Types Of Alliances Research Articles

Building Successful Strategic Alliances: Strategic Process and Analytical Tool for Selecting Partner Industries and Firms

Successful business alliances are a critical strategic component in many industries, but too many strategic alliances fail to meet their partners' objectives. While the reasons behind alliance failures are complex, and vary according to type of alliance and industry, many failures result from ill-conceived overall alliance strategies, narrowly focused industry and firm partner selection analytical thinking and models, and poor alliance management, execution and implementation. In particular, the well-informed and strategically driven selection of alliance partners is a core element in building successful alliances. To that end, this article provides alliance managers and researchers with (1) a strategic management-based industry and partner selection process, (2) a new dynamic partner selection tool for evaluating target industries and specific firms, which is applicable to multiple alliance and industry contexts, and (3) an alliance-rich global travel industry application that illustrates the robustness of our partner selection process and analytical tool. The article fills a gap in the literature with respect to service-business alliances, which have traditionally been understudied. Lastly, perspectives are offered for future managerial and research actions.

Alliance Formation Motives in SMEs

Cooperative agreements are important tools to improve the competitive position of small and medium-sized firms.This explorative conjoint analysis study simultaneously examines the importance of firm, environmental and partner motives on the formation of two types of SME-alliances. In addition, we study the influence of the sector of industry and the CEOs' characteristics. Results indicate that alliance formation is determined by a combination of organizational, partner-and industry-related motives, and that each of these factors should not be studied in isolation. Moreover, motives differ across functional area types of alliances, and both the sector of industry and a CEO's experience affect the probability of alliance creation.

Risk Management in Strategic Alliances: Field Evidence

Transaction cost economics (TCE) theory is widely used to study the governance and management control practices used to mitigate interfirm alliance risk. Following Williamson (1985, 1991), empirical studies typically measure transaction characteristics that proxy for risk in alliances (e.g., asset specificity), and test for a relation between these measures and alliance management control choices. A common criticism of studies in this literature is that they typically focus on a narrow set of governance decisions (e.g., make versus buy) or control practices (e.g., specific contract terms). We posit that an equally limiting aspect of this literature is its reliance on risk proxies measured at the level of the individual transaction. These proxies fail to explicate specific alliance risks, and coupled with an undue focus on transactions rather than the totality of interfirm relationships, limit our understanding of how risks give rise to management controls more broadly defined. In this study we use field-based research and survey methods to develop a comprehensive inventory of the specific risks that managers anticipate and to provide insight regarding their prevalence across different types of interfirm alliances. Our analysis of the data supports an extant classification scheme that dichotomizes alliance risk as relational risk or performance risk (Das and Teng 1996, 2001). However, our analysis reveals another distinct risk category: compliance and regulatory risk, that figures prominently in accounting risk frameworks (i.e., COSO). Our exploratory analysis of correlation in the use of management controls, including contracts as well as pre- and post-contractual control processes, reveals six sets of alliance control practices. Relating these to risks, we find that performance risk is associated primarily with careful partner selection and contractual outcome agreements; relational risk is associated primarily with explicit exit agreements; and, compliance and regulatory risk is associated primarily with informal controls. In addition, we find that as compared to contractual alliances, alliances with shared ownership (i.e., joint ventures) make greater use of financial controls and informal controls. By identifying specific risks and controls used in practice and providing preliminary evidence of their relationships, this study provides a reference for future researchers seeking to provide more meaningful insight into the relationship between interfirm alliance risk environment and control systems.

Interpartner harmony in strategic alliances: managing commitment and forbearance

We propose a framework to understand interpartner harmony in strategic alliances. Interpartner harmony in strategic alliances denotes the mutual understanding that alliance members accomplish by managing commitment and forbearance in the context of their interdependence. We proceed from the notion that the pervasive conflict-based view of alliances has clouded the consideration of the quest for harmony as a significant factor in alliance dynamics. We believe that alliances have an inbuilt resilience that makes the emergence of harmony a natural outcome, through the joint exercise of commitment and forbearance, even as conflict and opportunism persist as inevitable challenges. We describe the four kinds of interpartner harmony in alliances – superficial, specious, constrained and communal – based on the degrees of commitment and forbearance. We also discuss the salience of each of these interpartner harmony types in the three principal types of alliances (equity joint ventures, minority equity alliances and nonequity alliances). Implications of the analysis are discussed for further research as well as managerial practice.

