& Practice" is a new Kellogg World feature that explores
various business strategies from the perspectives of both
the classroom and the shop floor.
came to Kellogg in 1986, I was asked to develop a new MBA
elective course. Since my dissertation was on strategic alliances
in health care, I proposed a course on alliances, not realizing
that no other major business school had such a course. This
meant that I had to build the course from the ground up, developing
my own analytical frameworks for understanding how to create
and manage alliances. I’ve taught the course each year
since 1986, and the most recent iteration was oversubscribed,
highlighting the growing importance of the subject for management
I offered our first semi-annual Allen Center program on Creating
and Managing Strategic Alliances (CMSA), and it too was oversubscribed,
this time with senior executives from a range of industries.
It’s been gratifying to see that interest in strategic
alliances has remained strong, which accentuates the difference
between a useful management practice vs. a management fad.
Many CMSA participants attend based on positive comments about
the program that they have heard from prior participants in
their organizations. It means we’re doing something
right at Kellogg. Some participants have insightfully brought
their current or potential alliance partners to the program.
This enables them to acquire a shared vocabulary that helps
their communication with each other, along with the intellectual
scaffolding that helps them understand the likely promise
and pitfalls of alliances.
accumulated a wealth of examples and cases to accompany the
frameworks we use in our alliance education. For example,
most students have not made the distinction that I emphasize
in my discussion of pooling vs. trading alliances. While pooling
alliances are driven by logics of similarity and integration,
trading alliances are driven by logics of complementarity
and aggregation. I try to show how these two types of alliances
are typically quite different from each other, in terms of
their strategic goals (e.g. common vs. compatible goals),
their optimal structure (e.g. many vs. few partners), and
their managerial challenges (e.g. low coordination vs. high
this combination that I find most useful for both MBA and
executive education on strategic alliances. Practicing managers
with lots of alliance examples often don’t have the
luxury of thinking about frameworks to connect these examples
in a way that maximizes learning, and students with less exposure
to real alliances often don’t see the full value of
frameworks without examples that bring those frameworks to
life. In this way, the connection between my MBA and my executive
education teaching about strategic alliances is truly synergistic.
is also the important synergy between research and teaching
in the strategic alliance domain. Alliance research has proliferated
over the last 15 years, and we have had important conferences
on strategic alliances at
Kellogg, attracting top scholars. I am currently the director
of a new Center for Strategic Alliance Research, whose purpose
is to ensure that Kellogg remains at the forefront of research
in this area.
alliances be like in the future? While I’m reluctant
to speculate too much, one aspect of the alliance phenomenon
has now begun to grow in popularity: alliances within companies.
Executives have often told me that that it’s easier
to work with outside companies than with their own divisions,
and in response, I have proposed creating formal alliances
within companies, particularly within large firms whose divisions
are only loosely connected, but who need to work jointly.
Another version of alliances within companies is as a solution
to the problem of an entrepreneurial executive group that
feels stifled in a larger, bureaucratic organization. In such
situations, rather than forcing executives to leave the firm
(and create a potentially dangerous competitor), companies
can create internal joint ventures with such groups in which
both groups have a stake in the venture’s success.
and governance of alliances is limited only by the creativity
of their designers, and we haven’t even scratched the
surface of the ways in which alliances can help organizations
realize their strategic goals.