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A Structural balance theory of alliance formation: competition and cooperation in the global airline industry

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This paper investigates the joint effects of pre-existing cooperative and competitive relationships on alliance formation in the global airline industry from 1994 to 1998. The authors' application of structural balance theory suggests that the formation of dyadic alliances should be influenced by indirect relationships through other organizations. The authors find that airline dyads are more likely to form alliances when they have common partners or common rivals. The interaction between cooperative and competitive networks can also prevent alliance formation. Airlines are less likely to form alliances with the partners of their rivals or with the rivals of their partners, but airline dyads are likely to form alliances as competitive responses to alliances by their respective rivals. Alliances formed under conditions of structural balance tend to involve a broader scope of cooperative activities. Generally, structural balance theory may explain the formation of competing alliance groups in this industry.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2001/2001-24.pdf

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Copyright INSEAD. All rights reserved