Corporate Reputation and Strategic Alliance Performance

Although there are studies that have conceptually and empirically studied the impact of corporate reputation on the performance of alliances, none of them have tested the intermediate effects that explain the processes through which this phenomenon occurs. The aim of this paper is to empirically test the role of interorganizational trust as a mediating mechanism through which reputation affects the performance of alliances. To accomplish the empirical test proposed, primary data were collected on 145 strategic alliances in the Brazilian pharmaceutical sector. The resulting data was analysed using the structural equation modelling technique (SEM), based on the partial least squares method (PLS). The conclusion is that part of the impact of the corporate reputation on alliance performance is determined indirectly by its effect on the interorganizational trust. When a partner meets the positive expectations of the other party due to its corporate reputation, it reduces the relational risk perceived and generates trust that the partner will not act opportunistically. This results in the reduction of the alliance transaction cost related to the need for control of the partner, leading to an increase in alliances’ performance. By the other side, we conclude that the direct effect is not clearly explained by the existing theory, leading to the need of future research that investigate this relationship.