Section 3: Understanding Organisational Collaboration

For all organisations in the 21^st century, but especially for SMEs, collaboration is offering a way forward in the new e-commerce environment. There is, however, an almost bewildering array of interfirm collaborations that range from informal partnerships, through to strategic alliances, to joint ventures and mergers. These are used today to increase competitive advantage and to deal with the inherent flux, complexity and uncertainty of a volatile global marketplace. From a theoretical perspective, such collaboration has often been explained in terms of rational economic transaction-cost or resource-based theories of the firm, or more strategic, behavioral and sociological perspectives grounded in institutional theory, culture, and the like as indicated in Section 1.3. Today, much interest resides in the issue of intellectual capital and knowledge management and so current approaches to collaboration are exploring knowledge management and learning theory perspectives on collaboration.

Our focus in this study is on one form of interorganisational collaboration - strategic alliances, ones that exclude mergers and acquisitions but can incorporate joint ventures or the much more informal agreements among organisations without equity sharing (Judge & Ryman, 2001). Strategic alliances may be defined as voluntary cooperative agreements between organisations, grounded in achieving competitive advantage for the organisation partners, creating value, and sharing rewards (Bennett, 2001; Das & Teng, 2000). Through appropriate synergies, they make possible what one organisation alone cannot achieve, provide access to necessary external resources, foster increased learning and requisite change (Hoffmann & Schlosser, 2001).

Davies (2001, 9) provides a more specific, useful definition of strategic alliance: "... a less-than-arm's length relationship between corporations that is characterized by a merging of complementary interests, the sharing of privileged information, and intimate collaboration and cooperation to achieve strategic goals and objectives." Ring (2000, 152) also emphasises that "an alliance involves collaboration between two or more firms that retain their autonomy during the course of their relationship ... an alliance also is a means to an end." For him, however, a crucial issue is the alliance as a means of implementing strategy rather than being a strategy itself. Moreover, Ring argues that (2000, 154): "Alliances are more likely to be efficient and equitable, if the parties are careful to undertake appropriate levels of sense-making, understanding and committing processes during the course of negotiating, transacting, and managing their alliances."

Dussauge and Garrette (1991) emphasise that key characteristics of strategic alliances are those of multiple decision-making centres, clash of interests, and constant bargaining. In this sense, alliances are unstable forms of organisations defined by the nature of the relationship among allied organisations. However, when successful, they can enhance the competitive positions of partners involved in the alliance. Truly strategic alliances are those combining partner capabilities and contributing to the partner organisations' strategies.

Koza and Lewin (2000a) suggest two major rationales for alliance formation - exploitation as elaborating, strengthening, and increasing efficiencies in an organisation's existing capabilities, and exploration as trying out or initiating new capabilities and assets. For them, these rationales result in three types of strategic alliances:

• Learning alliances focussed on exploration and building up knowledge of the partners, especially in relation to markets, new core competencies, and new technologies.
• Business alliances (including networks) focussed on exploitation in order to attain new rewards from the combination of partner skills or assets, often in relation to market positioning.
• Hybrid alliances, combining both exploration and exploitation motives for collaborating.

Yeheskel et al. (2001) suggest three theoretical explanations for entering strategic alliances:

• Transaction cost theory focussing on the rationale of reducing production and management costs;
• Strategic theory focussing on the creation of synergistic and competitive advantages expanding an organisation's resources base;
• Organisation learning and knowledge theory focussing on building an organisation's skills and capacities through acquisition of specialised and vital knowledge from other organisations.

For the present study the latter two provide the bases for the research undertaken, although cost constraints were certainly a major motivating factor for a number of ITOL participants.

Whatever approach one adopts, the need for a more balanced view of alliance functioning has been stressed in recent thinking. Thus, in addition to focussing on the hard side of alliance management (e.g., financial and operational matters), researchers have urged the need to pay attention to the soft side of alliance management (e.g. alliance relationship capital or the quality of the relationships involved). This includes socio-psychological aspects and partner interaction patterns and time devoted to such - which serve as the bases for enacting and implementing the alliance. Key aspects of this soft side of alliance management include trust and commitment, culture, information exchange, and norms of reciprocity (Cullen et al., 2000).

In a recent study of strategic alliances, Hoffmann and Schlosser (2001), however, found that such 'soft' dimensions, while important, are not sufficient on their own. Equally important for alliance success are an array of 'hard' facts, including strategic compatibility and appropriate governance mechanisms. Moreover, to reap the full benefits of collaboration, appropriate partnership preparation and strategic planning, before and during the evolution of the partnership are crucial.

