Explaining alliance partner selection: Fit, trust and strategic expediency

How does a firm select an alliance partner? The decision-making process associated with selecting an alliance partner is complex and challenging, especially when one considers the high rate of alliance failure. When managers have access to all relevant information and are not under time constraints, then they can use a rational, analytical process to evaluate strategic fit among alternatives. However, this becomes much more difficult when there is inadequate information. One response is to rely more on trust among individuals and between firms. We summarise the advantages of relying on trust, but also illustrate how relying too much on either individual or firm-level trust can be problematic. Another response is to rely on and develop strategic expediency. This often involves the use of non-rational decision-making components, and places primary importance on decision speed rather than comparison of alternative solutions. We identify several techniques that individual managers can use to improve their strategic expediency. We also provide recommendations to enhance firm-level strategic expediency by developing a template focusing on formalised criteria for alliance partners. (c) 2007 Elsevier Ltd. All rights reserved.