Analysing Management Capabilities Interface on Governance and Performance in Pharmaceutical Alliances Context

Abstract

Strategic alliances have become a vital tool for organizations seeking competitive advantage, innovation, and market expansion—particularly in dynamic sectors such as pharmaceuticals. Despite their growing prevalence, many alliances fail to deliver expected outcomes, often due to insufficient alliance management capabilities (AMC) and ineffective alliance governance (AG). While AMC and AG have been examined individually in prior research, their combined impact on alliance performance remains underexplored. This study addresses this gap by investigating the interrelationships among AMC, AG, and Strategic Alliance Performance (SAP) in the pharmaceutical industry. Grounded in dynamic capabilities and governance theories, a conceptual model was developed and empirically tested using survey data from 193 alliance professionals in pharmaceutical firms. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to evaluate the model and test the proposed hypotheses. The results indicate that AMC significantly influences both AG and SAP, while AG also positively affects SAP. Specifically, AMC accounts for 32.1% of the variance in SAP and 30.4% of the variance in AG, whereas AG explains 52.2% of the variation in SAP. These findings underscore the central role of AMC in shaping governance structures that enhance alliance performance. This research contributes to the literature by integrating AMC and AG into a unified framework, offering theoretical clarity on how capabilities translate into performance through governance mechanisms. The study also responds to recent calls for empirical tools to measure AMC and evaluate its strategic value. From a practical perspective, the results suggest that pharmaceutical firms can improve alliance outcomes by strengthening internal capabilities that support governance design and implementation. Overall, the study highlights the dynamic interplay between managerial capabilities and governance structures in determining the success of strategic alliances. It provides both academic and managerial insights into how firms can better manage interorganizational partnerships in complex and uncertain VUCA (Volatile, Uncertain, Complex, and Ambiguous) environments.