Teaching and Learning Guide for: From Local to Global to Transnational Civil Society: Re‐Framing Development Perspectives on the Non‐State Sector

• Civil society has become one of the most popular concepts within international development discourses. But, what is civil society? Civil society is defined as an arena of collective social interaction situated between the state, market and household, encompassing a range of non-state organisations, groups and associations, including non-governmental organisations (NGOs). The article assesses the range of different interpretations of civil society highlighting its diverse makeup at local, national and transnational scales. • Why has civil society become so important within international development? Democracy and delivery of services. As people organised collectively against totalitarian regimes in the former Soviet Union, Eastern Europe and the Global South, civil society emerged as a manifestation of democratisation processes. The neoliberal agenda also wanted to capture and channel civil society to foster democracy, but also to take on service delivery functions as the role of the state diminished. This article outlines how these roles relate to two theoretical viewpoints – the Marxist or Gramscian that sees civil society as a site of resistance and counterhegemony, and the liberal democratic that views it as a beneficial force for good. • Civil society in practice. In the 1990s, development agencies championed civil society from an undertheorised liberal democratic viewpoint as a saviour or ‘magic bullet’ as it channels more and more funds via NGOs. But, civil society has increasingly been criticised as undemocratic, unable to reach the poor and unaccountable. This article describes this evolution. • The emergence of global or transnational society. In these days of globalisation, global civil society is increasingly important. This is neither civil society at a global level, nor is it a unified global force for good, lobbying and challenging the neoliberal order. Instead, viewed as ‘transnational civil society’, it is a complex mix of competing, overlapping and intersecting groups that operate beyond national borders for a range of reasons. Especially important actors in transnational

HOW TIGHT AN EMBRACE? CHOOSING THE OPTIMAL DEGREE OF PARTNER INTERACTION IN ALLIANCES BASED ON RISK, TECHNOLOGY CHARACTERISTICS, AND AGREEMENT PROVISIONS.

The article discusses the question of what types of business alliances are least costly, least risky, and best for value creation. It is argued that governance structures are selected to facilitate interaction between organizations. This influences topics such as trust, control, and commitment. Partner interaction is said to be particularly significant in the study of technology alliances which cross borders. Protecting the firm against potential future competition while sharing necessary information is described as a difficult balancing act.

Enhancing the Innovation Performance of Firms by Balancing Cohesiveness and Bridging Ties

This article examines how firms can construct their alliance portfolio to obtain higher rates of innovation. The study develops around the idea that cohesive and sparse relationships are at the same time structurally contradictory and functionally interdependent. Their structural contradiction lies in their illustrating opposite patterns of firm partners' interconnectedness: cohesive alliances imply that a firms' alliance partners are in turn highly connected among each other, whereas sparse alliances imply that the partners in these alliances are actually disconnected from each other. But they are functionally interdependent in that they provide different (and complementary) types of contribution to a firm's innovation performance. On the one hand, by facilitating trust building and cooperation, cohesive alliances provide a normative environment that guarantees the actual execution of knowledge recombinant processes. On the other by exposing firms to novel and varied knowledge flows, sparse alliances break the tendency of cohesive alliances to produce redundancy, and make it possible for the knowledge recombinations that take place across cohesive relationships to actually bear the fruits of innovation. By illustrating the mechanisms whereby the synergies between cohesive and sparse alliances can be obtained and exploited, this study suggests the development of a dual alliance network structure, made up of both cohesive and sparse alliances, as the normative ideal for innovation. The empirical results support this insight, showing that alliance portfolios made up of both types of alliances provide higher rates of innovation than those from either pattern alone. The article demonstrates these findings in the US mobile phone industry in the 1990s, a domain where firms engaged systematically in innovation processes and strategic alliance activities.

