Make or break alliances: a process model of faultline contagion and alliance instability

The performance of alliance arrangements is strongly affected by their inherent instability - fluctuating patterns of relational and collaborative processes. To provide insight in the drivers of alliance instability prior research has primarily adopted alliance-level explanations, neglecting that alliance processes and outcomes often depend on interactions within and between the teams that make up the alliance. To address this issue, we approach alliance arrangements as multiteam systems and draw on the group faultline framework to investigate how alliance team processes may extend to the alliance-level and, thus, impact alliance instability and performance. Our longitudinal case study reveals (1) the occurrence of faultlines on the AMTS level and shows that (2) activated (horizontal and vertical) AMTS faultlines contribute to alliance instability which consequently undermines alliance performance and (3) that team-level goal and mental model asymmetries trigger a process of faultline contagion - a process in which team faultlines activate AMTS faultlines by triggering an instability escalation from the team to the AMTS level. Based on these results we develop a process model of faultline contagion and alliance instability.