How are alliances facing different kinds of risks best governed? Should their governance be based on control, or on trust? And are these two approaches complementary, or are they substitutes?
This article aims to assist the manager responsible for designing an alliance governance structure, and, at the same time, connects the complement/substitute debate with current thinking about the interaction between control, trust and risk.
Working from a four-quadrant framework to categorise high and low relational and performance risks, the authors examine the governance structures of five different alliances to uncover how all these elements work out in practice.
Some of their findings - that control can cope best with high relationship risks, and trust with high performance risks - follow previous literature. But in the low/low quadrant, they note examples of both governance approaches, and conclude that they may be substitutionary. And they find that the governance structure in their high/high quadrant case defies the literature’s predictions by using control and trust as complements.
Their advice to the manager is that each alliance faces a unique set of risks, so each requires a custom made governance structure, where the design of governance approach and elements is based on the proper appreciation of the relational and performance risks facing the alliance.

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