SUCCESFULLY MANAGING STRATEGIC ALLIANCES BETWEEN LARGE CORPORATIONS AND START-UP FIRMS

This research aims to better understand how strategic alliances between startups and corporates can be managed to generate successful outcomes, considering the large differences between both organization types. Here we analyze the role of corporate management within the dynamic alliance process (Das & Teng, 2002) that includes the alliance environment, alliance condition variables, alliance formation, alliance operation and alliance outcomes. Following the literature review, it was concluded that alliances between start-ups and corporates with the aim of Cospecialization have the highest chance of success, because within this alliance type, the organizational differences between the firms are presumed to be less conditional in comparision with other alliance strategies. Within Cospecialization alliances, it is rather the similarity of the resources the alliance partners bring to the table that will determine the outcome of the alliance (Dyer and Singh, 1998; Yang et al., 2014). Through a multi-case study of alliances between a large corporation and start-up firms, one dominant variable was identified to successfully manage alliances between start-ups and corporates. This research identified top management involvement as determinant predicting alliance success. Through the involvement of top management, success limiting factors can be overcome, such as ambiguity related difficulties and the vast differences between both organization types. The empirical findings indicate that alliance success depends largely on a correct management of ambiguity to ensure strategic alignment. In this research, the differences between both organization types became clear in the form of a misalignment of priorities, expectations and speed of operations. In the investigated cases, a direct link was identified between alliance success and the involvement of top management. On the other hand, it was found that when there is no involvement of top management, alliance success was not obtained. The investigated cases show sufficient variance in data to substantiate these proclamations. This research provides relevancy within existing alliance literature by showing how top management involvement determines successful outcomes of alliances between large corporations and start-up firms. To the live management practice, this research adds an identification of a series of ‘mismatches’ between start-ups and corporates that should be managed to generate successful alliance outcomes. These mismatches come in the form of ambiguity through the misalignment of priorities; expectations; and speed of operations. In this research, the difficulties could be overcome through direct involvement of top management. In practice, direct involvement of top management might not always be possible to achieve.