Even incorporating both 'hard' and 'soft' dimensions of collaboration, clearly there are risks to such collaborative ventures as the high failure rates demonstrate: "A total of 40 to 70 per cent of all forms of joint ventures or alliances fail" (Lawson, 2001, 2). While multiple variables may be involved, there are essentially two broad risks. First, the uniqueness of relational risk in strategic alliances is about lack of participant commitment to the alliance and potential opportunistic behavior undermining alliance prospects. Second, performance risk concerns the probability that, although participating organisations commit fully to the alliance, an alliance may still fail (Das & Teng, 1999).

Alongside such risks, the many dilemmas in alliances include the following:

• Collaboration or going it alone;
• Choosing the most suitable partners;
• Designing the appropriate collaborative organisation;
• What type of alliance is the best;
• Equality of benefits for partners in the alliance;
• The time period of the alliance;
• Cooperation versus individual partner interests;
• Protection of intellectual property;
• Cooperation and competition (Dussauge & Garrette, 1999).

3.1 Partnerships between competitors or non-competing organisations

Increasingly there is evidence of the capacity of organisations to deal with not only non-competing organisational collaboration but also partnering with competitors for alliance advantage. This is especially true in the new technologically enabled landscape as indicated in the following: "This phenomenon of competitive co-evolution, enhanced by digital platform features, links the competitive dynamics of both service suppliers and users in b2b digital marketplaces, thereby designing different co-evolution paths" (Ordanini & Pol, 2001, 282).

Nevertheless, while competitive alliances require even more skill to manage, there is indeed a sense in which all alliances involve competitive collaboration or 'co-opetition' to some extent. As Doz and Hamel (1998, 101) explain:

... an alliance almost always has two dimensions: one is concerned with what the partners can achieve together, the second with what the partners can gain for themselves ... quite apart from any issues of rivalry in the marketplace between partners, relationships between alliance partners entail both cooperation and competition. Thus winning through alliances is, to a significant degree, also a matter of winning within one's alliance.

Others put it another way: "Without adequate cooperation, alliances cannot be operated smoothly. Without sufficient attention to competition, alliances will unwittingly lose their competitive advantage and equitable rights and rewards. Both cooperation and competition must be preserved in an alliance as dynamic and permanent conditions. A sense of competition should be interwoven with the spirit of cooperation" (Das & Teng, 1999, 59).

In the current research study 30% of the 35 total projects responding to the survey involved competitive collaboration.

3.2 Some key variables

3.2.1 Trust and commitment

Researchers and practitioners in the field of interorganisational collaboration all agree that a crucial alliance competency is that of partnership trust and commitment to the alliances (Rule et al., 1999). As Judge and Ryman (2001, 75) explain: "Collaborative and collective approaches create trust in alliances; competitive and individualistic approaches create distrust. This trust is an essential glue that holds strategic alliances together, but it is very difficult to develop and maintain." Consequently, while contracts and legal activities can help with the unpredictability of collaboration, other less tangible dimensions, such as trust, can assist and offer further additional benefits to partners.

Jennings et al. (2000, 26) define trust as "mutual confidence that no party to an exchange will behave opportunistically and exploit another's vulnerabilities." They emphasise how trust reduces costly governance mechanisms, lowers coordination costs, improves productivity and efficiency, and enhances competitive advantage. Moreover, they highlight the reality that trust develops between people rather than organisations per se.

Trust among collaborating organisations, Child (2001) suggests, demonstrates the quality of relationships of those people representing the participating organisations. It aids in overcoming cultural differences and conflict; encourages better collaborative participation in coping with unforeseen circumstances; makes more rapid adjustments to circumstances possible; and provides an alternative to reliance on traditional control mechanisms, including legal ones. Furthermore, trust between collaborating organisations or corporate units encourages the openness in exchanging ideas and information which is a necessary condition for innovation and other forms of new knowledge creation.

Cullen et al. (2000) emphasise two types of trust based in the notion of trust as beliefs about how alliance partners will behave in the collaboration: 'credibility trust' with a rational grounding in relating to the confidence in partner capacity to meet alliance obligations; and 'benevolent trust' with an emotional grounding relating to belief in partnering behavior based in goodwill towards partners and the alliance. The complementary commitment dimension is about intentions to make the alliance work and continue as appropriate. It also has a rational- instrumental and emotional-attitudinal aspect. The former calculative commitment focuses on tangible rewards from the alliance and the latter attitudinal commitment focuses on internalising the alliance relationship and making the extra effort to ensure success, often beyond contractual obligations.

