Organization: Contemporary Principles and Practice, 2nd Edition

CHAPTER 11

Strategic Alliances

WHAT THIS CHAPTER COVERS

This chapter begins by defining a strategic alliance and indicating the growing importance of alliances in contemporary business. It then details the different forms that alliances can take in terms of their level of integration, legal and ownership status, and the partners' strategic intention in forming them. Due to their hybrid nature, alliances present special managerial and organizational challenges. Five of these are discussed: the design of alliances, the challenge of generating trust within them, conflicts in the role of alliance management, clashes between partner cultures, and the issue of partner control. The last section identifies three configurations found among joint ventures, each of which suits different circumstances and requires different arrangements to achieve good performance. These configurations are the surrogate subsidiary, the balanced partnership, and the junior partnership.

What is a Strategic Alliance?

An “alliance” is any medium to long-term cooperative relationship between organizations, normally between firms. It excludes one-off or short-term contracts and other agreements that do not involve some joint working between firms over time. Alliances are often termed “strategic” because they are normally formed to help the partner firms realize their strategic objectives on the basis that this ...