Are ‘Green Brides’ More Attractive? An Empirical Examination of How Prospective Partners’ Environmental Reputation Affects the Trust-Based Mechanism in Alliance Formation

Abstract

There is theoretical and empirical evidence that firms’ environmental performance has ramifications for their appeal to various stakeholders. Yet, we know little about how this plays out in the context of strategic alliance formation. Stated differently, research is lacking on how ‘green’ prospective alliance partners are estimated by the initiating firm. This article employs strong environmental reputation as a proxy for high environmental performance and explores implications for the well-established alliance formation trust-based mechanism, under the strategic cognition perspective. The ensuing hypotheses are subjected to empirical scrutiny through an experimental method. A random sample of 138 CEOs and top managers of Norwegian manufacturing firms completed a scenario-based questionnaire. The results show that two out of three trust dimensions are affected and, moreover, that two out of three—but not the same—trust dimensions influence partner attractiveness. Several theoretical and managerial implications, and future research opportunities, are derived from the findings.

Appendices

Appendix 1

See Table 6.

Table 6 Sample description of alliance formation scenario

The alternative descriptions of the two manipulated variables are non-equity contractual alliance and ABC is perceived among its stakeholders as having a compliance-based environmental strategy. The firm is known for implementing environmental activities in its business operations only when these become mandatory by the law; it does not in any way strive to exceed such requirements in its environmental performance. Consequently, ABC has a rather neutral environmental profile among stakeholders.

Every respondent is presented with one scenario version only (randomly attributed).

Appendix 2

See Table 7.

Table 7 Scale items

Appendix 3: Pretests of Measurement Instrument

The measurement instrument (cf. Appendices 1, 2) was pretested on both academics and professionals (Krishnan et al. 2006). Four experienced academics were asked to comment on the entire questionnaire, which also includes questions on, e.g., alliances of the responding firms (cf. Appendix 4). Some changes were incorporated, mainly related to ambiguities or wording in the scenario and questions. Reducing item ambiguity is among the measures taken to reduce common method bias (Ibid.).

Subsequently, the questionnaire was administered to 34 CEOs, 1 COO and 2 divisional managers in manufacturing firms in the Western region of Norway during audio-recorded interviews (the Western region is responsible for ca 70 % of total GNP. A restricted geographical zone was selected due to research budget and time constraints). Here as well, some comments were incorporated. Preliminary statistical analyses showed the Cronbach’s alphas of the constructs to be acceptable, indicating that the constructs are reliable.

It should be noted that the hypotheses of this paper were developed strictly based on the literature, and not affected by the qualitative data obtained during the pretest interviews—treated as anecdotal evidence, as this is not a mixed-method study. Yet, these data provide some degree of informal triangulation; they have high consistency with the results.

Appendix 4: Descriptive Statistics on Final Sample Firms’ Alliances

• 44 % reported presently having strategic alliances;

• 64 % of the alliances are with a partner firm from the same industry;

• 52 % of the alliances are with a Norwegian partner firm;

• 10 % with other Scandinavian;

• 28 % other European;

• 10 % with partner firms outside of Europe;

• 41 % of the alliances are equity alliances (joint venture or minority equity investment);

• 56 % are non-equity contractual alliances (3 % did not report alliance governance type);

• 12 % are R&D only;

• 5 % manufacturing only;

• 21 % marketing only;

• 10 % R&D + manufacturing;

• 11 % R&D + marketing;

• 23 % manufacturing + marketing;

• 13 % all three (5 % did not report alliance governance type);

• Average age of the alliances is 6 years.