Alliance


 * __ Alliances __**

“An alliance is an agreement between two or more parties, made in order to advance common goals and to secure common interests” (Wikipedia 2009). Sirmon and Lane (2004) discuss that organizations have been shown to experience successful alliances when complementary resources are pooled (p. 308). In today's market, global alliances enter into such agreements in order to “rapidly expand geographical market participation, create economies of scale and critical mass, reduce risks, learn new skills and technologies, and facilitate effective resource sharing” (Ho Park and Ungson, 1997, p. 279). While the benefits of such joint ventures are hypothetically enjoyed by all organizations involved, cultural barriers often hamper alliance development and lead to alliance dissolution. There are numerous reasons why alliances fail. For the scope of this handbook, we will focus solely on the cultural factors that impede with alliance success, specifically the influences of national, organizational, and professional culture and information sharing and transparency.

An organization’s national culture “is a system of shared norms, values, and priorities that, taken together, constitute a ‘design for living’ for a people” (Sirmon and Lane, 2004, p. 309). Sirmon and Lane propose that due to the nature of national culture – that it is learned and often deeply embedded in individual’s behavior – the differences in values and norms across national cultures often negatively impact alliance relationships (2004, p. 306). Yet there are some studies that show that since there are such differences, communication actually increases among the partners in the alliance which can actually lead to better performance (Sirmon and Lane, 2004, p. 310). The discrepancy in studies on the impact of national culture upon alliance performance indicates that the national culture not only impacts the alliance but also the organizational and professional cultures (Sirmon and Lane, 2004, p. 310).

Another level of cultural influence is at the organizational level where an individual adapts the cultural expectations of her/his organization. Specifically, “[…] Organizational culture provides more proximal cues for organization members’ behavior than does national culture because it provides members with an organizational identity, and facilitates collective commitments” (Sirmon and Lane, 2004, p. 311). Differences in organizational culture are more influential to the success or failure of an alliance due to the stronger identity that is established at this cultural level. Alliances that have similar organizational cultures have a greater chance to have a successful alliance relationship then those that have differing organizational cultures (Sirmon and Lane, 2004, p. 311).

Professional culture is the last cultural level outlined by Sirmon and Lane (2004). “A professional culture exists when a group of people who are employed in a functionally similar occupation share a set of norms, values, and beliefs relates to that occupation” (Sirmon and Lane, 2004 p 311). Professional culture is beyond a subculture at an organization and is seen to develop outside of an organization (Sirmon and Lane, 2004, p. 312). The difficulties arise between alliances when different professionals are required to work together but due to their professional culture there is no common ground to bring both sides together. “Second, these individuals often lack experience communicating with an auditing audience outside their professional culture. Thus communication between individuals from separate professional cultures is impaired” (Sirmon and Lane, 2004, p. 312).

Lastly, the success of alliances depend on equal sharing of information, high transparency and high receptivity ( Larsson, Bengtsson, Henriksson, and Sparks, 1998, p. 286). Many problems arise between alliances when there is not equal sharing of information thus impeding a partner’s ability to obtain and learn the necessary information to stay competitive (Larsson et al., 1998, p. 288). The level of transparency and receptivity impacts the trust between the partners involved in an alliance. Larsson et al posit, “The degree of transparency [in an alliance] may be […] restricted by the social context, such as foreign languages, customs, and traditions that disturb communication between partners of different countries of origin” (1998, p. 291). Trust and communication are crucial elements if sharing of information and high levels of transparency and receptivity are to be maintained in an alliance. 

**The structure of Teal operated much like an alliance. The group initially agreed upon our shared goal which was to address all key components of class project by the established deadline with equal participation from each group member. Through the process of working towards our group goal we were able to identify the complementary skills of each group member. Even though two of the four group members came from the same nationality, there was a presence of a difference in cultures as we interacted throughout the group project. Due to a high amount of communication, we were able to strengthen our group trust, information sharing, transparency, and receptivity our group was able to successfully achieve our shared goal. **


 *  Skills and Strategies for Alliances **

 There are a few steps that can be taken to ensure the success of an alliance. The first step would be to do your homework by researching and understanding the differences between the organizations that will be joining in on the alliance. The more management knows about the existing national, organizational, and professional cultures, the more they can evaluate if a joint venture would be successful. 

Another strategy for organizations looking to enter into alliances is to establish relationships prior to entering into the formal partnership. Not only will this help in understanding the other organization's cultural approaches but will establish a trusting relationship outside of joint venture thus when an alliance is established transparency and receptivity will more likely be high. Teal was able to be successful in our alliance due to our interaction within a larger group where we could see how we all responded and interacted. Lastly, when working with alliances, establish a double-loop learning process, whereby the processes that are done are looked at, in order to assess the system to see if cultural barriers are arising. If both organizations neglect to look at how the processes are working, barriers could arise that could be solved if a double-loop approach had been initially implemented. The double-loop learning process also requires continuous communication among all group members, not only management. Teal implemented a double-loop learning process, often instigated by one or all members of the team to ensure that we are all on the same page and that the process we adopted would meet our goal. Our continuous communication enabled us to see problems arising from our process and addressing them before they became unmanageable.  **//Strategies and Skills //** ·  Do your homework. Get to know the cultural approaches (national, organizational, and professional) before entering into an alliance.  ·  Meet, greet, and establish trusting relationships before entering into an alliance to ensure transparency and receptivity between alliance members.  ·  Support double-loop learning for the alliance relationship to catch cultural barriers before they become the reason for alliance dissolution.  ||