| This dissertation is an attempt to explore conceptually and empirically a problem-driven issue: why do strategic alliances fail?; Drastic changes in technology and the competitive structure of the world economy during the last two decades have led to greater interdependence among competitors. Accordingly, there have been a shift in interfirm relations from competition to cooperation. Within this perspective, strategic alliances have emerged as a significant mechanism to foster interfirm collaboration.; This recent trend of alliance formation has drawn a lot of research attention in economics and business policy areas. Most of these studies have focused on the rationale for forming strategic alliances; few have questioned their efficacy in improving the partners' performance. Despite the increasing popularity of strategic alliances, many strategic alliances fail. In fact, failure in strategic alliance may be more the rule rather than the exception.; A theoretical framework is first developed to delineate the dynamics of alliance failures, based on transactions cost economics and organization theories. In this framework, we theorize that strategic alliances fail because of rivalry and/or managerial complexity within an alliance. Rivalry within an alliance affects the partners' behavioral dispositions, leading them to pursue individual agendas rather than collective goals in an opportunistic way. Strategic alliances can also fail because of managerial complexity that arises with coordination and integration.; We examined equity type alliances formed between 1979 and 1986 in the electronics industry and which included at least one U.S. firm. The data were augmented with coded information based on case studies, published documents, and selective telephone interviews with top managers. The statistical analysis applies event history analysis to test the hypotheses.; The results of empirical testing provide strong support for the theoretical proposition that strategic alliances fail because of the rivalry within the alliance. This suggests that the partners' behavioral disposition was mainly responsible for alliance failure. The supposition, which posits the effects of managerial complexity on alliance failure, is not supported. Overall, empirical testing offers strong support for the transactions cost theory view on alliance formation and failure. The test results of this dissertation lead to various normative and research implications in managing and understanding the dynamics of strategic alliances. |
