Managing Instability in Cross-Cultural Alliances

Cross-cultural alliances and the global reach that they can offer would appear to be the strategic answer to companies’ international ambitions. Yet many alliances are doomed to failure because of tensions between the partners. This paper takes a case study approach to explore why instability can emerge in cross-cultural ventures. The examples involve two Japanese joint ventures with local partners in the UK and in Malaysia. The authors find that key factors affecting stability are trust, conflict and dependence. The relative importance of these factors varies according to partner nationality: the main driver for joint venture stability for the Japanese is trust; for the British it is dependence; while in the Chinese Malaysian’s case both trust and dependence are important.