Paper to presented
at the 25th Annual Conference of the European International Business Academy
Manchester, December 12-14
The literature on strategic alliances in general and international alliances in particular has been dominated by rationalistic perspectives that have given little room for interpretive processes. We argue in this paper that specifically in the context of complex and ambiguous organizational structures such as international alliances, it is important to recognize the key role of the sensemaking processes through which actors socially construct these organizational hybrids. We outline here the rudiments of a theoretical approach where one can distinguish cognitive, affective, political and institutional dimensions of the sensemaking processes. This perspective helps to understand specific aspects of alliance formation, evolution and management that have received little attention in prior research such as the role of internal discussions, stories and myths, and management of meaning.
1. Introduction
Inter-organizational alliances in general and international alliances in particular have become increasingly popular. The growth of alliances has been phenomenal in the 1990s; studies suggest annual growth rates above 100 per cent (see e.g. Pekar and Allio, 1994; Luo, 1996). The experiences of alliances are, however, mixed. Strategic alliances have been found to be unstable, and they have a poor record of success (see e.g. Gant, 1995; Brouthers et al., 1995; Lindqvist, 1996). The increasing popularity of strategic alliances has also been reflected in a rising academic interest in these arrangements (Borys and Jemison, 1989; Ring and van de Ven, 1994; Doz and Hamel, 1998; Spekman et al, 1998). However, in the international business context in particular, these new organizational forms have hardly been given adequate attention (see e.g. Contractor and Lorange, 1988; Osborn and Hagedoorn, 1997; Glaister and Buckley, 1999).
Strategic alliances thus require attention and critical scrutiny in international business studies. However, strategic alliances are difficult objects of study because they are often ambiguous arrangements where the actors may have very different views on the purpose, scope and nature of cooperation, they create very complex organizational forms that are difficult to conceptualize, the relationships between partners evolve over time in ways that are hard to theoretically or empirically describe, and the content of alliance management is usually very context-specific. Echoing the arguments of various scholars in this field (see e.g. Ring and van de Ven, 1994, Gulati, 1998; Spekman et al, 1998), we claim that there is a need to elaborate new theoretical perspectives in order to go further in analyzing the complex organizational processes through which international alliances are being formed and developed.
We argue that the existing literature on strategic alliances in general and international alliances in particular has suffered from overly rationalistic perspectives that have given little room for interpretive processes (for reviews, see e.g. Borys and Jemison, 1989; Ring and van de Ven, 1994; Doz and Hamel, 1998; Spekman et al, 1998). We claim in this paper that specifically in the context of complex and ambiguous organizational structures such as international alliances, it is important to go beyond predefined classifications and process models. We argue that there is a need to recognize the key role of the interpretive processes through which actors socially construct these organizational hybrids. We suggest that the sensemaking perspective, as developed by Weick (1995) for the study of complex organizations, is a particularly fruitful perspective for this purpose. This is because the sensemaking perspective concentrates on the interpretive processes through which the actors enact these organizational structures.
In this paper, we outline the rudiments of a theoretical approach where one can distinguish cognitive, affective, political and institutional dimensions of the sensemaking processes. This helps to understand specific aspects of alliance formation, evolution and management that have received little attention in prior research such as the role of internal discussions, stories and myths, and management of meaning.
This paper is structured as follows. The following section provides an overview of existing research on international alliances. In the next section, we outline the sensemaking perspective as an integrative theoretical framework within which one can examine cognitive, affective, political and institutional processes in international alliances. In the concluding section, we propose specific research avenues for future studies on international alliances.
2. A review of existing research on international alliances
Strategic alliances have been studied from various perspectives (see e.g. Borys and Jemison, 1989; Osborn and Hagedoorn, 1997; Spekman et al, 1998). Osborn and Hagedoorn (1997), for example, distinguish economics-based, corporate strategy and inter-organizational views on alliances. The themes that the existing research has concentrated on include motives for alliances, alliance formation, alliance development and evolution, learning in alliances, tensions in alliance relationships and alliance performance. Although it is difficult to distinguish specific literature on international alliances, the studies emphasizing the international setting have often concentrated on the added problems related to institutional or cultural differences and geographical distance (see e.g. Glaister and Buckley, 1999).
