Formation of Strategic Alliances in Business Services: Towards a New Client-Oriented Conceptual Framework

P. N. O' Farrell and P. A. Wood

The Service Industries Journal, 1999, vol. 19, issue 1, 133-151

Abstract: Interjlrm collaboration has become an increasingly common organisational form in the pursuit of competitive advantage. Since most previous research has concentrated upon the manufacturing sector; we seek to redress this imbalance by considering business services. We review several theoretical frameworks, and argue that the static network theory literature fails to recognise that relations between partners and with the client are as crucial as the hybrid-environment interjiace and, therefore, cannot explain the emergence of hybrid organisational forms. Most fundamentally we argue that the client must be incorporated within the conceptual framework. Two stages of the evolution of the strategic alliance (SA)-client relationship are important: (i) formation and (ii) subsequent development. The key decision for the firms in the SA is how to enter into joint production with the client. The peflormance of a SA cannot be judged purely in terms of the participants since a vital dimension of success is how well the ' S A performs relative to the expectations of clients.

Date: 1999
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DOI: 10.1080/02642069900000008

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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