Strategic motives for international alliance formation

This paper considers the strategic motivation for international alliance formation for a sample of UK firms with partners in western Europe, the United States and Japan. The relative importance of a set of strategic motives is identified and related to extant theory. A parsimonious set of strategic motives for the sample studied is provided by means of factor analysis. The paper identifies the main strategic motives for alliance formation by UK firms as intrinsically linked to the market and geographical expansion of the firm and that the main strategic motives are underpinned by the theories of strategic positioning and organizational learning. This study also finds that some of the often suggested motives for alliance formation found in the literature, in particular aspects of risk reduction associated with new projects, appear not to be particularly important motivating factors. Hypotheses are tested on the relationship between the relative importance of individual strategic motives and a number of characteristics of the sample - contractual form of the alliance, relative partner size, primary geographical location of the venture, industry of the alliance and partner nationality. Implications of the findings for future theorizing on alliances and their motives is identified.