A Dynamic Model of Trust and Commitment Development in Strategic Alliances

Although trust and commitment are important for the success of any alliance activity, there is only a minimal attention given to the 'soft' side of alliance management. In this article we propose a dynamic framework for the development of trust and commitment in different alliance types. We argue that firms with competitive motives will lead to a failure of the alliance and suggest that both trust and commitment have two components - rational and emotional. Based on these, we propose that the final outcome of an alliance relationship will depend on the development of trust and commitment over time, which in turn will depend on the motives with which firms enter into relationships.

The Virtual Group Identification Process: A Virtual Educational Community Case

Because the Internet provides an alternative forum for the social interaction of professional groups, understanding how these groups form as virtual communities (VCs) in cyberspace is crucial. In this study, we observe the social interactions of teachers belonging to the largest VC in Taiwan and analyze discourse on an important educational policy, using content analysis to ascertain how virtual group identity is established. Our primary findings show that among the seven identity categories characterizing professional virtual group identity, both alliance and kinship types of identities are the main forces behind the formation of a virtual group. In contrast, the affection, attachment, bonding, closeness, and nostalgia types of identities show minimal effect. Moreover, leadership of the virtual group plays a critical role in the group setting, and participants play a part in restoring a positive sense of self or in shaping the group identity as they encounter threats in this dynamic environment.

The FIFTH Perspective

Today, alliances, collaborations, and networks are synonymous with strategy. Business process outsourcing (BPO) is one such type of alliance. With increasing reliance on outsourcing, the organizational boundaries are blurring. The implications for the client organization can be tremendous, as it now relies on an outside organization to fulfill its operational objectives. Currently, there is no single framework that can effectively measure performance for BPO arrangements. In its present form, the balanced scorecard (BSC) only addresses the performance measurement needs of a single enterprise and any perspective on any external relationships is completely missing. The traditional BSC does not suffice as a performance measurement framework for BPO. While both the client and the vendor can use a BSC for their respective organizations, the strategic objectives of the organizations may not be met. In this article the authors propose a new perspective as an extension to the BSC, namely, the goals alignment perspective. Goals alignment of the two organizations will enable creation of performance measures that will help participating organizations to achieve their respective goals.

How company and managerial characteristics influence strategic alliance adoption in the travel sector

AbstractThe purpose of this paper is to examine the role of company and executive characteristics in strategic alliance formation in the tourism sector of travel. A survey of Australian travel sector businesses was carried out and the results indicate a high level of interaction through alliances between various sectors of the Australian tourism industry. Top managers' characteristics (experience, ownership and risk‐taking attitude) were found to be influential in taking strategic decisions of whether to form alliances or not. These characteristics do not play an important role in determining the number of alliances an organisation has and their geographical location, as much as company characteristics do. The findings of this paper imply that company characteristics are important in determining alliance formation. Managers should thoroughly consider these characteristics when deciding not only to form alliances, but also the types of alliances that could help their organisations to be more competitive, given limited resources. Copyright © 2007 John Wiley & Sons, Ltd.

Interpartner Legitimacy in the Alliance Development Process*

abstract We propose a framework to understand interpartner legitimacy in strategic alliances. Interpartner legitimacy is the mutual acknowledgment by the alliance partners that their actions are proper in the developmental processes of the alliance. We argue that interpartner legitimacy is needed for cooperation to achieve alliance objectives. We propose three types of interpartner legitimacy – pragmatic, moral, and cognitive legitimacy – and discuss the dynamics of these three types in the formation, operation, and outcome stages of alliance development. Further, we discuss the salience of interpartner legitimacy in different alliance types. Finally, we derive propositions for further research, and discuss strategies that alliance managers can adopt to develop interpartner legitimacy.

