chapter  4
15 Pages

Alliance Negotiation

Alliance negotiation constitutes yet another critical stage in the alliance development framework. Many alliance initiatives are terminated before they can be executed; if they are executed, the negotiation processes and outcomes establish the foundation for the future progress of the alliance. This stage entails establishing the actual complementarities in the collaboration and defi ning carefully the nature and amount of resources that will be available to the partnership, the ownership, the anticipated outcomes and the contractual provisions. Because alliance partners are interdependent, reaching an agreement demands some negotiation, usually through a dialogue among representatives of partner fi rms, with the goal of reaching outcomes that fulfi l the various interests of the partners in a way that is acceptable to everyone. Thus the key questions to be addressed during this stage refer to which negotiation outcomes will enable the alliance partners to obtain the greatest possible level of synergy, and what negotiation outcomes would provide the best deal for the partner fi rms. To inform their alliance negotiations, negotiators thus need a good understanding of the differences among various negotiation strategies and tactics (described in the fi rst section), as well as how to value their resource contributions responsibly (shown in the second section). The following two sections provide a systematic framework with a set of decision-making steps for alliance negotiation and a summary. The fi nal section concludes with a case illustration.