Proactive Legal Involvement in Partner Selection Process

Abstract

Using a partner selection process in the start of strategic alliances is not yet general practice. This is regarded as one of the reasons why many strategic alliances fail to be successful. The use of a structured partner selection process could be a way to build one’s alliance capability and create a better fit and higher alliance performance.In this paper, drawing from quantitative and qualitative research, we argue that alliances are more likely to increase alliance success when the partners pay particular attention to aspects with legal dimension within their partner selection process. Our key argument is that, as inter partner conflicts are the main reasons for alliance failure, by taking a legal perspective and providing adequate governance structure as instruments early on during the partner selection process, may diminish those conflicts and increase alliance success.Our findings from a quantitative study among alliance professionals suggest that the use of negotiation and standard governance is highly effective in helping firms to increase their alliance success. As our study indicates that including clear steps regarding legal aspects of alliance selection, we further explored the role ‘the law’ (contracts and lawyers) plays and may play in (to optimizing) a successful selection process. We not only show the added value of taking a legal perspective, we also suggest which and when legal elements may be organized in such a way that they support a successful partner selection process.