Global airline alliances: sparking profitability for a troubled industry

PurposeMore than ever, as far as legislation permits, long‐haul airlines tend to group in alliances. This paper examines the historic developments of two alliances in terms of their potential for increasing profitability of individual airlines.Design/methodology/approachFourteen in‐depth interviews were conducted with airline executives belonging to the two leading alliances, SkyTeam and Star Alliance, as well as with aviation experts. In addition to the recent literature on alliances theory, the Internet was used to obtain data from international organizations, consultancies, universities and airlines – members and non‐members of an alliance.FindingsStar Alliance might be one step ahead of SkyTeam (in terms of scope, number of members, organization, age …). Star Alliance is not only bigger but its geographical scope is wider; the number of members in each region is more balanced. The Star Alliance Services GmbH as head organization provides members with a workforce dedicated solely to the goals of the alliance. But Star Alliance's advantage may be short‐lived, especially since the airline industry demonstrates one of the fastest dynamics of all industries, and government regulations change rapidly as well.Practical implicationsInter‐firm agreements in the airline industry have undergone dramatic changes and the future will bring additional transformations. The dichotomy between endogamic and exogamic partnerships is used to explain these changes. Previous agreements were endogamies: alliances between companies with comparable profiles mostly centered on back‐office activities as in Global Distribution Systems. Current mega alliances, such as SkyTeam and Star Alliance, are exogamies. They are alliances between companies mostly originating from distinct geographic territories. As such, they built on differences between partners regarding their networks. Their current focus is on front‐office activities to better serve customers and the alliances have used publicity to attract more customers. The main thrust is to increase the number of passengers so as to increase revenues. It is forecast that these mega alliances will again change their emphasis to back‐office activities to benefit from economies of scale and decrease operating costs.Originality/valueIs of value in highlighting how the issues indifferent kinds of alliances are not managed the same way. In exogamic relationships, partners must learn about and adapt to each other. The qualitative differences that exist between organisations can be a threat to the success of the alliance and must therefore be managed. In addition, the two types of alliances do not produce the same results. Endogamies standardize processes to obtain benefits of scale in at least one stage of the value chain. Exogamic relationships, in contrast, develop qualitative benefits that result from a synergy of different resources.

Social organization and variation in cooperative alliances among male lance-tailed manakins

In species where males form cooperative alliances for the purposes of reproduction, there may be considerable variation in the strength and size of alliances observed within one population. Male lance-tailed manakins, Chiroxiphia lanceolata, form long-term cooperative alliances to court females on group-occupied display areas. I investigated male status and alliance structure in a colour-banded population. Each display area was a group territory attended by multiple adult and subadult males. Alpha males were present at display areas more often than other males, performed solo courtship displays for females, and vocalized distinctively in paired displays. Alpha–beta pairs had high duetting association index values and performed two types of paired courtship displays for females. I combined these characteristics in a predictive logistic regression model to assess male status probabilistically when not all key behaviours were observed. Typically, one alpha and one beta male occupied each display area, but males also formed multiple alliances (one alpha paired with multiple high-ranking subordinates) or were solitary, with no distinct alliances. Both alliances and solitary alphas attracted females for courtship displays. Alphas were generally older than their beta partners, but age did not absolutely predict status. Individual alpha males were involved in different alliance types in different years, showing that alliance variation is not the result of fixed differences in individual strategies. Instead, variation apparently results from changing opportunities for partnership formation and territory acquisition.

Joint ventures around the globe from 1990–2000: Forms, types, industries, countries and ownership patterns

Joint ventures (JVs) and alliances are important forms of inter-organizational cooperation because they allow firms to achieve complex mutual tasks, otherwise impossible using simple arm's-length contracts, but without actually acquiring one another. In light of recent trends in globalization, this feature of JVs and alliances is vital to multi-national corporations (MNCs). These firms have complex operations, making simple arm's-length contracts insufficient. MNCs are also very large, so that mergers and acquisitions and takeovers are extremely expensive. In this paper, we describe global trends in JVs and alliances for the period 1990 to 2000, utilizing the Thomson Financial SDC Platinum database. We survey the relevant literature on JVs and alliances, and provide a detailed description of the world of JVs and alliances as depicted by this database. We report a number of interesting facts regarding the forms and types of JVs and alliances, their industry and geographic distribution, and patterns of ownership.

