Strategic Alliances

Conceptual Overview

SA have a long history, although only recently have they been recognized as an essential institutional form that supports collaborative activities. The main research on SA has emerged at the cross-road of multiple disciplines such as strategic management, organization theory, political science, international business, and economic theory of cooperation. Much of the theoretical foundations were established with the edited volume by Contractor and Lorange on cooperative strategies in international business, with contributions from Buckley and Casson on a theory of cooperation, Contractor and Lorange on the strategy and economic basis for [Page 1459]cooperative ventures, and Harrigan on partner asymmetries. Other contributions include Hamel on interpartner learning in strategic alliances, Auster on theoretical perspectives on interorganizational linkages, Gulati (1995) on the relationship between repeated transactions and trust, and Doz on the learning processes in strategic alliances and on management of collaborations in technology-based product markets. Some of the leading research questions explored were why alliances are set up (Gugler); the international context of cross-border strategic alliances (Snodgrass), and how to achieve success in international strategic alliances (Bleeke & Ernst; Mohr & Spekman).

Different alliance forms represent different approaches that partners adopt to control their interdependence. Different types of SA are also associated with different legal forms, which enable firms to control the resource allocation and the distribution of benefits among the partners (Knoke; Todeva & Knoke).

SA typically include diverse organizations, such as suppliers, buyers, competitors, regulatory authorities, and financial and credit institutions, that together comprise the “economic organization of production” as explained by Ghoshal and Bartlett. The most common legal forms and types of SA, as outlined by Todeva and Knoke, are cooperatives (a coalition of small enterprises that combine, coordinate, and manage their collective resources); supply chains (based on long-term procurement contracts between firms); sourcing agreements (including outsourcing and subcontracting various business functions and operations); joint ventures (equity and nonequity based agreements between two parent companies that establish a new legal entity); licensing (knowledge-based agreements that transfer patented information for the use, manufacture, and distribution of products and services); franchising (contract-based organizational structure for entering new markets based on a transfer of a business concept with corresponding operational guidelines from a franchisor to a franchisee for a fee); management contracts (used by businesses to acquire management services, such as facilities or warehouse operations or fund management); turnkey contracts (large international consortia formed for the construction of new production facilities that include investors, governments, engineering firms, and multiple contractors and include responsibilities for the provision of resources, technology, know-how, and management during the development, installation, and subsequent exploitation phases); strategic industrial cooperation agreements (large contractual business networks based on joint multiparty strategic control and sharing responsibilities for performance outcomes; may include a multitude of specific alliance forms); countertrade agreements (large multiparty agreements supported by governments, where payments are agreed in the form of barters, offsets, counterpurchase, and buyback); research and development (R&D) consortia (interfirm agreements for collaboration in research and development); or various business associations and standard groups that make strategic decisions implemented via membership and participation.

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