Sources of Strategic Alliances’ Failure
Kingston university | |
|Discuss the most frequent sources of failure in forming strategic alliances. What can be done to mitigate these problems? |
|International Business Strategy |
|BSM103 |
| |
|05/03/2010 |
Lecturer: Adam Raman
By:
Mohammad Alyazouri
K0536616
2009/10
Sources of strategic alliances’ failure and how to mitigate these problems
Taking a decision to join an alliance would be very risky, in spite of any advantage that the alliance would give the firm, due to the high possibility to fail; unfortunately, this fact has formed an assumption that the formation of strategic alliances is more likely to fail, as long as more than sixty percent of alliances tend to fail according to (Kalmbach and Roussel, 1999, cited in Elmuti and Kathawala, 2001). However, this essay discusses the frequent sources that lead alliances to failure as well as it emphasizes key features that could be followed in order to mitigate these problems.
According to Elmuti and Kathawala (2001), the most frequent sources of failure in forming a strategic alliance could be the following:
1) Cultural clash: It is considered to be the most significant problem that firms face when forming alliances, the language acts as a barrier against an effective communication, while in terms of operations, companies operate differently as their cultures differ, in 2001, Daniel and Radebaugh stated that American companies evaluate performance using financial measures such as
|Discuss the most frequent sources of failure in forming strategic alliances. What can be done to mitigate these problems? |
|International Business Strategy |
|BSM103 |
| |
|05/03/2010 |
Lecturer: Adam Raman
By:
Mohammad Alyazouri
K0536616
2009/10
Sources of strategic alliances’ failure and how to mitigate these problems
Taking a decision to join an alliance would be very risky, in spite of any advantage that the alliance would give the firm, due to the high possibility to fail; unfortunately, this fact has formed an assumption that the formation of strategic alliances is more likely to fail, as long as more than sixty percent of alliances tend to fail according to (Kalmbach and Roussel, 1999, cited in Elmuti and Kathawala, 2001). However, this essay discusses the frequent sources that lead alliances to failure as well as it emphasizes key features that could be followed in order to mitigate these problems.
According to Elmuti and Kathawala (2001), the most frequent sources of failure in forming a strategic alliance could be the following:
1) Cultural clash: It is considered to be the most significant problem that firms face when forming alliances, the language acts as a barrier against an effective communication, while in terms of operations, companies operate differently as their cultures differ, in 2001, Daniel and Radebaugh stated that American companies evaluate performance using financial measures such as
References: 1. Elmuti, D. & Kathawala, Y. (2001) “An overview of strategic alliances”, Management Decision, 39 (3), pp. 205-218 Emerald [Online] Available at (Accessed: 01 March 2010) 2. Cojohari, N. (no date) Competitive advantage of strategic alliances [Online] Available at (Accessed: 02 March 2010) 3. Scot, B. (2001) Partnering in Europe: Incentive based alliancing for projects. London: Thomas Telford Ltd. 4. Scot, B. (2001) Partnering in Europe: Incentive based alliancing for projects. London: Thomas Telford Ltd. 5. Kermally, S. (1999) when economics means business: the new economics of the information age. Great Britain: Biddles Ltd, Guildford & King’s Lynn 6. Birchall, D. & Tovstiga, G. (2005) Capabilities for strategic advantage: Leading through technological innovation. New York: Palgrave Macmillan.