A System Dynamics Model of Trust, Knowledge Sharing and Stability of Strategic Alliance

Purpose: We present a comprehensive framework of the key determinants of the stability in strategic alliances (SAS). Herein the relationship of triad: trust, knowledge sharing and stability is digged dramatically. Design/methodology/approach: We propose a dynamics framework of stability in SAS based on a review of the literature. The game theory concept is adopted in the conceptual framework. The simulation is based on the system dynamics and characterizes how the constituent elements of the strategic alliance behave. Findings: The major finding of this paper is that result from the literary verbal analysis can be transferred into a dynamics model which can be used to fulfill determinants of the stability of strategic alliance. Practical implications: Based on the framework, a number of propositions are developed to facilitate empirical research on trust, knowledge sharing and stability in SAS. Managerial implications from the framework are also discussed. Originality/value: The value of this paper is literary verbal analysis can be transferred into a dynamics model which can be used to fulfill determinants of the stability of the strategic alliance. We find out that in case of low trust and high level of the un-balance knowledge sharing the strategic alliance became extremely unstable and vise versa.