New Horizons in Management series
Edited by Neal M. Ashkanasy and Cary L. Cooper
Chapter 35: Contested Meanings and Emotional Dynamics in Strategic Alliances
Rajesh Kumar Introduction Strategic alliances are a preferred organizational form for many companies in a competitive global environment (e.g., Kumar & Nti, 1998; Das & Teng, 2000; Ariño et al., 2001; Shenkar & Reuer, 2005). Alliances permit a ﬁrm to share risk, accelerate entry into new markets, and/or learn from their partners, An alliance, as Luo (2005, p. 55) notes ‘is a loosely coupled system in which the investing parties interdependently share existing resources or jointly develop new resources while maintaining their respective parental identities and resource control’. Alliances encompass a wide variety of alternative organizational forms, ranging from non-equity ventures, to joint ventures. The popularity of alliances goes hand in hand with their instability (e.g., Das & Teng, 2000). Alliance instability refers to the unplanned termination of the alliance by one or more of the partners in the alliance (Inkpen & Beamish, 1997). A recent survey by Duysters et al. (2003) suggests that the instability rate could be in the range of 40–70 per cent. The issue of alliance instability has garnered a lot of attention in the literature and scholars have proposed a multitude of variables to explain instability. Hamel (1991) proposed that diﬀerences in the learning capability of the alliance partners created instability. Thus, a ﬁrm which was able to outlearn its partner would have no qualms in dissolving the alliance. Scholars have also recognized the importance of opportunistic behaviour among potential competitors and have noted that this is a precursor of instability (e.g., Kogut, 1988; Das & Teng, 2000;...
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