STRATEGIC ALLIANCES MOTIVATIONS, MANAGEMENT AND INTERNATIONAL COMPETITIVENESS : THE BRITISH EXPERIENCE, 1980 - 1989

Sawsan  Y. HAJJAR

Globalization and fierce competition necessitate MNEs to rethink their strategies as well as their organizational structure in order to survive in an increasingly complex business environment. This has been accompanied with an overt wave of strategic alliances signaling that these strategic means represent an important weapon for the multinational company to use in the Global battle.

However, the British involvement in such a wave is not as clear as that of other countries, for most of previous research has been done on U.S and Japanese firms. The current study rectifies this shortfall by revealing the incidence of British foreign alliances during the period 1980-1989. The main objectives of the study are to examine the motivations of these alliances, to uncover the management practices of such, strategies, and to determine their impacts on the international competitiveness of the British partners.

During the course of the last decade British MNEs have formed 337 strategic alliances with foreign firms, mainly belonging to the "Triad Region" of the US, Europe, and Japan. Most of the alliances were concentrated in just four industries; electronics, aerospace, telecommunications, and automotive.

Technological complexity and the high cost of R&D as well as globalization and fierce competition are the main motivations for British firms forming strategic alliances.

Strategic alliances' success lies in two main considerations: one is balancing the attention in the three crucial stages of the management process (planning, formation, and operation and control), and two is understanding the issues that link one stage to the other, i.e.preparation for the formation stage and development of the plan and management team of the alliance.

The alliance performance is influenced by the scope of its activities as well as the ability of the firm to effectively manage such a strategy. Strategic alliances have positive impacts on three significant issues, namely; the international competitiveness of the British partners, the management of the firms, and their technological capabilities. Further, firms that equally importantly consider the three management stages of their alliances or network of alliances are more likely to ensure the improvement and/or enhancement of their international competitiveness.