RENAULT-NISSAN ALLIANCE

Renault-Nissan Alliance



Renault-Nissan Alliance

Introduction

According to the Model of Doz and Hamel, there is a lack of cooperation and a receptive behaviour. There is a need of process of cooperation building between the members of the organization. The evolution of strategic alliances between inexperienced organizations starts with the generation of cooperative behaviour. An alliance occurs when two or more firms pool a portion of their resources within a common legal organization. Conceptually, an alliance is one way in which two or more companies can collaborate to achieve a specific outcome—without the need for either of the parent companies to forfeit or separate their identities and independence (Cohen & Cohen, 1983, 45). An alliance is an alternative business arrangement to more common strategies such as one company acquiring another, one company contracting to another, or the development of a company's own internal resources in order to provide competitive advantage.

Alliance business structures have proven to be a popular and viable means for a company to edge its way into the markets of foreign countries. For example, prior to 2001, China's government imposed restrictions on foreign investment. One way for companies to gain approval from the government to transact in China was to create an alliance with a local organization. Over 10,000 alliances were formed between 1998 and 2001. Further, with the opening up of European Union markets, both Japanese and American companies have actively established alliances in the form of alliances with European companies in order to strengthen their ability to compete in that market.

Stages of Alliance

The literature has identified several stages of alliances, and they all can be summarized as three stage models according to Doz and Hamel. These stages are pre-formation, formation and post-formation. Each stage includes various processes. For example the pre-formation stage is characterized by partner search, evaluation and influence processes. Effective management of these processes increases alliance viability and performance. Embodied within these processes are activities (Doz & Hamel, 1998, 86). For example, as part of the partner search processes, focal firms have to conduct anticipatory socialization (i.e. investigate culture and experience of potential partners), and fit analysis to determine how compatible they might be. Alliance cognition facilitates management of these processes and activities. Processes Research in alliance processes has traditionally focused on cooperation, communication, and coordination processes (Cohen, Ledford & Spreitzer, 1996, 643). Even though these are important, they do not seem to function as capability-distinguishing processes primarily because they are fundamental to all relationships. Based on interviews with alliance executives, teams, and managers I identified three major processes that seem to distinguish effectively managed alliances from ineffectively management ones. They include compatibility, disciplinary, and complexification processes.

Compatibility processes refer to processes that align objectives, functions and structures of allying organizations. Organizations search for, 'size-up' and eventually endorse other organizations as suitable partners. In other words, partner recruitment and selection processes supposedly lead to partnership fit. Disciplinary processes refer to those processes that institute control, limitations and sanctions for violations of norms and rules in ...