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Edited by Pietro Mazzola and Franz W. Kellermanns
Chapter 17: Strategic Decision Processes in the Realm of Strategic Alliances
17 Strategic decision processes in the realm of strategic alliances* Jorge Walter Strategic alliances are voluntary, cooperative agreements between two or more independent firms to exchange, share, jointly develop, and/or commercialize new products, services, or technologies (Gulati, 1995, 1998). Firms increasingly rely on strategic alliances to cope with the rising complexity of learning and building new sources of competitive advantage to compete successfully in the global economy (Ireland et al., 2002; Kale et al., 2002; Teng, 2007). As a result, the number of alliances has increased dramatically over the last two decades (Schilling, 2009), and so has their impact on firms’ performance. A study by Dyer et al. (2001), for instance, reports that the top 500 global business companies average 60 major strategic alliances each, and that 80 percent of the top-level executives they surveyed consider strategic alliances to be primary growth vehicles and expect alliances to account for 25 percent of their company’s market value in 2005. As a consequence, most firms today find themselves embedded in dense networks of alliances (Gulati et al., 2002). In spite of the proliferation and increasing importance of strategic alliances, failure rates lie between 50 and 80 percent (Bleeke and Ernst, 1991; Geringer and Hebert, 1991; Park and Ungson, 1997; Yan and Zeng, 1999). Scholars examining strategic alliances have acknowledged that these collaborations present significant managerial challenges to their parent organizations and have identified numerous reasons explaining the failure of alliances, such as substantial coordination costs, opportunism, conflicting strategic objectives, incompatibility in national...
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