Trust, however, must be tempered by pragmatic reality in alliance processes. For example, it is clear that "Particularly important is agreement on clear and realistic objectives for the initial phase of co-operation. These assure concrete steps for implementation and early success, advancing development of the alliance" (Hoffmann & Schlosser, 2001, 363).

Perhaps two of the greatest challenges are the commitment in terms of time and the spread of trust and commitment. As one interviewee (2001) put it: "You need to drive commitment through the whole business, not just with those intimately involved."

3.2.2 People issues

Without effective people management, especially during change processes, alliances are likely to fail. As Hutt et al. (2000, 51) put it: "... many alliances fail to meet expectations because little attention is given to nurturing the close working relationships and interpersonal connections that unite the partnering organisations." They maintain that the alliance research tradition has not incorporated or, even worse, dismissed people issues from consideration.

Kale et al. (2000) develop the concept of relational capital incorporating key issues of trust and respect among alliance partners. Such capital can assist with the dilemma and risk involved in intellectual property concerns. For them (2000, 218): "On the one hand, relational capital facilitates learning through close one-to-one interaction between alliance partners. On the other hand, it minimizes the likelihood that an alliance partner will engage in opportunistic behaviour to unilaterally absorb or steal information or know-how that is core or proprietary to its partners." This relates closely to the issue of trust, mentioned earlier. While formal contracts may be signed in collaboration, the more powerful informal contracts based on personal and organisation trust are vital.

Effective communication, both within and across participating organisations, is at the heart of successful alliances. As Davies (2001, 187) suggests: "The merging of interests, the sharing of privileged information, and intimate collaboration and cooperation are all dependent on the ability of the partners to communicate." In addition, Hutt et al. (2000) argue that effective communication and information exchange strengthen collaboration through boundary spanning activities connecting the three partnering levels - top management, middle management and operational personnel; through building trust among partners; and through developing shared understanding of goals, roles and relationships.

Collaboration participants, as individuals, groups, or organisations, can be differentiated in terms of the power and knowledge they have in influencing and enacting a partnership agenda (Huxham & Vangen, 2000). Certainly, the issue of alliance leadership is also an important one according to Judge and Ryman (2001). For them it is crucial to understand the dynamic processes involved in interorganisational relationships, including moving beyond the structural dimensions emphasised in earlier literature and incorporating leadership issues (2001, 73):

One way to think about leadership issues in strategic alliances involves aligning disparate leadership skills and interests into a successful partnership. Successful strategic alliances involve two or more leaders who have relatively expansive power and authority over their host organisation, but relatively constrained power and authority over a strategic alliance. Thus it is not surprising that alliance research reveals that compatibility of the CEOs of the partner firms is essential to success.

3.2.3 Process/strategy

Although they are important, good personal relations and trust between partners are really only a prerequisite for co-operation. Building on good personal relations, alliances need to be professionally planned and organized for the full potential of the co-operation to be realised. Professional alliance management is particularly characterised by systematic analysis and configuration, quick and consistent implementation of joint plans, and a continuous review of alliance performance that allows for timely adjustments in alliance strategy and configuration (Hoffman & Schlosser, 2001, 373).

Important also are the instruments through which the alliance communication occurs, with optimum processes encouraging the sharing of information and knowledge (Huxham & Vangen, 2000). Of course the whole issue of information and knowledge sharing, of intellectual property, is a vexed one in the sense that there is often a fine line between functional and dysfunctional processes. Dysfunctional, opportunistic behaviour can occur where partners act unethically, using privileged information opportunistically for their own expedient self-interest instead of for the alliance's interest. As Davies (2001, 51) explains, four key operating conditions act as motivators for such behaviour: "1. the operational ambiguity of Sas, 2. the need for control, 3. the need to compensate for the underperformance of the other partner, and 4. the perceived inequity of benefits."

Reuer and Zollo (2000) also demonstrate the importance of alliance adaptability, how collaborative partners need to adapt their relationship over the time of that relationship. This includes the issue of alliance profiling for individual organisations and the whole, given that alliances can assist in recognition and communication of social status (Stuart, 2000b).

3.2.4 Structure

Issues of organisation power and politics also reside in alliances. As Huxham and Vangen (2000, 1168) suggest, collaboration agendas are led by the following: "Structures influence process designs and what participants can do. Processes influence the structures that emerge and who can influence agendas. Participants influence the design of both structure and process."