The reasons and motives for alliances have been tackled in many studies (see e.g. Osborn and Hagedoorn, 1997; Spekman et al., 1998). Influenced by Williamson’s (1991) ideas of transaction cost economics, many researchers have seen alliances primarily as means to reduce costs, although scholars have increasingly recognized that alliances perform also other functions (see e.g. Kogut, 1988). Several researchers have paid attention to a need to develop competencies as a fundamental motive for alliance formation (see e.g. Hamel, 1991; Teece, 1992). From a more strategic perspective, researchers have distinguished offensive and defensive motives (see e.g. Lorange and Roos, 1993). They have also presented market and geographical expansion as motives (Glaister and Buckley, 1996). The need to collaborate with competitors has also been an important question on this area (Hamel, Doz and Prahalad, 1989). Among other arguments, the view of alliances as a device to reduce uncertainty related to both demand and competition is noteworthy (Burgers et al., 1993).
Alliance structures vary from very loose, non-equity cooperative agreements to joint ventures involving equity and formal hierarchical structures. These varying structural and organizational forms have also been reflected in the studies in this field adopting different kinds of perspectives on alliances. For example, Borys and Jemison (1989) have viewed alliances as hybrid organizational arrangements and presented three ways to coordinate administrative systems in alliances: pooled interdependence, sequential interdependence, and reciprocal interdependence. Recently Contractor and Kundu (1998) have studied the organizational forms of international alliances and presented a new syncretic theory where they argue that a robust theory on alliance organizational mode needs to include country, transaction, and firm strategy specific factors, thus combining concepts from the transaction costs theory, agency theory, corporate knowledge and organizational capability theories.
Researchers have also examined the organizational complexities of alliances at organizational (Killing, 1988; Sheth and Parvatiyar, 1992) and international levels (Osborn and Baughn, 1990). They have also looked into the relationship between specific elements in alliance structures and the performance of alliances (see e.g. Parkhe, 1993a, 1993b). Of the various methods of organizing, ‘tiering’ has been seen as an effective solution for large-scale alliances (Segil, 1988). As a counter-weight to the more rationalistically oriented research in this area, other researchers have started to look more closely into topics such as image, trust and reputation. For example, Gulati (1995) has studied mechanisms facilitating uncertainty reduction to promote trust in alliances.
The developmental and evolutionary processes in alliances have been important topics in alliance literature. These studies have often focused on the factors that influence the development of dyadic alliances (see e.g. Ring and van de Ven, 1994; Doz, 1996). For example, Ring and van de Ven (1994) have outlined formal, legal, and informal social-psychological processes by which organizational parties negotiate, commit to and execute their relationships over time. Studies on these development processes have frequently been linked to performance questions. For example, studying partner selection, Brouthers et al. (1995) have presented a framework to help firms assess the suitability of partners and the likelihood of success of an international alliance. A stream of research has focused on the network perspective of alliance development (see e.g. Madhavan et al., 1998) while other scholars (see e.g. Lorenzoni and Baden-Fuller, 1995) have addressed particularly the contacts between individuals as factors determining the development and eventual success of alliances. Singh and Mitchell (1996), in turn, have argued that evolving interfirm relationships both help a firm survive and inhibit its ability to adapt to changes in the environment.
Learning has been a popular topic in alliance research. For example, Hamel (1991) has studied the skills of firms in inter-partner learning and suggested two different mechanisms for extracting value from alliances: bargaining over the benefits gained directly from the execution of joint tasks or internalizing skills of partners. Parkhe (1991) has combined the capability of a firm to learn with the longevity of an alliance. Doz (1996) has found that successful alliance projects went through a sequence of interactive cycles of learning, reevaluation and readjustment. Mowery et al. (1996) have argued that equity arrangements foster greater knowledge transfer and that the so-called absorptive capacity helps to account for the extent of technological capability transfer. Inkpen (1996, 1998) has concluded that the failure to execute specific organizational processes in order to access, assimilate and disseminate knowledge from alliances is a key reason why firms often do not learn successfully from alliances. Powell (1998) has studied knowledge-intensive industrial sectors and focused on the capability of firms to learn from alliances and to access and distribute knowledge gained through the alliance. Larsson et al. (1998) have suggested a typology of five inter-organizational learning strategies for a firm's enhanced collective learning: collaboration, competition, compromise, accommodation, and avoidance. Recently Khanna et al. (1998) have provided interesting perspectives on the dynamics of learning alliances, weighing the roles of cooperation and competition in affecting the dynamics of such alliances.
