Ideally, firms normally engage in huge alliance so as to extend and secure their growth as well as competitive advantage. In most cases, alliance truly exhibit amazingly low rates of success implying that most of them end up failing in the long run. This article therefore clearly discusses the way within which firms are capable of addressing these potential causes of failures through pinpointing some of the key drivers for success in most of the alliances (Kale and Singh, 2009).
It will be recognized that the authors use various facts to help firms in managing their strategic alliances. Firstly, firms are capable of attaining success with the individual alliances through considering the critical factors within the various phases regarding the life cycle of the alliances. Various factors necessitate success within the alliance lifecycle which extend to include partner compatibility and complementarity and partner commitment. Other factors include relational governance, contractual provisions and equity ownership or sharing. The second fact within this article reveals that firms can truly upsurge their overall anticipated alliance success through institutionalizing and developing firm-level capabilities in order to manage alliances. Creating capabilities which focus on knowledge-based processes involves consistent support and sponsorship from senior management (Kale and Singh, 2009).
Thirdly, the authors highlight on the emerging issues within the alliance context, where firms ought to be aware of a new alliance classes between firms and individuals or not-for-profit organizations, the paybacks of adopting a portfolio approach towards management and alliance strategy as well as the opportunity of transferring alliance capabilities towards effective management regarding other inter-firm relationships, counting acquisitions.
One of the key textbook providing similar information to that of Kale and Singh is the “Managing small business: An entrepreneurial emphasis” written by Moore. In pages 224-228, it will be realized that Moore begin by defining the basic goal of the strategic alliances with helps in guiding them to attain the maximum benefits. This implies that strategic alliances are very crucial especially for the small firms with the increased market and financial risks. He agrees with the fact that alliances fail, a situation that may be resolved to preserve the overall market performance as well as the anticipated returns. Moore further points out that strategic alliance failures may be avoided by imitating the success channels of the successful alliances (Moore, 2008).
Based on the various facts presented within the article, the authors do not present any form of faulty reasoning. Critically, most of the alliances end up failing, a situation which may be resolved by focusing on the key success drivers utilized by the alliances that are successful despite the various risks within the market. They should as a result focus on the alliance life cycle and creating firm-level capabilities to attain success.
Various concepts have been used within the article which ensure that individuals fully understand the goal of the authors. Strategic alliance is used to refer to a purposive relationship existing in two or more sovereign firms which involves the co-development, exchange and sharing of capabilities or resources in order to attain mutually relevant benefits. Organizational capability is another key term used within the article to refer to the capacity articulation, expertise and materials an organization requires so as to perform its core functions (Kale and Singh, 2009). Additionally, alliance life cycle is used to refer to the critical processes or procedures within which firms follow in order to avoid alliance failure.
Kale, P. and Singh H. (2009, August), “Managing Strategic Alliances: What Do We Know Now, and Where Do We Go From Here?”Academy of Management Perspectives, 23 (3), 45-62.
Moore, C. (2008). Managing small business: An entrepreneurial emphasis (14th ed.). Australia: South-Western/Cengage Learning.