Lecture 15

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How to Make Strategic Alliances Work

Successful - dedicated strategic alliance function. Appoint a VP or director of strategic alliances with staff and resources that coordinate all alliance activity. In charge of processes/systems to teach share and leverage prior alliance experience through company. EFFECTIVE (25% higher long term success)

THE ROLE

1. improves knowledge management efforts

routine processes that share know-how

creates guidelines and manuals to manage aspects of alliance life cycle (e.g. partner selection, alliance negotiations) (HP has 60 different tools and templates, 300 pg manual to guide decision making)

SPIRE database to find overlap

2. increases external visibility

enhance visibility/reputation

3. provides internal coordination

supports alliance initiative. 1) Uses organizational legitmacy to reach across divisions and functions to request the resources necessary to support initiatives 2) Develops networks of contacts. **implicit knowledge** Ensures conflicting issues are constantly addressed

4. eliminates accountability and intervention problems

monitoring prevents problems

HOW TO

Identify key strategic parameters and organize around them

Organize to Facilitate Exchange of Knowledge on topics

Locate function at appropriate level of organization MUST REPORT TO HIGH LEVEL

LIMITATIONS

serious investment of time and money

businesses must be big enough to cover investment

deciding where to locate function and how to make it legitimate is difficult

establishing procedures may mean process > speed in decision making

RESULTS

greater stock returns, longer term strategy

enhances reputation of company as preferred partner

The relational view: Cooperative Strategy and Sources of Competitive Advantage