Given that structure enables and constrains, affects agenda setting, power dimensions, resource allocations, and outcomes, it is crucial to achieve an appropriate alliance structure for success. This must take into account structures of the participating organisations plus connections among partners and the overall alliance structure. In many collaborations a lead organisation is selected with leadership legitimacy; and/or a body such as a steering or management committee, comprising representatives of collaboration organisations, who are empowered to make joint decisions on the direction of the collaboration (Huxham & Vangen, 2000).

The best way to design physical and virtual alliance processes may be through infomediaries acting as aggregators and facilitators in the e-commerce environment. As (Ordanini & Pol, 2001, 278) put it:

As aggregators, they bring a group of dispersed trading partners together into a virtual marketplace. In this sense, they provide electronic storefronts that permit firms to promote their online activities, obtain high visibility, and build virtual communities where companies can have access to news, analysis, buyers, and sellers' guides and interactive resources. As facilitators, infomediaries provide software, tools and services enabling traders to run business electronically. In this case, they provide exchange platforms ... that can digitally carry out the transactions. In addition, they also provide logistics and financial services to manage the transaction processes.

One needs also to note that there are distinctions between consortiums and alliance networks. In a consortium many organisations work collaboratively within the same alliance with participants working together on a unified project. In networks, one organisation dominates at the centre of multiple bilateral alliances (Stuart, 2000a), allowing for three types of network resource flows - asset, information and status flows (Gnyawali & Madhavan, 2001). This, however, may be too simplistic in that it does not take into account multi-level networks and their dynamic nature, as will be shown in Section 6.2.

3.2.5 IT issues

Interfacing IT systems between partners participating in e-commerce projects is recognised as a major area of potential problems. In addition, the effort required to integrate systems across organisations is very often greatly underestimated (El Sawy, 2001).

Technical aspects are not the major focus of this study but interviewees and survey respondents did indicate that their experiences in systems and database integration were broadly consistent with the wider industry experience.

3.2.6 Learning in collaboration

A learning alliance develops into a 'community of innovation' ... as its members undergo a process of socialization in that community. The socialization process facilitates knowledge sharing and learning, especially for tacit or implicit knowledge (Carayannis et al., 2000, 481).

Trust and commitment in alliances enables alliance learning among partners (Cullen et al., 2000). The more open information sharing that occurs, the more organisation learning and knowledge creation is likely. The learning effects of strategic alliances are growing in significance, not only to practitioners but also in academic interest. Moreover, learning alliances, focussed on gaining new knowledge, are growing in numbers.

Wenger (1998, 7-8) sees learning as follows:

• For individuals, it means that learning is an issue of engaging in and contributing to the practices of their communities.
• For communities, it means that learning is an issue of refining their practice and ensuring new generations of members.
• For organisations, it means that learning is an issue of sustaining the interconnected communities of practice through which an organisation knows what it knows and thus becomes effective and valuable as an organisation.

In alliances, participating organisations need to have the appropriate learning capacity, comprising learning intentions and the current absorptive capacity. Success in alliance learning depends on both the participating organisations' learning capacity and the transparency of partners' complementary knowledge (Hoffmann & Schlosser, 2001). The actual level of interactive learning is determined by how formal the relationship is, the frequency of contact and sharing of knowledge (Meeus et al., 2001) among participating organisations.

This is vital for collaborating organisations in the digital b2b marketplace where virtuality allows learning from participants' experiences. This is regarded as especially important for SMEs, often not included in such opportunities of knowledge absorption (Ordanini & Pol, 2001).

3.2.7 Knowledge management

... creating new knowledge - and, perhaps more important, effectively using the knowledge that already exists in an organisation - has become a core element of business strategy (Von Krogh, et.al., 2000, 70).

An outgrowth of learning is the important issue of knowledge creation and management. Technologies have changed both the nature of and access to information and so now intellectual capital is considered a crucial organisational asset.

There is some debate about the actual capacity to manage organisation and alliance knowledge. For example, Von Krogh et al. (2000) argue that knowledge management is impossible and management should focus instead on knowledge enabling and creation, particularly through knowledge vision, a focus on managing conversations, mobilising knowledge activists, fostering creativity and organisational relationships, devising the appropriate organisational context and structures, and globalising local knowledge. They emphasise the social as well as the individual dimensions of knowledge creation, the need to build community and knowledge sharing, and the mistake of relying alone on investments in information technology for knowledge creation. This echoes the sentiments of Stacey (2001, 6) whose view is that "Knowledge creation is then understood as an active process of communication between humans."

