Why Strategic Alliances Fail

538 Words Jan 22nd, 2018 3 Pages
The fundamental differences in perception and prioritization of opportunity, risk and the perception of time itself are based on cultural variations at the national and regional level. With organizational cultures being often based on national and regional differences, creating strategic alliances that are resilient in the face of increasing global economic turbulence is daunting.
Assessing and Mitigating Cultural Conflict
Lack of cultural congruency is clearly the leading cause of strategic alliance failure. The lack of congruence on cultural dimensions leads to a breakdown in trust across each of the organizations involved in the strategic alliance, with communication often the first causality (Leisen, Lilly, Winsor, 2002). At the most fundamental level, each participant or partner in a global strategic alliance has widely varying expectations and assumptions, perceptions of risk, opportunities, threats and expectations of long-term growth. The variances between cultures can often be explained by the differences in the dimensions of each culture. One of the more useful constructs or frameworks used for analyzing these differences is the Hofstede Model of Cultural Dimensions (Hofstede, 1983). This…