Cultural Aspects in Alliances

As discussed in the preceding sections, alliances among firms naturally would result in many organizational changes. Leavitt (1965) concluded there are four types of interacting variables to consider when dealing with organizational change, especially in large industrial organizations: task variables, structural variables, technological variables, and human variables. He proposed structural, technological, and people approaches to organizational changes, which derive from interactions among the four types of variables mentioned above.

The four variables are highly interdependent so that a change in any one variable usually results in compensatory changes in other variables. The introduction of new technological tools — computers, for example, may cause changes in structure (communication system), changes in people (their skills and attitudes), and changes in performance and tasks. Therefore, it is imperative to consider all areas that might be affected when a company plans to introduce change to an organization.

Pre-existing people related problems at a target company, often cause many alliances to fail to reach their full financial and strategic potential. Numerous case studies report failure of alliances due to lack of consideration for the potential impact of behavioral and structural aspects (Burrows, 2000; Numerof & Abrams, 2000). To build an effective alliance, institutions must pay particularly close attention to cultural, personality and structural incompatibilities. Leaders from alliance institutions need to recognize the personality differences in their managers, as well as, the demands required by the life cycle stage of their organizations (Segil, 2000). It has also been demonstrated that successful alliance partners share many strong similarities regarding performance and relationships (e.g., people skills) (Whipple & Frankel, 2000). Understanding potential incompatibilities gives institutions contemplating alliances a solid foundation on which to explore the feasibility of joint projects. It also increases the likelihood the alliance will operate successfully (Whipple & Frankel, 2000).

Successful alliances are impeded, when the culture of one or both associations highly differ in value. "High control value" is inconsistent with the toleration for ambiguity and the "willingness to compromise" often required for strategic alliances. Maron and VanBremen (1999) suggests the use of William Bridges' Organizational Character Index, which can be a useful tool for analyzing the cultural differences between two associations to determine how well they might work together. It promotes better understanding between two associations; fosters an appreciation for what both partners could bring to an alliance; and identifies underdeveloped qualities in both associations that could inhibit the success of an alliance.