Strategic Alliances – Review and Case Study

The goal of Milne et. al. article is to study how non-profit alliances lead to shape environment policy and market behavior. Focusing on this goal, they developed five hypotheses and conducted extended research to prove or disprove them, thus determining the true behavior of alliances that exist between non-profit and non-profit, non-profit and governmental organization and non-profit and for-profit business. The article states that the alliances are successful if there is smooth coordination at both inter-organizational and interpersonal levels, high level of mutual trust, similar organizational culture, commitment and goal congruence (Milne et. al, 1996). Based on the finding that “cross-sector alliances tend to be more formal in nature”, organizations can look forward for less uncertainty in the relationship by writing down mutually agreeable contracts that defines clear targets of achievement.

The most important finding that the article brings into light is that “cross-sector alliances are more effective“. Take the case of a for-profit software firm X that enters into alliance with a non-profit open source firm doing research on Unicode standardization and Native language processing. They may enter into a formal contractual project say development of a public website that is in Hindi (the native language of India). X can take this opportunity to improve their public image by marketing the website as a major initiative towards bringing technology to the common people. In this process, they acquire the scarce technical knowledge from Y. X provides their business property and necessary funding for Y to setup its R&D center in X’s location. Y provides all required technical resources and training required to deliver the product. Y benefits from the “abundant financial funding” and its ability to motivate its volunteers to do a remarkable social oriented service

Since the study finds that “lobbying and joint fund raising efforts within-sector organizations improve their political positioning”, differing organization types may refrain from forming alliance on such activities. While studying the effect of the partner firm’s ability to influence each other’s goals, the article points out that in an alliance consisting of a non-profit and Government organization, the former acts as a “change agent”, influencing the way that a particular legislative initiative is implemented.

Alliance formation between US Olympic Team (non-profit headed by The US Olympic Committee, USOC), Coca-Cola Corporation (for-profit) and the American Red Cross (non-profit) can be analyzed to see how organizational alliances can be made successful in their respective marketing efforts. I think the way the alliance formed will be between Coca-Cola Corp. and USOC and between USOC and American Red Cross. The alliances can be analyzed and tabulated as follows –

Organization – Alliance Partner Motivation for Success
US Olympic Team – Coca Cola Corp. Propagating the US team spirit via extensive global advertising programs arranged by Coca-Cola. Various Ads and commercials can be produced including the athletes and nation’s major strengths. Sufficient funds raised via the alliance.
US Olympic Team –American Red Cross Trusted support in case of life saving and other emergency situations.
Coca Cola Corp. – US Olympic Team Being able to sponsor the most prestigious international team for the most watched global event.
With the official Olympic sponsor tag, they can market their products effectively.
American Red Cross –US Olympic Team Opportunity to utilize its volunteer expertise to cater to the event’s life saving needs and the goodwill generated from the humanitarian efforts.
Organization – Alliance Partner Determining success or failure of marketing efforts:
US Olympic Team – Coca-Cola Corp. Marketing efforts can be measured directly by the contractual agreement between the USOC and Coca-Cola Corp.Mutual trust, commitment towards delivering the values of the ads, commercials and smooth coordination of activities should determine the success or failure of the respective marketing strategies.
US Olympic Team –American Red Cross Mutual trust, commitment and goal congruence in supporting the nation’s cause.
Organization – Alliance Partner Effect of organizational culture on the interest in forming alliances
US Olympic Team – Coca-Cola Corp USOC being a non-profit and Coca-Cola being a for-profit, they have two different organizational cultures which is difficult to coordinate. According to the article, they would need to enter into a formal contract which clearly defines the mutual interests, goal and coordination mechanisms. Through well coordinated alliance, they can each look upon the success of their individual marketing strategies.
US Olympic Team –American Red Cross USOCand American Red Cross, both being non-profit, has greater similarity in organizational culture, structure, congressional influence and goal congruence. So the alliance can be more informal and the coordination mechanisms are less tightly controlled. Both of them will have greater interest in entering into alliance and marching towards success.

References:

1. Milne, George R; Iyer, Easwar S Gooding Williams, Sara (1996). Environmental organization alliance relationships within and across nonprofit, business, and government sectors. Journal of Public Policy & Marketing.

2. US Olympic team website. Retrieved March 18, 2007, from, http://www.usolympicteam.com/11937.htm

3. American Red Cross website. Retrieved March 19, 2007, from,http://www.redcross.org/index.html

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