Researchers have also studied tensions in alliance relationships, although political perspectives have been scarce in this area. Several studies have focused on the dual nature of alliance relationships: cooperation needed to create value and competition concerning the inputs and outputs (Hamel et. al, 1991; Lei and Slocum, 1991, Lorange et al., 1992; Teece, 1992).
Alliance performance research has faced several fundamental difficulties. These relate to fundamental questions such as what the time period is and from whose perspective the success or failure is being examined. However, alliance performance has been a popular topic in empirical research (see e.g. Glaister and Buckley, 1999). While the earlier alliance performance research focused mainly on joint venture survival (see e.g. Harrigan, 1986; Kogut, 1988) the more recent research has taken up broader perspectives (see e.g. Koh and Venkatraman, 1991; Hagedoorn and Schakenraad, 1994; Dussauge and Garrette, 1995; Chan et al., 1997; Das et al., 1998; Doz and Hamel, 1998; Glaister and Buckley, 1998). Of the results of these studies, for example, Saxton (1997) has found support for the hypothesis that there is a positive relationship between partner firms' benefits from alliance participation and partner reputation, shared decision-making, and strategic similarity between partners. Segil (1998), in turn, has concluded that among other things common culture and open communication are crucial to alliance success. Gulati et al. (1994) have concluded that the success of an alliance depends greatly on how the partners see their roles in the alliance and used the prisoner's dilemma analogy to illustrate the phenomenon.
Finally, researchers have increasingly argued for a need to develop new theoretical perspectives that provide opportunities to conceptualize and empirically examine the complex social processes involving insecurity and ambiguity among the social actors. For instance, Ring and van de Ven (1994) have argued for a broader understanding of the internal social processes in inter-organizational relationships. Gulati (1998) has noted that research so far has not really addressed the role of multiplicity of social and economic contexts in which firms are embedded and calls for broader network perspectives on issues associated with strategic alliances. Spekman et al. (1998) have argued for long-term ‘life-cycle’ views and elaboration of the roles of the managers in changing circumstances. Osborn and Hagedoorn (1997) have encouraged researchers to abandon a singular description of alliances and networks based on the assumptions of a host discipline in favor of a more robust, sophisticated, multidimensional visions.
In our view, these calls for new perspectives indicate a need to develop approaches that are less predetermined or reductionist than the previous ones and that are able to shed additional light to the complex social processes around these arrangements. One avenue to this direction is to move from the ‘ostensive’ views on alliances to ‘performative’ perspectives on these organizational arrangements (Czarniawska, 1993). In other words, to see alliances as social constructions created in organizational sensemaking processes rather than viewing them as structural entities defined by the official contracts made.
3. A sensemaking perspective on international alliances
'Sensemaking' has become an 'epithet' that has been given different definitions in studies on organizational actors' interpretation processes (see e.g. Dutton and Jackson, 1987; Porac, Thomas and Baden-Fuller, 1989; Dutton and Dukerich, 1991; Gioia and Chittipeddi, 1991; Czarniawska-Joerges, 1992; Weick, 1995; Gioia and Thomas, 1996; Vaara, 1999). 'Sensemaking' is here understood as interpretation processes through which actors socially seek understanding of and meaning in specific issues and enact their organizational environments.
The sensemaking perspective provides a convenient conceptualization for organizational analysis as it clearly points to two epistemological layers in organizations: organizations as real structures (to be made sense of) and organizations as social constructions (the outcomes of sensemaking processes). The perspective consequently does not undermine the 'real' nature of such organizational structures as alliances. However, it focuses attention on the processes where the organizational actors construct their conceptions of and enact these organizational structures.
