The dynamics of multilateral allying: a process perspective on airline alliances

The paper argues that the development of airline alliances depends on airlines’ resource configurations and is furthermore a function of environmental constraints forcing particular types of airlines into certain choices; of conscious, rational strategy devising; and of the degree to which alliance membership it gains institutional legitimacy. Because the phenomenon under study can be understood as both social and technical, the study uses a dual theoretical approach. On one hand, the positioning of airlines in the alliance environment is examined using a resource dependence perspective. The mitigation of power imbalances in a formal network of firms, the benefits and dangers of specialisation and the management of interdependencies between partners will be discussed. The second perspective taken is that of institutional theory. Based mainly on interviews with senior airline management, the aim is to understand the institutionalisation of alliances, or how managerial perceptions drive the building of alliances. The paper concludes with the discussion of a model depicting the factors that influence the development of multilateral alliances between autonomous, but interdependent firms, accounting for both centripetal forces, pushing toward tighter member integration, and centrifugal forces, pushing for looser coupling.