LEARNING FROM FAILURE - TOWARDS AN EVOLUTIONARY MODEL OF COLLABORATIVE VENTURES

This paper reports on a longitudinal case study of the interaction bet ween two partners to a failed international joint venture. We develop a model of the collaboration process in partnership and alliances base d on earlier work by Ring and Van de Ven(1994) and by Dot (1996). We e mploy a series of events that occurred in the course of the relationsh ip as the unit of analysis in order to trace the interactions between the partners, and to explicate the impact that external shocks have on their perceptions of efficiency and equity. The impact of these event s, as well as the responses they elicit, on the quality of the relatio nship (and vice versa) are also considered. We find that the partners' assessments cause them to either engage in renegotiation of the terms of the contract, or to modify their behavior unilaterally, in an atte mpt to restore balance to the relationship. The process feeds back unt il a new mutual understanding of equity is restored, or else the relat ionship deteriorates gradually until a point when the venture is disso lved. We conclude that positive feedback loops are critical in the evo lutionary process, that relationship quality is both an outcome and a mediating variable, and that procedural issues are critical from the s tart in fostering a climate for positive reinforcement and the buildin g of mutual trust and confidence in the relationship.