Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Making successful alliances

30.11.2007
One in four strategic alliances is a failure. A new study shows that short-term success is no guarantee of success in the longer term, says researcher Randi Lunnan at BI Norwegian School of Management, who has conducted a study of 100 strategic alliances over a period of five years.

Despite experiencing frequent failure, a large number of companies continue forming strategic alliances to ensure their continued growth. What is crucial is finding a good match in which the knowledge, experience, and strategic resources of the parties involved will complement each other.

Associate Professor Randi Lunnan of BI Norwegian School of Management, together with Sven A. Haugland from NHH, has conducted a comprehensive study of 100 strategic alliances which were followed over a period of five years.

The results of this study have now been published in the leading professional publication Strategic Management Journal.

‘The honeymoon period’

In the business arena, too, newly established relationships are much more vulnerable than those which have lasted for some time. The researchers found that five years after their formation, 66 of the 100 strategic alliances studied were still in existence.

Some third of the alliances (34) had been terminated during the five years. This does not necessarily mean that they were unsuccessful: some strategic alliances are formed for a particular purpose and a specific period. However, more detailed investigation found that 25 of the alliances investigated had been terminated before the end of their contract period.

This means that one in every four strategic alliances (25 per cent) was a failure. Among the reasons given for this were “We couldn’t work together,” “The alliance was not regarded as important,” or “The alliance didn’t work as intended.”

“Alliances that are still at the honeymoon stage are more likely to fail than ones that have survived a few problems,” explains Randi Lunnan.

Success in the short-term

The researchers into company strategy were interested in discovering the factors that are necessary in order for strategic alliances to succeed in both the short and the long-term.

They employed several different methods of measuring successful alliances and looked at the net contribution made by the alliance, company growth, market growth, new products, new expertise, and establishment in new markets.

“The alliances which fail are generally fairly recent and ones which are felt to have little strategic importance for the parties involved,” says Lunnan.

The most important factors for the success of an alliance in the short-term are that the partners can provide each other with resources that are complementary and have strategic importance.

Short-term success is far from being a guarantee that the alliance will succeed in the long-term. The factors which are vital for success in the short-term are not the same as those which produce positive results over a longer period.

Alliances must be nurtured

An alliance which produces good results shortly after being established will not necessarily be equally successful five years later. Similarly, an alliance with only modest initial results may blossom subsequently if the companies involved invest in the resources of their personnel and are willing to be flexible and to adapt to the changes required over a longer period.

The conclusion which Randi Lunnan draws from the study is that “The success of an alliance is relatively transitory.”

The researchers also show how management changes in one of the parties involved can have a negative effect on results over a period of time.

References:

Lunnan, Randi, Haugland, Sven A. (forthcoming): “Predicting and Measuring Alliance Performance: A Multi-Dimensional Analysis”, Strategic Management Journal.

Audun Farbrot | alfa
Further information:
http://www.bi.edu

More articles from Studies and Analyses:

nachricht Europe’s Demographic Future. Where the Regions Are Heading after a Decade of Crises
10.08.2017 | Berlin-Institut für Bevölkerung und Entwicklung

nachricht Scientists reveal source of human heartbeat in 3-D
07.08.2017 | University of Manchester

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

Gold shines through properties of nano biosensors

17.08.2017 | Physics and Astronomy

Greenland ice flow likely to speed up: New data assert glaciers move over sediment, which gets more slippery as it gets wetter

17.08.2017 | Earth Sciences

Mars 2020 mission to use smart methods to seek signs of past life

17.08.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>