Alliance Governance at Klarna: Managing and Controlling Risks of an Alliance Portfolio

The case study object is the Swedish Internet start-up, Klarna, and its partnership-business model design and governance. Klarna provides payment solutions that increase sales for collaborating merchants in the e-commerce sector. Their invoice and installment payment services are an alternative for shoppers who do not want to pay via other services, such as credit cards, PayPalTM, or advance payment. Invoice payments are perceived as safe and simple to use and thus increase sales for merchants.
Klarna's growth story represents very successful partner management. Klarna's great success primarily builds on its ability to minimize risk through effective alliance governance. This case study illustrates the governance and management of the alliance portfolio of Klarna and the interplay of control, trust, and risk in the interorganizational context. Special attention is given to the interrelation of important governance mechanisms, namely, agreement design, control mechanisms, and trust, and their influence on collaboration risks.