Abstract

Facing increasing uncertainty in their external environments, many firms have formed strategic alliances with various external actors including customers, suppliers, and even competitors (Brush & Chaganti, 1996). Alliances offer significant benefits for managing uncertainty by helping a firm achieve a more negotiated environment (Stearns et al., 1987).

At the same time, cooperation can also create uncertainty, particularly in terms of its long-term impact on a firm (Das & Teng, 1998). Despite these potential threats, alliance popularity continues to increase (Elfring & Hulsink, 2003), a somewhat surprising result, especially given that some estimates suggest alliance failure rates may range from 50 to 70 percent (Day, 1995; Park & Ungson, 2001). These difficulties in successfully managing alliances so that they attain organizational goals raise a key research question for both researchers and practitioners:
What critical factors increase the probability of alliance success (Lambe et al., 2002)?

Extant research has cited myriad success factors impacting alliance outcomes including each partner’s individual strategic directions, alliance goals, alliance commitment, and resource endowments present at the alliance’s formation (e.g., Parke, 1993). Research has increasingly noted, however, that beyond these ex ante conditions, other events that occur during the alliance’s existence (e.g., major changes in the external environment) may impact alliance outcomes (Park & Ungson, 2001). Thus, to provide a more complete view of factors impacting alliance success or failure, research needs to examine not only initial alliance conditions but also how changing firm conditions over time may impact an alliance’s eventual success or failure.

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