While strategic alliances have their advantages, they do have their disadvantages. Precious know-how and company secrets may be appropriated, or one partner may try to dominate the relationship leading to conflicts and eventual alliance dissolution (Yoshino & Rangan, 1995).
Managing a global alliance may be an added managerial chore that is compounded by the different corporate and national cultures.
An organization should choose strong experienced partners who have a good strategic fit, and have to clearly define each global partner’s role. To minimize risk, an organization should continuously monitor the relationship for performance and profitability (Yoshino & Rangan, 1995).
Describe the advantages of strategic alliances, and why many of them fail? Give examples and support your arguments with research.