chapter  9
14 Pages

Alliance termination

WithBrian Tjemkes, Pepijn Vos, Koen Burgers

The objective of the alliance termination stage is to organize an exit that offers favourable outcomes to all parties, while simultaneously considering the complexity of the process in terms of key actions and stakeholders, the social and economic costs, and its speed and ease. The reasons for premature alliance termination consist of three sets of factors: structural deficiencies, process deficiencies and (unforeseen) external circumstances. During the alliance formation stage, firms establish alliances to achieve their objectives, select a partner, engage in negotiation and formalize the initial alliance design. To inform decision making about alliance termination, the chapter suggests that managers should distinguish different types of termination, which enables them to plan the termination during the preceding alliance development stages. It provides a systematic framework with a set of four decision-making steps for alliance termination. The steps include assessing and initiating dissolution, promoting dyadic communication, disengagement, and managing aftermath. The chapter provides a summary before concluding with a case illustration.