chapter  18
17 Pages

Alliance portfolios

WithBrian Tjemkes, Pepijn Vos, Koen Burgers

Alliance portfolios tend to increase management complexity, coordination costs and the risk of conflicts. To be able to realize superior portfolio performance, it is important for managers to understand what an alliance portfolio is and how to design and manage a high-performing alliance portfolio. This chapter provides a set of guidelines that explain how alliance portfolio management impacts the governance of single alliances. Studies on alliance portfolio design have identified various design parameters, including a size dimension, a structural dimension, a governance dimension, functional dimensions and a partner diversity dimension. Portfolio management pertains to governance of the set of alliances and the linkages between partners. The two management factors that allow firms to maximize their return on their alliance portfolio are knowledge management and internal coordination. Internal coordination helps firms to align the alliance portfolio strategy with the separate parts of the organization. The chapter concludes with a summary and a case illustration.