The Role of Risk in New Product Alliances: Implications on Governance Mechanisms and New ProductSuccess

The trend of forming alliances to develop newproducts continues; at the same time, however, manyof such new product alliances fail. The authorargues for the criticality of risk and riskmanagement in new product alliances and examines howvarious risk types intrinsic in these alliances canresult in the deployment of different governancemechanisms. Two specific governance attributes(contract explicitness and relational components) areanalyzed. Results from surveying high techorganizations should help shed some light on how eachtype of risks (performance risk, implementation risk,knowledge leaking risk, relational risk, andreputation risk) influences the use of governancemechanisms, which in turn significantly contribute tonew product success. Practitioners in strategicmanagement, new product development, and marketingshould find the results useful to help managing riskthrough appropriate governance.