Power asymmetry's effects on value creation and appropriation in multipartner alliances

Power asymmetry potentially affects multipartner alliances’ effectiveness, because it determines which partners have the right to make decisions. Extant research has shown that power and effectiveness are multidimensional concepts. However, very few studies have examined the effects of power asymmetry derived from different power sources on different effectiveness types. We investigate the impacts of power asymmetry, based on partners’ size, age and network centrality, on value creation and value appropriation in 409 alliances with multiple partners. These alliances received funding from Netherlands Technology Foundation STW between 2000 and 2004. We showed that network centrality asymmetry positively affects value creation, but negatively effects value appropriation. Another finding is that the positive relationship between centrality asymmetry and value creation is weakened by size asymmetry. We also find that the negative relationship between centrality asymmetry and value appropriation is weakened by age asymmetry. The findings clearly indicate that the structural (i.e. size and age) and relational (i.e. centrality) power dimensions are interconnected. Thus, scholars should conceptualise and measure them jointly instead of separately. The findings also suggest that partner composition should change along with a multipartner alliance’s goal, i.e. to create or to appropriate value.