Collaboration in Strategic Alliances: Cooperation and Coordination

Strategic alliances are set up to foster collaboration that cannot be achieved through market transactions. In fact, collaboration is often considered the defining feature of alliances — that is, “voluntary arrangements between firms involving exchange, sharing, or codevelopment of products, technologies, or services” (Gulati, 1998: 293). However, many alliances yield disappointing results due to a breakdown in collaboration (Kale and Singh, 2009). Such breakdown may occur due to failures in cooperation or in coordination (Gulati, Lawrence, and Puranam, 2005; Gulati and Singh, 1998). Cooperation is the alignment of incentives, or the extent to which partners are willing to work together. Cooperation is not guaranteed because alliance partners maintain their separate goals. Failures of cooperation can occur for example if synergies are one-sided (i.e., only one partner benefits) or if partners are also each other’s competitor.