Accessing Organizational Resources and Pursuing Value Through International Promotional Alliances
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University of Massachusetts Amherst ScholarWorks@UMass Amherst Open Access Dissertations 2-2010 Accessing Organizational Resources and Pursuing Value Through International Promotional Alliances Joe Bryon Cobbs University of Massachusetts Amherst, [email protected] Follow this and additional works at: https://scholarworks.umass.edu/open_access_dissertations Part of the Business Commons Recommended Citation Cobbs, Joe Bryon, "Accessing Organizational Resources and Pursuing Value Through International Promotional Alliances" (2010). Open Access Dissertations. 183. https://scholarworks.umass.edu/open_access_dissertations/183 This Open Access Dissertation is brought to you for free and open access by ScholarWorks@UMass Amherst. It has been accepted for inclusion in Open Access Dissertations by an authorized administrator of ScholarWorks@UMass Amherst. For more information, please contact [email protected]. ACCESSING ORGANIZATIONAL RESOURCES AND PURSUING VALUE THROUGH INTERNATIONAL PROMOTIONAL ALLIANCES A Dissertation Presented by JOE B. COBBS The Graduate School of the University of Massachusetts Amherst February, 2010 Isenberg School of Management Department of Sport Management © Copyright by Joe B. Cobbs 2010 All Rights Reserved ACCESSING ORGANIZATIONAL RESOURCES AND PURSUING VALUE THROUGH INTERNATIONAL PROMOTIONAL ALLIANCES A Dissertation Presented by JOE B. COBBS Approved as to style and content by: _______________________________________ James M. Gladden, Chair _______________________________________ Neil Longley, Member _______________________________________ Kwong Chan, Member _______________________________________ Robert Faulkner, Outside Member __________________________________________ D. Anthony Butterfield, Ph.D., Department Head Isenberg School of Management DEDICATION This work is dedicated to the family and friends that have made my efforts possible. Specifically, my wife, Emily, who supported me throughout the years of progress and persisted with me when unanticipated challenges arose; my parents, Ted and Kay, who instilled in me the values of education and hard work; my grandparents, who shaped my vision of a truly successful life journey through their examples; and my friends, who opened their homes graciously during our many travels back ‘home’ and during periods of transition. Without the caring and selflessness of these individuals, I certainly would not be who or where I am today. ACKNOWLEDGMENTS The faculty serving on my committee have undoubtedly strengthened this dissertation significantly through their responsive feedback, assistance, and constructive challenges throughout the process. It has been a pleasure to serve as a doctoral candidate under their guidance and instruction. Specifically, I must acknowledge the chair of my committee, Dr. Jay Gladden, for his dedication to my academic maturation from the time I arrived on campus in Amherst several years ago. Even when he took on greater responsibility for the Isenberg academic community and then ascended into a new role as Dean, he never wavered from his commitment to my production of this culminating work. He set an example as an advisor that I hope to follow throughout my own career as a scholar. Also deserving of acknowledgement regarding this dissertation are several of my fellow PhD students who I have been privileged to work with over the last few years. Individually, David Tyler and Mark Groza offered valuable assistance in managing the data and clarifying various elements of the studies included here. Dr. Steven Pruitt was also helpful in his willingness to share his expertise on the event study literature. Finally, the support of the faculty and staff in both the departments of Sport Management and Marketing at UMass has been tremendous. Their immediate acceptance of me as a welcomed colleague encouraged my growth as a scholar and contributor to our chosen discipline. v ABSTRACT ACCESSING ORGANIZATIONAL RESOURCES AND PURSUING VALUE THROUGH INTERNATIONAL PROMOTIONAL ALLIANCES FEBRUARY 2010 JOE B. COBBS, B.S., MIAMI UNIVERSITY M.A., THE OHIO STATE UNIVERSITY Ph.D. CANDIDATE, UNIVERSITY OF MASSACHUSETTS-AMHERST Directed by: Professor James M. Gladden, Ph.D. Accessing and exploiting organizational resources plays an integral role in not only a firm’s propensity to achieve a competitive advantage, but also its mere survival in a competitive environment (Ulrich & Barney, 1984). One of the most common means of resource acquisition for both large administrative firms and smaller entrepreneurial enterprises is interorganizational alliances (Ireland, Hitt, & Vaidyanath, 2002). Utilizing the resource-based view of the firm within a strategic alliance framework, this