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Home arrow Management arrow Strategic Management in the 21st Century. Corporate Strategy

A SPECIAL NOTE ON RELATIONSHIP DEVELOPMENT IN INTERIMISTIC ALLIANCES

As with all alliances, a prerequisite of a functional, and ultimately successful interimistic alliance is the partners' development of a sufficiently close working relationship (i.e., trusting and collaborative rather than arm's length). Until a firm feels certain about a partner's intentions, future behavior, and commitment to the alliance's success, a collaborative relationship is impossible to achieve. Such a relationship requires the firm to be confident in the partner's reliability as collaboration requires not only expensive outlays of scarce firm resources, but also the sharing of valuable proprietary information which, if compromised or expropriated by a partner, can damage a firm's competitive advantage. With interimistic alliances, however, it is important to understand a few critical differences in the partners' approach to alliance relationship development.

In noninterimistic alliances, the sufficient emergence of key relational attributes such as trust is highly influenced by the history of partner interactions in the alliance over a substantial period of time.52 An extended history of interactions allows partners to make judgments about how much they can trust and rely on each other. If the interactions are consistently positive, this history will be a powerful facilitator of a close and collaborative working relationship. In interimistic alliances, however, time constraints lead to a far less substantial history of partner interactions; thus this history exerts less influence on relational perceptions than it does in noninterimistic alliances. A key question is thus: how can sufficient levels of relational attributes, such as trust, be developed absent a substantial history of partner interactions in the alliance? The answer is that partners are forced to rely more on structural, or quickly provided, credible evidence of relational intent and likely future behavior, than on consistent, behavioral evidence provided over an extended period of time. Such credible evidence that partners can have in place upfront or early in the alliance can include (1) positive signals of relationship intent based on a partner's alliance specific investments (i.e., significant, nonfungible investments that would be lost if the alliance were to end), (2) environmental incentives for firms to cooperate in the alliance, (3) a partner's reputation for fairness (an asset that in the world of alliances, firms are financially motivated to protect), and/or (4) significant pre-alliance interactions the partner firms had in dealings outside of the alliance.53

Microsoft's alliance with WebTV illustrates how environmental conditions can motivate an interimistic alliance despite the lack of a history of partner interactions. It was based largely on substitutes for real trust that came in the form of mutual recognition of an opportunity, and resource interdependence in an industry that was quickly evolving due to the convergence of TVs and PCs.54 In contrast, Corning has been able to develop cooperative alliances quickly when needed due to their reputation for fairness. This gives partners, pre-alliance, significant reason to believe they can rely upon Corning to be fair.55 The alliance between IBM and Toshiba to develop advanced display technologies was driven by mutual confidence in each other's collaborative intent based on substantial nonalliance dealings rather than on their history of interactions in the alliance in question.56

In industries such as the biotechnology and high-technology industries where many interimistic alliances exist, an almost clan-like culture has emerged amongst firms that allows managers to move from company to company, and, importantly, bring with them experiences, expectations, and contacts. As a result, there exists an almost incestuous set of linkages among executives who have worked together in the past, and have left to either work for other Silicon Valley firms or form start-ups. Needless to say, this environment often provides a rich set of pre-alliance interactions that managers and firms can rely on when needed to act as a substitute for trust developed through the alliance in question.57

 
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