This relates to the notion that knowledge is shared in a positive-sum game rather than transferred. However, knowledge creation and sharing can result in a zero-sum game if knowledge is misappropriated from one participating organisation by another for its own benefits (Carayannis et al., 2000). In the ITOL situation, especially in the regional areas, the overall tendency was towards a positive-sum game rather than zero-sum.

3.2.8 External threats to successful e-commerce collaboration

Some of the key threats to successful e-commerce collaboration may include issues such as state or federal government interventions, regulatory and legal requirements, international issues especially where multinationals are concerned, technological developments, and the whole question of funding and financial opportunities and constraints.

3.3 The notion of communities

The notions of interorganisational learning and knowledge sharing are pertinent to the concept of communities of practice, ones that Wenger (1998, 125-126) envisages as shared histories of learning. He (1998, 5) defines 'practice' as "a way of talking about the shared historical and social resources, frameworks, and perspectives that can sustain mutual engagement in action"; and 'community' as "a way of talking about the social configurations in which our enterprises are defined as worth pursuing and our participation is recognizable as competence."

For him, indicators establishing the formation of a community of practice include the following:

1. sustained mutual relationships - harmonious or conflictual
2. shared ways of engaging in doing things together
3. the rapid flow of information and propagation of innovation
4. absence of introductory preambles
5. very quick set-up of a problem to be discussed
6. substantial overlap in participants' descriptions of who belongs
7. knowing what others know, what they can do, and how they can contribute to an enterprise
8. mutually defining identities
9. the ability to assess the appropriateness of actions and products
10. specific tools, representations, and other artefacts
11. local lore, shared stories, inside jokes, knowing laughter
12. jargon and shortcuts to communication as well as the ease of producing new ones
13. certain styles recognized as displaying membership
14. a shared discourse reflecting a certain perspective on the world.

There were no ITOL projects wherein all of these indicators were evident. However, there was no doubt in the researchers' mind that true communities did exist among the different projects, as discussed in Section 6.1.

If a community is present, then one also needs to determine the level of competency of membership. In order to do so, the key dimensions that need to be in place are: mutuality of engagement, accountability to the joint enterprise of the community; and appropriate participation to make use of the shared repertoire of the community of practice. If such competencies exist, then communities can be a vital location for knowledge acquisition and the exploration of new ideas.

Von Krogh et.al. (2000), however, differentiates between Wenger's (1998) community of practice and his own emphasis on an enabling context for learning and knowledge sharing. The former is where members learn knowledge; where task, culture and community history set the boundary of the community; and where membership is rather stable, meaning new participants take time in becoming full participants. The latter aids knowledge creation; participants change the boundary; and there is a more unstable membership and a more 'here-and-now' quality able to ignite innovations.

3.4 Critical success/failure factors

In summary - knowledge is the basis of alliance strength. You need to determine what you want from an alliance; which will be the most appropriate partner; what you can gain from your partner in both the short and long term; and how you should organize your relationship. Diving into an alliance assuming you will figure it out as you go along is the fastest way to drown (Mitchell, 2000, 352).

Some researchers demonstrate that the majority of alliances can succeed in attaining the explicit objectives that motivated their initial creation (Dussauge & Garrette, 1999). Nevertheless, alliances are difficult collaborations to manage effectively. The failure rate in strategic alliances continues to remain high, some suggesting two-thirds fail (The Economist, 1999), and others highlighting failure up to 70%, demonstrating the real challenges in managing such collaboration, especially during the first two years (Das & Teng, 2000; Koza & Lewin, 2000a/b?).

Consequently, given such high failure rates and the accelerating growth of alliances, it is important to assess the performances of such organisational collaboration. One also needs to ask how many such relationships actually have formal performance evaluation processes in place from inception and throughout the history of the relationship. It seems that not many collaborations do have performance measures in place and, apparently, those that do have problems with the reliability of indicators.  This relates to both the difficulties in reaching consensus on what makes for a successful alliance, the measures suitable for assessing alliance performance, and the difficulties involved in measuring intangibles such as trust and commitment (Cravens et al., 2000). Yet it is suggested that continuing monitoring and evaluation of alliances is a hallmark of success (Segil, 1998).