dissertation examines a particular type of interorganizational exchange relationship permeating the marketing discipline. The promotional alliance is defined within this research as a strategic alliance based on resource exchange between a promoting enterprise and a firm seeking to fulfill promotion-based objectives through an ongoing collaboration with the enterprise. Each of the two sides of the promotional alliance relationship served as a focus for one of the two studies presented within this work. In the first study, a longitudinal vi survival model was employed to investigate the dependency of a promotional enterprise on external resource acquisition via alliances with promotion-seeking firms. Also at issue were the heterogeneity of resources accessed and the dynamics of the institutional forces regulating such alliances. Alliances with sponsoring firms offering financial and performance-based resources, as opposed to operational resources, were found to have a significant influence on the survival of sponsored enterprises. However, these dependencies were subject to changes in institutional support and the potential for diminishing returns. The second study approached promotional alliances from the perspective of the firms seeking promotion. Relying on the theory of efficient capital markets (Fama, 1970), an event study analysis was undertaken to determine the impact of internationally prominent promotional alliance announcements on the equity value of the sponsoring firms, which theoretically reflects investors’ expectations of future cash flows. Contrary to prior research, the initiation of these alliances demonstrated a negative impact on shareholder value. Several alliance, firm, and promoting partner characteristics were hypothesized to influence alliance outcomes to varying degrees within the cross-sectional sample of promotion-seeking firms. Surprisingly, only the magnitude of the sponsoring firm’s alliance investment and the nationality congruence within the alliance were influential in predicting investors’ reaction to such alliances. Each study was embedded within the institutional context of Formula One (F1) motor racing and focused on the promotional alliances involving corporate partners (sponsoring firms) and their affiliated racing teams. In this context, the racing teams acted as the promoting enterprises charged with providing the marketing platform to meet vii their sponsoring firms’ objectives. With annual races on four or more continents; a global television audience rivaled only by the Olympics’ opening ceremony, FIFA World Cup finals, and the NFL’s Super Bowl; direct competition between promoting teams; and sponsoring firms hailing from fifteen different nations and over twenty diverse industry sectors; F1 provided an ideal setting for the evaluation of interorganizational alliances’ impact on the survival of promoting enterprises and a promotion-seeking firm’s value implications. To compliment and strengthen the applied contribution of both studies, the analyzed results were subjected to a discussion with industry experts representing both sides of the promotional alliance relationship (Lane & Jacobson, 1995). Not only did this closing analysis reinforce the relevance of the research offered here, but it also presented a practitioner-focused examination of the industry challenges inherent in the theoretical tenets underlying such research. viii TABLE OF CONTENTS Page ACKNOWLEDGMENTS ...................................................................................................v ABSTRACT ....................................................................................................................... vi LIST OF TABLES ............................................................................................................ xii LIST OF FIGURES ......................................................................................................... xiv CHAPTER 1. THEORETICAL FRAMEWORK ...........................................................................1 1.1 Introduction ........................................................................................................1 1.2 Research Questions ............................................................................................3 1.3 Promotional Alliances ........................................................................................5 1.3.1 Resource-based View of Interorganizational Alliances ......................8 1.3.2 Commercial Sponsorship ..................................................................11 1.3.2.1 Sponsorship as a Promotion-based Strategic Alliance ....................................................................................12 1.3.2.1.1 Purpose ......................................................................14 1.3.2.1.2 Structure