Performance of alliances: formative stages and changing organizational and environmental influences
Abstract:There is near unanimous agreement that the performance of alliances usually falls short of expectations. Studies have identified several generic reasons for poor performance: inadequate communication, lack of trust, insufficient complementarity of resources, inappropriate organizational structures and processes, and so on. While we broadly agree with these, knowledge of these self-evident reasons does not seem to have turned the tide of bad news in any way. We show in this paper that it is important to unpack a broad set of antecedent variables, including the ones identified above, and to track them over the crucial formative stages of an alliance. Based on our interviews with 24 senior and middle level managers and professionals of a focal company about 10 of its major alliances, we identify the following four formative stages of an alliance: (1) Recognition, (2) Research, (3) Relationship Set-up, and (4) Ramp up. We show that the primary predictors of success across these stages are not identical, nor their effect uniform. Further, proper completion of all the preceding stages is essential for the success of subsequent stages. We finally show that the compaction of the various successful stages, in particular of the Ramp-Up stage, is one of the best predictors of overall success of an alliance.
Document Type: Research Article
Affiliations: Rutgers University, Faculty of Management, Department of Organization Management, Newark, NJ 07102.
Publication date: October 1, 1999