In search of complementary assets: The determinants of alliance formation of high-tech start-ups

Why do new technology-based firms (NTBFs) cooperate? Starting from Teece's [Teece, D.J., 1986. Profiting from technological innovation: implications for integration, collaboration, licensing, and public policy. Research Policy 15, 285–305] conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence-based tradition and in the social structure perspective, we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm-specific characteristics and the nature of the alliance. In particular, a distinction is made between exploitative commercial alliances and explorative technological alliances. The econometric estimates, based on a large sample of Italian young high-tech firms that are observed from 1994 to 2003, provide strong evidence supporting two key intuitions of Teece's work. First, the “combination of specialized complementary assets” appears to be a key driver of the formation of exploitative commercial alliances by NTBFs. More specifically, patent holding affects positively the likelihood to establish commercial alliances, but this propensity is found to rapidly decrease with firm size, suggesting that as long as NTBFs become larger and possess specialized commercial assets their urge for commercial alliances diminishes. Second, following the parallelism set forth by Teece between search for alliance partners and access to external financing, the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller NTBFs. In this respect, our results clearly support the view that sponsor institutions as public research organizations, venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance.

Choosing best alliance partners and allocating optimal alliance resources using the fuzzy multi-objective dummy programming model

Synergy effects are the motives to enter into strategic alliances; however due to lack of adequate preparation or planning, these alliances often fail. It is of no doubt that a successful strategic alliance depends on choosing the correct alliance partners and appropriate resource allocation. In this paper, the fuzzy multi-objective dummy programming model is proposed to overcome the above-mentioned problems. Two types of strategic alliances, joint ventures and mergers and acquisitions (M&A), are demonstrated to choose the best alliance partners and allocate the optimal alliance resources in a numerical example. Based on the results, our method can provide the optimal alliance cluster and satisfaction in strategic alliances.

Corporate Entrepreneurship Activities through Strategic Alliances: A Resource‐Based Approach toward Competitive Advantage*

abstract Corporate entrepreneurship (CE) activities may significantly benefit from interfirm strategic alliances, although such benefits have not been sufficiently examined in the literature. In this paper, a resource‐based framework is presented to examine how strategic alliances offer entrepreneurial firms needed resources that may not otherwise be available. We argue that CE activities are likely to lead to resource gaps. We compare various options to fill resource gaps, and identify the pros and cons of the alliance approach. We then discuss the resource conditions that provide competitive advantage for a firm, if alliances are properly used to help implement CE. Finally, we examine how different types of alliance (e.g. joint ventures, R&D alliances, and learning alliances) facilitate various CE activities, including innovation, corporate venturing, and strategic renewal.

Survival during a Crisis: Alliances by Singapore Firms

In this study, we focus on the under‐researched issue of how environmental shocks impact alliance survival. We draw from several different theoretical perspectives such as industrial organization economics, managerial theories of the firm (such as agency theory) and institutional theories. We argue that the relationship between the occurrence of environmental shock and alliance survival is a contingent one. Specifically, we hypothesize that the following types of alliances will exhibit better likelihood of survival: alliances that yield a balance of short‐term and long‐term benefits (scale alliances) rather than purely long‐term benefits (link alliances); alliances that lead to either cost reduction or near‐term improvement in revenue realization (marketing alliances); and alliances that bring together partners from different economic regions (those involving Western and Asian partners). Based on an analysis of 348 alliances formed by Singapore firms, we find that marketing alliances and those involving at least one Western partner indeed exhibit a better likelihood of survival during the Asian economic crisis. We conclude that alliances that can enhance revenue potential in the short‐term are more robust to environmental shocks and that alliances can benefit from an effect similar to risk reduction through international diversification.

Joint Ventures around the Globe from 1990-2000: Forms, Types, Industries, Countries and Ownership Patterns

Joint ventures (JVs) and alliances are important forms of inter-organizational cooperation because they allow firms to achieve complex mutual tasks, otherwise impossible using simple arm's-length contracts, but without actually acquiring one another. In light of the recent trend in globalization, this feature of JVs and alliances is very important to multi-national corporations (MNCs). These firms have complex operations, making simple arm's-length contracts insufficient. However, MNCs are also very large, making mergers and acquisitions and takeovers very expensive. This paper describes a global trend in JVs and alliances for the period 1990 to 2000, utilizing the Thomson Financial SDC Platinum database. We survey the existing theoretical and empirical literature on JVs and alliances, and provide a detailed description of the world of JVs and alliances as depicted by this database. The results reveal a number of interesting facts related to the forms and types of JVs and alliances, their industrial and geographical distributions, and the patterns of ownership.