Cross-border alliances: advice from the executive suite

Abstract

Purpose How does a company make its way through the cross-border alliance jungle? The article seeks to address several issues facing companies that are considering or managing cross-border alliances. Design/methodology/approach The author conducted 106 face-to-face interviews and 86 telephone interviews. Findings In this research study, three questions were answered: Why should I form a cross-border alliance? How should I select a proper alliance partner? What are the key factors for capturing substantial (alliance) value? Research limitations/implications The study focuses on the views of senior executives and top managers of public companies and senior executives and top-managers in state-owned enterprises (especially in the energy sector), subsidiaries (of big global firms) and large private enterprises. The study does not include small and medium-sized companies. The research does not focus on cross-cultural management issues. Practical implications The research indicates that some simple guidelines can improve the success rate of a cross-border alliance. Many cross-border alliances do not realize their full potential because the preparation, planning and implementation process fails to clearly define what success means. Companies should use structured approaches because cross-border alliances are a means to an end, i.e. they need to be viewed as a sequence of actions in the context of an overall business strategy – not as one-off transactions. Time and patience are required to design a cross-border alliance, structure the deal, and manage the implementation process. Cross-border alliances should not be viewed as romantic. They should be evaluated for what they are – a way of competing. Originality/value The article extends the current globalization debate by bringing into focus the issues faced by cross-border alliance participants. The conclusions are embedded in an extensive global study.