The challenges that societies currently face are highly complex and unprecedented. Many of these challenges, such as climate change, scarcity of natural resources, increasing globalization, terrorism, poverty and food shortages, cannot be resolved within the public sector alone. Consequently, collaboration between private fi rms and public organizations, such as governments, universities and non-governmental organizations (NGOs), has become increasingly important. These cross-sector alliances provide opportunities for partners to share resources and expertise, which allows more effective solutions in keeping with individual and communal objectives. However, private fi rms and public organizations vary in many ways, including societal function, profi t and non-profi t orientation, accountability and organizational backgrounds, all of which are major causes of alliance instability. If these differences are not controlled, they will negatively affect the partners’ ability to realize their individual and collective alliance objectives. Thus, although crosssector alliances can enhance a fi rm’s competitive position, they also present a unique challenge, in that fi rms wishing to realize their private objectives must reconcile a wide range of differences that give rise to confl icts. The fi rst section discusses this cross-sector alliance challenge and the second section elaborates on the mechanisms that managers can use to deal with it. Next, a cross-sector alliance is associated with the alliance development framework to develop guidelines for decision-making (described in the third section). The chapter concludes with a summary and a case illustration.