From a sensemaking perspective, alliances can thus be seen as organizational hybrids that are continuously being interpreted and reinterpreted by the actors involved. Especially when the alliance is being negotiated and formed, this new element in organizational life is likely to trigger a need to make sense of the situation. Organizational sensemaking processes are needed particularly to reduce insecurity as to the future state of affairs. In the case of international alliances, there is often anticipation of changes that produces insecurity concerning the near and distant future on national, organizational, unit, sub-group and individual levels. In these situations, sensemaking processes serve the purpose of reducing this insecurity by providing cognitive and rhetorical means to try to handle the situation. Especially in the context of large organizations, this reduction of insecurity may first lead to relatively superficial conceptions that may then later become more refined understandings.
Sensemaking is also needed to reduce ambiguity. Construction of shared understandings is necessary to provide a basis for meaningful social action in organizations. This should not, however, be seen as organization-wide long-term consensus but continuous renegotiation of particular arrangements and search for a common basis for action.
It is essential to see that the specific meaning(s) given to organizational structures may be different for different actors in different settings. The divisions among the actors are likely to be multiple and complex. The sensemaking processes not only take place within the boundaries of the focal organizations but often also involve other actors such as customers, suppliers, competitors, unions, investors, government, competition officials or the media.
What is central in sensemaking processes is that they are grounded in identity construction. Organizational interpretation processes are essentially quests for organizational identity where the actors seek meaning in the organizational arrangements and their own identity as members or stakeholders of the organization. This identity construction is usually a very complex process where one can analytically distinguish different kinds of perspectives. For example, national, organizational, professional and unit, role, or gender-based considerations are relevant when examining organizational actors' interpretations.
In international settings, national backgrounds are likely to divide organization actors. This division is also often relevant for the stakeholders of the organization, such as owners or customers. For them, things such as symbols of national identity are often very important. There is plenty of evidence as to how organizational members are bound to the previously separate organizational cultures in alliances, leading to very different views on the purpose of the alliance and the roles of the parties. People also often identify themselves with specific units, be they based on business, location or function. This is likely to result in interpretations where the organizational structure or inter-organizational cooperation is viewed only from the perspective of the particular unit. Closely related, organizational actors often interpret issues based on their own organizational roles. This means that a particular organizational arrangement may seem very different for the actors having and adopting different roles. Professions and gender-based considerations also often have a strong influence on the actors' interpretations.
Alliances are thus being socially constructed by the actors involved. Although these complex, multi-faceted and intertwined, we suggest that it is meaningful to analytically separate cognitive, affective, political and institutional dimensions of these processes to be able to examine specific aspects of these sensemaking processes. The table below summarizes these dimensions.
Table Cognitive, affective, political and institutional dimensions of organizational sensemaking processes in international alliances
Dimension |
Process |
Example |
Cognitive |
Sensemaking processes leading to formulation and representation of cognitions |
Development of nested learning experiences; conceptions of ones’ own and the other side and the synergies and problems of cooperation |
Affective |
Sensemaking processes leading to creation and representation of emotionally-laden meanings |
Development of emotionally-laden bases for attachment/alienation between the alliance partners; conceptions of one’s own and the other side |
Political |
Sensemaking processes leading to promotion and suppression of particular meanings |
Development of politically charged conceptions by ‘management of meaning’; conceptions concerning the rationale of the alliance and the synergies and problems of cooperation |
Institutionalization |
Sensemaking processes leading to institutionalization and legitimization of particular meanings |
Development of institutionalized conceptions concerning the alliance; shared meanings regarding the rationale of the alliance and the associated organizational processes and practices |
3.1 Cognitive processes
From a cognitive perspective, the sensemaking processes can be seen as processes through which collective discussions lead to the formation of specific cognitions. The cognitive processes involved are numerous, but especially interesting are the learning processes where the actors continuously interpret and reinterpret the alliance and the cooperation involved. At best, this leads to increasing knowledge of the other side and of the problems and benefits of cooperation. In contrast to many prior studies in this field (see e.g. Hamel, 1991; Parkhe, 1991; Doz, 1996; Powell, 1998), learning should not here be understood as rationalistic processes where the knowledge of the participants increases in a linear manner. Instead, the sensemaking perspective allows for a broader perspective where learning is understood as forming of specific cognitions from experiences gathered. These cognitions may then later, from a normative perspective, turn out to be more 'true' or 'false', 'useful' or 'less useful' for organizational action.
