The Cooperative Venture Formation Process: A Latent Variable Structural Modeling Approach

This article addresses management process issues for forming cooperative ventures with an increased likelihood of subsequent success. Based on Roos (1989) the cooperative venture formation process is conceptualized in terms of three theoretical constructs: the extent of sufficient “internal push” for the project, the breadth and depth of “analytical scope,” and the strength of key “stakeholder support.” These constructs are related to subsequent perceived performance. Data from sixty seven firms were collected and analyzed via latent variable structural modeling a partial least square (PLS). One key contribution of this article is the modeling approach to strategic formation process. It contributes to an existing, but not very well developed, theory regarding strategy formation processes. The PLS method used in this study is quite unique within strategy research. As such, it contributes to methodology development in the strategy research field. The main managerial implication is that the process by which a cooperative venture is formed should largely be seen as a step-by-step approach—not a discrete decision. If the three fundamentals discussed in the article are thoroughly addressed, we can up the ante for success during implementation and, therefore, subsequent performance.