Strategic Alliances

Challenges of Forming a Strategic Alliance
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Market globalization has contributed to the establishment and rise of strategic alliance in the management and organization of firms. This is by business organizations coming together and forming an alliance with the goal of achieving a synergy and working together to achieve bigger goals that would not be achieved through individual efforts. Therefore, strategic alliances are agreements between two or more independent companies to cooperate in the manufacturing, development, or sale of products and services or other business objectives (CFI, Education Inc., 2018). However, the road towards forming a strategic alliance faces several challenges. The purpose of this paper is to discuss the challenges of forming a strategic alliance.
Searching for an appropriate partner is crucial when setting up a strategic alliance. Choosing a wrong partner is demanding especially when it is not able to contribute to the growth of the business. This is not an easy task for companies as they have to invest a lot of time and resources trying to research for a partner that upholds similar policies and values within its organization culture (Brown & Hogg, 2012).
Building a mutually beneficial alliance is another challenge in forming an alliance. Alliances are meant to benefit both business parties involved. It is human nature to be motivated towards self-interest and therefore it is usually difficult to enter into a business relationship that would benefit both parties (Robinson, 2012).

Another challenge is the issue of trust and honesty. When there is the absence of trust and honesty, there is no room for the existence and survival of partnership. Therefore, trust cements the partnership among the involved parties.
References
Brown, A., & Hogg, P. (2012). Successful strategic alliances: Choosing the right partner.
Financial Post.
CFI Education Inc. (2018). What are Strategic Alliances? Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/strategy/strategic-alliances/Robinson, B. (2012). Why Strategic Alliances don’t work. Forbes Magazine.