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.

Citation

Klaas Jagersma, P. (2005), "Cross‐border alliances: advice from the executive suite", Journal of Business Strategy, Vol. 26 No. 1, pp. 41-50. https://doi.org/10.1108/02756660510575041