Starting up a business entity requires financial and human resources. Not all companies have access to all the resources they need to operate their business or to expand their operations and activities. Financial resources can be accessed by a term of a business loan or by selling shares and recruiting shareholders.
However, this practice is not very favorable by most companies, since it is a relatively slow process and may not acquire access to the other resources that the company need. For this instance, many companies seek to form a strategic alliance with other companies. Establishing a strategic alliance is very beneficial as it would result in allowing the involved parties to share access to shared resources and to share knowledge & experience.
Before taking the decision to form a strategic alliance, firms must consider the different partners and their opportunity cost of alliancing with one rather than the other. Many firms tend to be opportunistic in their relationship with their partners. Therefore, it is very crucial to reflect on the benefits that both parties would bring to the table before engaging together. More importantly, both parties should have an explicit agreement that declares each other roles & responsibilities and determines their potential opportunities.
To establish a successful relationship with a potential partner, both partners must sit together and agree on a code of conduct for their operations with big respect to work ethics. Empathy & vulnerability are a crucial driver to establish the right work ethics needed to maintain the longevity of a strategic alliance relationship. For instance, Partnerships thrive when members feel protected within the partnership, which is a result of showing empathy and being vulnerable towards each other. You sincerely,
Omar Alhaj Ali
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