Academic journal article Management Review : An International Journal

The Triptych of Strategic Alliances Performance in Developing Countries

Academic journal article Management Review : An International Journal

The Triptych of Strategic Alliances Performance in Developing Countries

Article excerpt

INTRODUCTION

The proliferation of strategic alliances has been a new business trend of the global economy over the last two decades. Strategic alliances can help firms to acquire knowledge, market share, new capabilities, and other relevant resources (Beamish & Lupton, 2009). Moreover, there is a substantial literature on strategic alliances performance including capacity building, longevity, survival, productivity, stability, and instability. The research on strategic alliances in developing countries has pointed out the frequent intervention of the governments in such countries. Governments mediate the interaction between the MNCs and partners in developing countries. A different trend, until now marginal, now gathers increasing interest in strategic alliances taking root in developing countries (Sovannara and McCullough, 2010; Friedman and Kalmanoff, 1961; Beamish, 1984; Schaan, 1983; Child and Faulkner, 1998). In effect, the hostile business environment in these countries and the difficulties related to utilising resources brings these authors to privilege strategic alliances as the most appropriate means to acquire the skills and resources vital to the company and to postulate that strategic alliances can even serve as macroeconomic models. It is increasingly acknowledged that strategic alliances can even constitute essential means of development in a global economy that is more and more integrated. To do this, the performance of strategic alliances must be superior to those of other companies that are locally entrenched. In such an instance, a number of researchers have noted the importance of the triad, knowledge, education, and the financial ability to draw funds as determinants of this performance (Marcotte, 1999; Lyles, 1994). Consequently, the objective sought throughout this research is, in part, to evaluate the performance of strategic alliances compared to other companies, and as well to further reflect more deeply on the consequences of this performance for improving the economic situation in developing countries.

LITERATURE REVIEW

Background of strategic alliances

Inter-company cooperation agreements cover a large range of contractual obligations such as commercialization, licensing, contracts for exchanging technology (Lowen and Pope, 2008; Contractor and Lorange, 1988). The common subsidiary appears when at least two independent companies share the capital and the control of a distinct legal organizational entity. Our research is centered on the particular case of developing countries. The first large studies pertaining to strategic alliances, and especially on the co-firms established in developing countries, were realized at Columbia University (Friedman and Kalmanoff, 1961; Friedman and Beguin, 1971). Their results were then corroborated by Reynolds (1979) and Tomlinson (1970) but lacked surprise and revelation. At the beginning of the 1980's, the team at the University of Western Ontario, under the stewardship of professor Beamish, evolved the problematic of establishing strategic alliances in developing countries as an autonomous and structured research field (Beamish, 1984; 1985; 1988; Schaan, 1983; Inkpen, 1992; Hébert, 1994). Therefore, the rapid development of strategic alliances in developing countries (via the privatization of public companies) observed by these authors served to complete the movement initiated by multi-national joint ventures described by Dussauge and Garrette (1995). Historically, these multinational joint ventures that operated in developing countries for many decades followed government legislative constraints rather than purely economic objectives. However, the economic environment of these countries was always anchored by a strong predominance of public companies and other types of organizations such as foreign private companies, private/public partnerships, and local private companies. Nonetheless, in the last decade, the context of globalization has transformed this near quasi-political environment into a vast domain of socio-economic changes favouring the emergence of strategic alliances. …

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