Procedural fairness in strategic alliances

1. Proceduralfairness in strategicalliances International Business and Development Università degli Studi di Parma Prof. Alessandro Arrighetti 2013/2014 Balan Irina Terzoni Luigia

2. Proceduraljustice: some general definitions • Idea of fairness in the processes that resolve disputes and allocate resources. • Organizationaljustice: from micro levelaspects to macro levelphenomena • Selection of the partnersfocused on social characteristics

3. Some General Definitions

4. The three types of justice in alliances extent to which interparty sharing of the reward from cooperation is fair • Proceduraljusticeas an instrument to determine each party’s trustworthiness and commitment in an uncertain environment. • Fostering of interfirm cooperation on the long-term basis extent to which interpersonal treatment and information exchange between top management representing each party are fair extent to which the strategic decision-making process and procedures that impact each party’s gains are fair

5. Proceduraljusticedefined in strategicalalliance Differences from the general definition: • justice perception arises from both parties rather than from a single party. • need to establish 2 way communication, mutual respect and courtesy in making and implementing decisions • transformation of perceptual justice into recommended actions by the top management representatives. • the processes that must be viewed as fair involve important areas such as alliance structuring, management, and interpartnersharing.

6. A theoritical model Social exchange equity instrumentality Strategic Alliance Performance InteractthroughIJ’s relational attachment

7. Justice theory: It Explains the process of interfirm cooperation

8. Relational model in justice theory Procedural fairness creates Cooperative value Relational Value

9. party’s opportunity to voice its views It includes party’s commitment to joint efforts Procerural Justice Theory Reduction of risks in Interpartner exchange

10. Favorable procedural justice involves group efforts for organizational affiliation and group unity alleviates interparty organizational differences It increases: 1.interpartner conformity • Identification • Internalization

11. Favorable procedural justice Collective control Cooperation It increases: 2) complementary effect

12. The role of boundary spanners They transform their perceptions of fairness into actions

13. Proceduraljustice information It helps to better understand: quality of decision making: related to the fairness of decision-making procedures quality of treatment: help people to evaluate the social atmosphere of the group

14. Justice theorists also suggest …. perceptions of fairness are amplified through: • Engagement: means involving individuals in decision-making processes; • Explanation: everyone involved should understand why final decisions are made; • Clarity of expectations: before, during, and after decisions are made, managers have a firm understanding of what is expected of them.

15. Procedural Justice Operational outcome Financial outcome On whichithas a Direct effect On whichithas an Indirecteffect isassociated with

16. Procedural Justice Contributes less to outcomes when interpartner cultural distance is shorter

17. Conclusion Importance of independenteffects of DJ, PJ, IJ …… alsointeractivelytheyfunctiontogether to improvestrategicalliances performance because the maycomplementoneanother in stimulatinginterpartyexchange. Proceduralfairnessisseenas a criticalstimulus for improvingcooperationoutcomes.

18. Thank you for your attention