Alliances and COVID-19: An Alliance-Shock Response Framework

The emergence of the COVID-19 pandemic represents an external shock that has prompted a variety of organizational responses. Recognizing the pivotal role that alliances fulfill in how firms deal with external shocks, we present an alliance-shock framework. Our framework stipulates that a firm’s response to an external shock is driven by (1) the extent to which the alliance portfolio functions as a buffering mechanism (that is, narrow versus broad) and (2) how decision-makers categorize the external shock (that is, opportunity versus threat). Based on these two dimensions, we infer four prototypical alliance-shock responses: (1) shock-shaping, (2) shock-adaptation, (3) shock-stabilization, and (4) shock-absorption.