Procedural fairness in strategic alliancesInternational Business and Development
Università degli Studi di ParmaProf. Alessandro Arrighetti
2013/2014
Balan IrinaTerzoni Luigia
Idea of fairness in the processes that resolve disputes and allocate resources.
Organizational justice: from micro level aspects to macro level phenomena
Selection of the partners focused on social characteristics
Procedural justice: some general definitions
Distributive justice
• distribution of benefits and harms, rewards and costs or other things that affect the well-being of a group’ members or a community
Procedural justice
• extent to which the dynamics of the decision process are considered fair and the way in which decision-making process influences the quality of exchange relationships
Interactional justice
• individual’s perceptions of the quality of interpersonal treatment received during the enactment of organizational decisions and procedures
Some General Definitions
Distributive
justice
Interactional justice
Procedural justice
The three types of justice in alliances
Procedural justice as an instrument to determine each party’s trustworthiness and commitment in an uncertain environment.
Fostering of interfirm cooperation on the long-term basis
extent to which interparty sharing of the reward from cooperation is fair
extent to which interpersonal treatment and information exchange between top management representing each party are fair
extent to which the strategic decision-making process and procedures that impact each party’s gains are fair
Differences from the general definition:
justice perception arises from both parties rather than from a single party.
need to establish 2 way communication, mutual respect and courtesy in making and implementing decisions
transformation of perceptual justice into recommended actions by the top management representatives.
the processes that must be viewed as fair involve important areas such as alliance structuring, management, and interpartner sharing.
Procedural justice defined in strategical alliance
Procedural justice
Distributive justice
Interactional justice
A theoritical model
Strategic Alliance
Performance
Interact through IJ’srelational attachment
inst
rum
ent
alit
y
equi
ty
Soc
ial
exch
ange
It Explains the process of interfirm cooperation
Justice theory:
Procedural fairness creates
Cooperative value
Relational Value
Relational model in justice theory
Procerural Justice Theory
party’s opportunityto voice its views
It includes
party’s commitment to joint efforts
Reduction of risks in
Interpartnerexchange
It increases: 1.interpartner conformity Identification
Internalization
Favorable procedural justice
involves group efforts fororganizationalaffiliation and group unityalleviates interpartyorganizational differences
It increases:2) complementary effect
Favorable procedural justice
Collectivecontrol
Cooperation
The role of boundary spanners
They transform theirperceptions of fairness
into actions
It helps to better understand: quality of decision making:
related to the fairness of decision-making procedures
quality of treatment:help people to evaluate the social
atmosphere of the group
Procedural justice information
perceptions of fairness are amplified through:
Engagement: means involving individuals in decision-making processes;
Explanation: everyone involved should understand why final decisions are made;
Clarity of expectations: before, during, and after decisions are made, managers have a firm understanding of what is expected of them.
Justice theorists also suggest ….
is associated with
Procedural Justice
Operational
outcomeFinancialoutcome
On which it has aDirect effect
On which it has an Indirect effect
Contributes less to outcomes when
interpartner cultural distanceis shorter
Procedural Justice
Importance of independent effects of DJ, PJ, IJ
…… also interactively they function together to improve strategic alliances performance because the may complement one another in stimulating interparty exchange.
Procedural fairness is seen as a critical stimulus for improving cooperation outcomes.
Conclusion
Thank youfor your attention