Developing a Model of the Risks of International Strategic Alliances in Home Appliance Industry in Iran

Document Type : Research Paper

Authors

1 Associate Prof., Department of Business Management, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

2 Ph.D. Candidate, Department of Business Management, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

Abstract

Objective
Today, many Iranian and foreign companies consider partnering with each other. Iranian companies strive to partner with foreign companies to build the capacity needed to achieve their business goals and foreign companies also tend to reach new markets by partnering with local partners. However, despite the government's emphasis and the efforts of Iranian companies to attract foreign partners, this has hardly happened in the Iranian home appliance industry, indicating risks to both domestic and foreign investors. Therefore, the present study aims to investigate, identify and model the risks that Iranian companies face in Strategic Alliance with foreign companies in Iranian home appliance industry.
Methodology
This research is done in pragmatism paradigm, using exploratory sequential mixed method. In the qualitative phase, the Strategic Alliance risks are discovered through semi-structured interviews using qualitative content analysis approach. Then in the quantitative phase, the required data were collected by a questionnaire from industry experts and financial professionals and were analyzed with Interpretive Structural Modeling (ISM). The statistical population includes the experts, university professors as well as the board of directors, senior managers and specialists of companies active in Iran home appliance industry and their foreign partner.
Findings
187 phrases were extracted from a total number of 18 interviews with 20 experts. These phrases were then classified into 69 indices using content analysis. The final model consists of a total of 22 elements as the perceived risks of international Strategic Alliance in three stages of the formation, operation and termination of alliance.
 
Conclusion
The results show that at the beginning stage (formation) of Strategic Alliance, the factors of “partner selection”, “opportunistic behavior”, “negative inter-dependence to the partner” and “weaknesses in international contracts” are at the highest level and have the least impact. Besides, "political risks" and "legal risks" are at the second and third levels having more impact on other factors. At the operational stage of the alliance, factors such as "low value of made-in-Iran brand", "internal differences in management", "non-compliance", "opportunistic behavior", "high price", "poor raw material supply infrastructure" and "demand risks" are at the highest levels with the least impact and the factors such as "political risks", "legal risks" and "economic risks" are at the lowest level with the highest impact on other factors. At the termination stage of alliance, the factors of "international litigation problems" and "evaluation and determination of the partners' share" are at the highest level having the least impact and the "legal risks" factor is at the lowest level having the most impact on the other factors. The sets of risks involved in each stage of the Strategic Alliance have mutual impacts on each other.

