Essay on The Strategy Of A Strategic Alliance
Healthcare is becoming more globalized. As a result, healthcare organizations are developing strategic international alliances to gain collaborative advantages. According to Kimberg (2013, para. 1) a strategic alliance is a formal relationship between two organizations that are pursuing a shared vision while remaining independent organizations. Although there are many benefits to these alliances, there are unfortunately many trade-offs and risks to consider. In fact, Hill & Jones (2008, p. 295) reported the failure rate for international alliances is over 50%. In turn, before making an alliance commitment, CMOs must determine if it is more likely to add organizational value or have detrimental repercussions.
Trade-offs and Risks
There will inevitably be internal disagreements within an alliance. Early and frank discussions of potential areas of conflict, utilizing a team-based decision making process, establishing decision-making norms, and ensuring effective communication will be critical for overcoming disagreements (Mallon, 2006, p. 3). Further, alliance partners could make decisions based on their own needs. Creating common goals and working together to develop a cohesive vision for the future will help build a team-based mentality (Mallon, 2006, p. 3).
In addition, although existing reputation is heavily considered before an alliance is created, there is not a guarantee regarding the future reputation of the partner. Unfortunately, a…