THE ROLE OF STRATEGIC ALLIANCES IN THE INTERNATIONAL-ORGANIZATION OF INDUSTRY

In this study the motivations for entering international strategic all iances are investigated. The reasons for alliance entry reflect the wa ys firms are restructuring economic activities. A theoretical basis fo r the study is built from the conceptual arguments of transaction-cost theory and resource-dependence theory. A partial synthesis of the two approaches suggests that alliances are especially well suited to the combined pursuit of increased efficiency and reduced uncertainty. The empirical investigation is based on a series of thirteen case studies, each involving a small Canadian firm and a foreign partner. Growth re sulting from efficient access to foreign markets was an important reas on for Canadian firms to enter alliances. Collaboration enabled small firms to learn about market demand. This information reduced the uncer tainty of international marketing, and was used to guide the developme nt and modification of products. Complementary abilities, where the Ca nadian firms offered technology and their foreign partners had marketi ng capabilities, were at the heart of most alliances. In general, alli ances were considered necessary to protect proprietary information and to forge strong links with firms taking over important downstream fun ctions.