Role of Behavioral Factors in Strategic Alliances

Abstract

The number of strategic alliances formed between organizations has increased dramatically and are projected to continue increasing over the next few years. Behavioral and cultural factors play a major role in the success (or failure) of a strategic alliance between partners, but many managers pay little attention to this aspect while in the process of negotiations. This paper highlights a number of human and organizational culture issues, which played a major role in the process of developing a strategic alliance between a major telecommunications organization and several retail electricity organizations. A framework for strategic alliance was developed for this new market situation, which helped the organizations involved understand the future informational requirements and dependence of the partners on one another.