chapter  20
10 Pages

Strategic Alliance Management

A thorough understanding of strategic alliance management is a prerequisite for the twenty-fi rst century, when successful alliances are, and will continue to become increasingly, critical strategic tools in fi rms’ competitive arsenals. They appear in many forms and offer a wide range of benefi ts – economies of scale, reduced competition, innovation, and profi ts, to name just a few. Paradoxically, even as fi rms increase their focus on and use of alliances, failure rates seem to keep climbing. To disentangle the difference between alliance success and failure, we have connected existing theoretical and practical insights to present a much needed, coherent, academically grounded development framework of strategic alliance management that comprises seven separate but related development stages: alliance strategy formulation, partner selection, alliance negotiation, alliance design, alliance management, alliance evaluation and alliance termination. We also have elaborated on rationales for decision-making steps for each stage. Failure might also be attributed to an unawareness of the challenges associated with establishing alliances with unique objectives, diverging partner characteristics, and distinct contexts. Consequently, we have supplemented the generic insights with specifi c decision-making rationales and steps. Because alliance failure is more likely when fi rms fail to embed alliance experience in their organizational processes, we have fi nally detailed how fi rms can build and deploy their alliance capabilities.