharmaceutical firms, and one industry expert. The findings indicate that Chinese and Australasian biopharmaceutical firms are motivated by four major factors: financial payoff, complementarity, commitment and trust. Despite these similarities they were found to have different goals. Patterns of trust between alliance firms were investigated with the findings suggesting that control and trust are complementary during the most of an alliance but, at the initial stage of alliance, are viewed as substitutes. Three dimensions of environmental uncertainty were also investigated; they are perceived differently by the Chinese and Australasian firms and are shown to impact differently on trust and control. The thesis concludes that biopharmaceutical firms in an alliance partnership need to understand the different perceptions of each partner and develop strategies for the governance approaches to address ambiguities rising in their environments.