The nature of collaborative success is vexed by diverse approaches, including longevity, enhancing competitive advantage, market share price, meeting objectives, gaining entry into or creating new markets, knowledge management, and the like. In one recent study (Hoffman & Schlosser, 2001) the authors used the approach of bunching data into content-oriented variables exploring the 'what' of the relationships in terms of strategy, structure, and systems; and process-oriented variables exploring the 'how' of the collaboration in terms of relationship trust and mutual understanding. Their results showed that alliance success incorporated both content and process oriented variables. Crucial also were the findings that "critical success factors for SMEs are concentrated in the early stages of alliance evolution, making it evident that systematic preparation and careful planning are very important for alliance success ... [although] ... the full value of an alliance can only be developed during its evolution" (Hoffman & Schlosser, 2001, 376).

Hoffman and Schlosser (2001) identified the following critical success factors, in descending order of importance: precise definition of rights and duties; contributing specific strengths and looking for complementary resources; establishing required resources; awareness of time requirements; equal contributions from all partners; deriving alliance objectives from business strategy; building trust by unilateral commitments and avoiding opportunistic behaviour; speedy implementation and fast results. Those perceived as key to participant companies were: emphasising the potential for joint value creation; agreement on clear and realistic objective; top management support; and contributing specific strengths. In exploring the differences between real and perceived success, Hoffman and Schlosser (2001) found that the most important established success factor - precise definition of rights and duties, alongside another significant one - contributing specific strengths and looking for complementary resources, were both underestimated by unsuccessful SME collaborations.

For others, the soft side of alliance management is the crucial success dimension. For example, social ingredients and people skills, alongside strategic ones, are vital in defining collaborative success (Hutt et al., 2000; Whipple & Frankel, 2000). Moreover, appropriate understanding and communication practices among participating organisations in order to expedite joint problem-solving, can aid alliance rescue before it is too late, resolving the gap that may exist between initial expectations and intermediate results (Arino & Doz, 2000, 181). In addition, Huxham and Vangen (2000, 1171) emphasise in their research that: "It is paradoxical that the single-mindedness of leaders appears to be central to collaborative success."

Koza and Lewin (2000b, 146) suggest it is crucial to be clear on the strategic intent of the alliance. They emphasise its strategic dimension: "The odds of success increase when the symmetry in the strategic exploitation/exploration intent of the partners is present at the start and is re-calibrated and maintained over time." Complementing this view, Douma et al. (2000) maintain that alliance success can be understood in terms of fit among partners involved. They see such dynamic fit encompassing five dimensions: strategic, organisational, cultural, operational, and human fit.

Further collaboration themes that emerge from practice as either causing problems or offering benefits include: "common aims, communication, commitment and determination, compromise, appropriate working processes, accountability, democracy and equality, resources, and trust and power" (Huxham & Vangen, 2000, 1162).

From research conducted in the United States, Whipple and Frankel (2000) determined the following top five factors influencing alliance success: trust, senior management support, ability to meet performance expectations, clear goals, and partner compatibility. Their research demonstrated that (2000, 27) "success results in a relatively even, but not an equal, exchange of benefits and resources between partners ... exemplified by the different goals ... and the degree of improvement and achievement realized by both firms."

In another recent study (Kale, Dyer, & Singh, 2001), the researchers found that the assertion (which is current wisdom in the field) that alliance experience is crucial for alliance competence and success was an inadequate explanation in the face of the need for a multi-pronged approach. Their research results showed success across the four Cs dimensions of alliance competence - capture, codify, communicate/create, and coach. This means creating a special structure for coordinating alliance activity; implementing specific systems for capturing, codifying, communicating and creating alliance management lessons and experience; and coaching senior personnel in alliance competence. The emphasis is on appropriate alliance structures and strong alliance management systems.

Finally, Judge and Ryman (2001, 74-5) suggest that in terms of collaboration and opportunistic behaviour:

... a holistic approach channels the energy of the partners involved into collaboratively serving the customer rather than competing with each other. Seeking to gain at the expense of a partner or refusal to make short-term sacrifices for the long-term good is an inadequate foundation on which to forge an alliance, especially in an on-going partnership. Alliances built on such a foundation rarely survive the initial development phase. Indeed, many alliances fail shortly after being launched when it becomes apparent that one or more partners are exclusively interested in their own gain, or protecting their own turf, rather than in mutual benefit.

Thus, in summary, the critical success factors for alliances are:

• Linking alliances with business strategy
• Appropriate alliance preparation
• Precise outline of performance expectations, goals, responsibilities and rights
• Contribution of specific resources and strengths
• Understanding time dimensions in the relationships
• Trust
• Top management support
• Social and people skills (including communication)
• Partner compatibility
• Appropriate alliance structures and management systems
• Alliance leadership

The success of alliances formed in ITOL projects will be analysed in Section 6, using these critical factors.