strategic alliances choose your partner
Strategic Alliances; Choose Your Partners
Keith D. Brouthers, Lance Eliot Brouthers and Timothy J. Wilkinson
Strategic alliances are known to be risky. Potential partners may be a lot better (or worse) than the company at the strategic alliance 'game '. Unless there is a real resources shortage, be it skills, technology, finance, strategic alliances should be avoided. If shortages exist then the company should look for complementary skills, cooperative cultures, compatible goals and commensurate risk levels.
The first step in finding a partner with complementary skills is to undertake a thorough search. Experience, capabilities and potential for making a real contribution are important criteria. Alliance partners must be willing to give to and take from one another. New firms may possess technology and knowledge skills but lack marketing and management expertise. Existing large companies may not have the specific skills of the n e w firm. By working together, such firms will have true competitive advantage.
In the case of NUMMI, the mix of cultures, the Japanese team approach, GM 's corporate approach and the unions ' 'anti-management ' approach were successfully combined. It is essential to avoid poor management styles. Strategic alliances work better w h e n there is symmetry in size and internal working environments, and w h e n peer relationships between the top managements can be assured. Alliances can only work from the top down and do need to implement substantial delegation.
While cooperative culture is a pre°requisite, gate-keeping is still n e e d e d even if there is near total ethics and business compatibility.
Goal assessment is very important; a successful alliance must be based on compatible goals. The ideal is w h e n strategic goals converge, while competitive goals diverge. Ambiguity must be avoided as should uncoordinated activities. The
Boeing-Japanese alliance achieved some of their goals by working together; others were to be attained
Keith D. Brouthers, Lance Eliot Brouthers and Timothy J. Wilkinson
Strategic alliances are known to be risky. Potential partners may be a lot better (or worse) than the company at the strategic alliance 'game '. Unless there is a real resources shortage, be it skills, technology, finance, strategic alliances should be avoided. If shortages exist then the company should look for complementary skills, cooperative cultures, compatible goals and commensurate risk levels.
The first step in finding a partner with complementary skills is to undertake a thorough search. Experience, capabilities and potential for making a real contribution are important criteria. Alliance partners must be willing to give to and take from one another. New firms may possess technology and knowledge skills but lack marketing and management expertise. Existing large companies may not have the specific skills of the n e w firm. By working together, such firms will have true competitive advantage.
In the case of NUMMI, the mix of cultures, the Japanese team approach, GM 's corporate approach and the unions ' 'anti-management ' approach were successfully combined. It is essential to avoid poor management styles. Strategic alliances work better w h e n there is symmetry in size and internal working environments, and w h e n peer relationships between the top managements can be assured. Alliances can only work from the top down and do need to implement substantial delegation.
While cooperative culture is a pre°requisite, gate-keeping is still n e e d e d even if there is near total ethics and business compatibility.
Goal assessment is very important; a successful alliance must be based on compatible goals. The ideal is w h e n strategic goals converge, while competitive goals diverge. Ambiguity must be avoided as should uncoordinated activities. The
Boeing-Japanese alliance achieved some of their goals by working together; others were to be attained
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