Measuring alliance value and risk : A model approach to prioritizing alliance projects

Alliances have been the focus of research studies often because they offer an attractive alternative to traditional arrangements. With a global economy, rapid product cycles, capital constraints and advances in technology, no one firm has all the capability to maintain and grow market share. Factors such as these are leading firms to consider different forms of partnerships including alliances. Contemporary alliance research is often segmented by types of arrangements, durations, returns, failures and best practices. Studies that evaluate and rank specific alliance criteria are somewhat limited. To explore specific alliance risk and value variables a study was conducted at a large manufacturing organization with extensive alliance history. A questionnaire was developed and distributed that contained both ordinal and scale rankings of specific alliance value and risk criteria. The aggregate responses were prioritized and a weight was assigned allowing for quantitative assessment for both alliance value and risk. The information was later converted into an alliance value/risk check sheet to be used to rank multiple projects.