The Impact of Obfuscation on Strategic Alliance Formation: If You Can't Convince Them, Confuse Them?

Wolfgang Sofka, Pedro de Faria, Daniela Blettner, Florian Noseleit

    Research output: Contribution to conferencePaperResearchpeer-review

    Abstract

    Strategic alliances have become a major instrument for companies to create competitive advantage. Hence, the choice of alliance partners becomes an important but little studied part of firm strategy. In this paper we highlight the role of obfuscation, i.e., the degree to which firms conceal information by presenting themselves in an overly complex manner, and link it to the signaling of trustworthiness in strategic alliance formation. We hypothesize that obfuscating firms are less likely to be included in a strategic alliance and contrast these predictions with stronger signals from previous alliances. Based on a sample of pharmaceutical and biotech firms, we create a dyad-level panel-dataset of all potential and realized linkages to study firm?s partner choices. We find that, on average, obfuscation decreases alliance formation probability for those firms that lack previous alliance experience as a primary signal. This effect is dyadic in nature, i.e., particularly pronounced when experienced firms evaluate un-experienced partners. Our findings have important implications for impression management and perception engineering of firms which are new to industries or markets.
    Original languageEnglish
    Publication date2015
    Number of pages38
    Publication statusPublished - 2015
    EventThe DRUID Society Conference 2015: The Relevance of Innovation - LUISS Business School, Rome, Italy
    Duration: 15 Jun 201517 Jun 2015
    Conference number: 37
    http://druid8.sit.aau.dk/druid/registrant/index/login/cid/16

    Conference

    ConferenceThe DRUID Society Conference 2015
    Number37
    LocationLUISS Business School
    CountryItaly
    CityRome
    Period15/06/201517/06/2015
    SponsorLUISS Guido Carli - Libera Università Internazionale degli Studi Sociali Guido Carli
    Internet address

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