Keywords

Main Subjects

References

References
Adnan, H. (2009). An assessment of risk management in joint venture projects (JV) in Malaysia. Asian Social Science, 4(6), 99-106.
Agarwal, R., Croson, R., & Mahoney, J. T. (2010). The role of incentives and communication in strategic alliances: an experimental investigation. Strategic Management Journal, 31, 413-437.
Ahiaga-Dagbui, D. D., Fugar, F. D., McCarter, J. W., & Adinyira, E. (2011). Potential risks to international joint ventures in developing economies: The Ghanaian construction industry experience. Conference: Proceedings of the CIBW 107 Conference on Innovation and Sustainable Construction in Developing Countries, At Hanoi Vietnam.
Anderson, S.W., Christ, M.H., Dekker, H.C., & Sedatole, K. L. (2015). Do extant management control frameworks fit the alliance setting? A descriptive analysis. Industrial Marketing Management, 46, 36-53.
Bahrami, M., Seyed Hashemi Toloon, M. (2013). Vehicle Owners’ Risk Perception of Gas Electronic Payment Method. Iranian Business Management, 4(14), 21-40. (in Persian)
Brockhoff, K. (1992). R&D cooperation between firms-a perceived transaction cost perspective. Management science, 38(4), 514-524.
Danaeefard, H. (2010). Srategies of Theory Building. Tehran: Samt. (in Persian)
DanaeeFard, H., Alvani, M., & Azar, A. (2004). Methodology of quantitative research in management: a comprehensive approach, Tehran: Saffar. (in Persian)
Das, T., & Teng, B.S. (1999). Managing risks in strategic alliances. The Academy of Management Executive, 13(4), 50-62.
Das, T. K., & Teng, B. S. (2001). A risk perception model of alliance structuring. Journal of International Management, 7, 1-29.
Delerue, H. l. n. (2005). Relational risk perception and alliance management in French biotechnology SMEs. European Business Review, 17(6), 532 – 546.
Ebrahimi, M., Rahmanseresht, H. (2014). Strategic Alliance (Cooperation in competitive environment). Tehran: Allameh Tabataba’i. (in Persian)
Fréchet, M. (2002). Gérer la dynamique relationnelle des partenariats d’innovation: une vision par les professionnels. CRG Toulouse.
Ghaedi, M. R., Golshani, A.R. (2016). Content Analysis Method: from Quantity-Orientation to Quality-Orientation. Journal of Psychological Models and Methods, 30, 57-82.
(in Persian)
Gulati, R., Wohlgezogen, F., & Zhelyazkov, P. (2012). The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances. Academy of Management Annals, 6, 531-583.
Hagedoorn, J., & Sadowski, B. (1999). The transition from strategic technology alliances to mergers and acquisitions: an exploratory study. Journal of Management Studies, 36(1), 87-107.
Haghighi, M., Jalali, S. (2018). Strategic Alliance Formation from the Institutional Theory Perspective. Iranian Business Management, 9(4), 717-738. (in Persian)
Hamidizadeh, M., Zareh Ahmadabadi, H., Sangbor, M. (2014). Analyzing of critical success factor of strategic alliances (Case study: Tile & ceramic industrial cluster of Yazd). Iranian Business Management, 6(3), 517-534. (in Persian)
Hui-hui, X., & Qing, L. (2011). Study on the Risk Control of Logistic Strategic Alliance in Shipping Enterprises. Paper presented at the International Conference on Management and Service Science (MASS), Wuhan.
Hrebiniak, L. G. (2013). Making strategy work: Leading effective execution and change. FT Press.
Kale, P., & Singh, H. (2009). Managing strategic alliances: What do we know now, and where do we go from here. Academy of management perspectives, 23(3), 45-62.
Kale, P., Singh, H., & Perlmutter, H. (2000). Learning and protection of proprietary assets in strategic alliances: Building relational capital. Strategic Management Journal, 21(3), 217-237.
Lashkarbolouki, M., Khodadad Hoseini, S. H., Hoseini, S. M., Hamidizadeh, M. (2012). Designing the Prescriptive Process Model of Robust Strategy Using Mix Method. Strategic Management Thought, 6(2), 121-151. (in Persian)
Libby, R., & Fishburn, P. C. (1977). Behavioral models of risk taking in business decisions: A survey and evaluation. Journal of Accounting Research, 272-292.
Mahoney, D., Trigg, M., Griffin, R., & Pustay, M. (2001). International Business: a managerial perspective: Pearson Education Australia.
March, J.G., & Shapira, Z. (1987). Managerial perspectives on risk and risk taking. Management science, 33(11), 1404-1418.
Mir Gafouri, S. H., Shabani, A., Mohammadi, Kh., Mansouri Mohammad Abadi, S. (2016). Identification and Ranking of Effective Factors Which Optimize Qualities of Educational Services Using Combined Approaches of Fuzzy VIKOR and Interpretive Structural Modeling (ISM). Journal of Instruction and Evaluation, 9(34), 13-33. (in Persian)
Nooteboom, B., Berger, H., & Noorderhaven, N. G. (1997). Effects of trust and governance on relational risk. Academy of Management Journal, 40(2), 308-338.
Ozorhon, B., Arditi, D., Dikmen, I., & Birgonul, M. T. (2007). Effect of host country and project conditions in international construction joint ventures. International Journal of Project Management, 25(8), 799-806.
Rai, D.R., & Saidi, A. (2008). Principles of Financial Engineering and Risk Management. Tehran: Samt. (in Persian)
Rodríguez, E. (2008). Cooperative ventures in emerging economies. Journal of Business Research, 61, 640–647.
Sarmad, Z., Bazargan, A., Hejazi, E. (2012). Research methods in behavioral sciences. Tehran: Agah. (in Persian)
Todeva, E., & Knoke, D. (2005). Strategic alliances and models of collaboration. Management Decision, 43, 123-148.
Vares, S., Hasangholipour, T., Habibi, M. (2013). The Survey of effective factors on the performance of Joint Ventures (JV). Iranian Business Management, 5(4), 141-160.
(in Persian)
Wang, T. (2013). A dynamic evaluation of the enterprise technology alliance risks through F-integral. Paper presented at the 2013 6th International Conference on Information Management, Innovation Management and Industrial Engineering.
Williamson, O. E. (1975). Markets and hierarchies. New York, 26-30.
Williamson, O. E. (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 269-296.
Young-Ybarra, C., & Wiersema, M. (1999). Strategic flexibility in information technology alliances: The influence of transaction cost economics and social exchange theory. Organization Science, 10(4), 439-459.
Zaheer, A., McEvily, B., & Perrone, V. (1998). Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance. Organization Science, 9(2), 141-159.
Journal of Business Management
Volume 11, Issue 3
2019
Pages 543-564

Files

Share

How to cite

Statistics