Alliance management capability in family business: evidence from a politically instable economy

We have a lack of understanding of the role of socioemotional wealth (SEW) in determining the success of alliances formed by family firms. By integrating the theories of SEW of family businesses and alliance management capability (AMC) of strategic alliance literature, this study investigates how the extent of SEW in family firms operating in politically instable contexts influences the development of AMCs, which in turn acts as a determinant of alliance success. By developing a unique data set from 302 family firms in politically instable Libyan context, we found that the greater the SEW of family firms, more likely they are to develop AMC routines: namely, alliance proactiveness (firms’ ability to identify valuable partners for alliances), alliance coordination (firms’ ability to manage the relationship with alliance partners), and alliance learning (firms’ ability to learn from alliance partners), capabilities, which in turn increases the success of alliances formed by family businesses. We also found that the level of political instability confronted by family businesses positively moderates the relationship between the extent of, SEW and, AMCs. Our results also generate useful practical implications to family businesses, their strategic alliance partners and policy makers involved in supporting family businesses.