Analysis of the Industrial Context in Developing and Choosing the Structure of the Strategic Alliances

Document Type : Research Paper

Authors

1 Associate Prof., Department of Industrial Management, Faculty of Management, University of Tehran, Tehran, Iran.

2 Ph.D., Department of Business Management, Faculty of Management, University of Tehran, Tehran, Iran.

Abstract

Objective: Most of the failed strategic alliances have suffered from inefficient structures. Developing and choosing a structure for an alliance cannot be effective, unless the alliance's managers consider the contextual parameters. Among different contextual parameters, the industrial context is very important because each industry has its own level of process manageability and outcome interpretability; and these attributes are varied within the range of industries. Thus, this paper aimed to investigate the effect of industrial context on structure of alliances, and also, to identify the first priority for developing and choosing a structure for strategic alliances.
 
Methodology: The present research is conducted through multiple case study strategies, based on an interpretive paradigm. Applying the interpretive paradigm is necessary for such a research to reach a comprehensive understanding of the phenomenon. So, the researchers conducted 6 independent case studies on strategic alliances between Iranian companies and the international partners in different sectors such as oil and gas, telecommunication, online-services, food and beverage, auto parts, as well as pharmaceuticals.
 
Findings: Due to the research framework, industries can be classified into four groups by theirs process manageability and outcome interpretability. Alliances were not formed in isolation, and their industrial context would affect their structure and organization. The data from within-case analysis as well as cross-case analysis showed that each type of industrial context may result in a different set of variables which affect the organizational design of an alliance. The findings of the present research suggested that legal safeguards is the first priority for alliances which are formed in high manageability/high interpretability industrial context and trust would have the same role in alliances with low manageability/low interpretability context. Moreover, the formal control mechanisms in low manageability/high interpretability, and the social norms in high manageability/low interpretability are the dominant factors to develop and choose a structure for alliances.
 
Conclusion: The context is missing parameters in researches on the structure of strategic alliances. It is impossible to design a prosperous alliance without considering the context in which the alliances are formed. This research aims to clarify this issue by focusing on industrial context and to provide a better understanding of how to design a better alliance. Furthermore, it can be inferred that the structure of strategic alliances is decided by simply choosing between binary options of contractual-based and equity-based forms. The specific industrial context of each alliance force specific prerequisites and structure of alliances should provide an appropriate response to these requirements.

Keywords

References

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Journal of Business Management
Volume 12, Issue 4
2021
Pages 934-955

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