ABSTRACT:
This research theorizes and documents for the first time a cyber risk that may arise from strategic alliances with Big Tech, a grouping of the most dominant companies in the information technology industry. This research proposes that alliances with Big Tech tend to involve leveraging and integrating Big Tech’s innovative technological capabilities into a focal firm’s data management, operations, products, or services. This process can be understood as an inter-organizational system of systems integration and is presented as a mechanism that makes focal firms vulnerable to external cyberattacks. In addition, this research theorizes and shows that the effect of strategic alliances with Big Tech on the risk of cyberattacks is not linear; instead, it increases up to a certain point and then starts decreasing. Finally, this research suggests that intangible asset intensity strengthens the relationship between strategic alliances with Big Tech and the risk of cyberattacks. The findings of this research provide timely and important insights into cyber risks arising from strategic alliances centered on integrating systems and technologies across partner firms’ boundaries.
Key words and phrases: Strategic alliance, Big Tech, security vulnerabilities, cyber risk, cyberattacks, innovative technological capabilities, system of systems, intangible asset intensity, inverted U-shaped relationship