It should be noted that the experiences are not always direct but the collective sensemaking processes may be strongly influenced by the stories and myths spread around in internal discussions (=sensemaking processes). In fact, an essential part of the collective processes are social interpretations of specific events that have practical or symbolic relevance for the actors involved. Especially in international settings, the geographical distance and lack of direct contact emphasize the role of these stories. For example, it is often likely to be the case that the initial direct experiences are transformed into more or less simplistic success or failure stories.
Learning about the other side(s) constitutes particularly important processes in alliance formation and development. These can involve learning of the organizational characteristics and attributes of the other side(s) at different levels: national, organizational, unit, or practice. Often, however, learning is based on previous conceptions that are being reinterpreted or reconsidered. National stereotypes, for example, frequently serve as first patterns of interpretation before more refined conceptions are formed. It is, in fact, very likely that national stereotypes play a significant role when organizational members and customers make sense of international alliances. For example, the idea of cooperation with a partner coming from the U.S. is easily linked to stereotypes of an individualistic and masculine society. In turn, cooperation with a Swedish partner is often associated with images of a less individualistic and a feminine society.
Important in these learning processes is that the learning concerning the other side usually involves comparisons, where the characteristics of the other side are compared to one's own characteristics. Concrete differences in organizational practices, but also less concrete issues such as values, norms, or beliefs are likely to be specifically important topics in these discussions. On the one hand, this is because differences are easiest to notice and require sensemaking. On the other hand, differences in organizational practices, values, norms, or beliefs often create problems in cooperation and therefore become subjects that need to be made sense of.
These learning processes are in any case closely linked to experiences of cooperation resulting from concrete projects but also from more overall evaluations. Central in these processes are experiences of success or failure (see e.g. March and Sevón, 1988; Cyert and March, 1992). That is, experiences of successful cooperation leading to more effective operations, added value for customers, or other types of synergy are often likely to create specific cognitions as to how in practice the organizational cooperation can create positive results. This often means understandings of how the organizational practices fit together and of the strengths and weaknesses of both or all organizations. In turn, experiences of failure are often likely to lead to conceptions of incompatibility or cultural differences, which, when spread, may become institutionalized conceptions.
However, these cognitive processes are also likely to involve continuous interpretations of relative standing between the different parties (see e.g. Festinger, 1954; Franck, 1988). In fact, essential in cooperative arrangements such as alliances are questions concerning power, dominance, control, relative standing, equality or fairness. As these conceptions are formed in processes that have strong emotional components, they are dealt with in the following section.
3.2. Affective processes
The sensemaking processes can also be seen as affective processes. From the affective perspective, essential in these processes is the formulation and representation of emotionally-laden meanings.
Alliances like other organizational changes trigger emotional processes among the actors. Alliances imply organizational changes that may appear positive or negative from the perspective of the organizational members. Positive changes are likely to lead to interpretations that portray the alliance as favorable. In turn, if the changes are seen as negative, the result may be interpretations that emphasize the problematic features of the alliance. What is important is not only whether the gains in absolute terms are positive or negative but also whether the effects, positive or negative, are distributed in an even, equal, fair or just manner. For example, an alliance that in a specific sense benefits both sides may be interpreted in a negative manner by those that feel that they have suffered injustice, for example, a breach of a psychological contract of evenness.
It is important to understand that the actors are likely to experience the changes in different ways and consequently attach different meanings to the alliance. Members of the top management may view the alliance as a positive step improving the strategic position of the previously independent company or as a chance for career advancement. The employees may in turn interpret the alliance as a threat that is likely to lead to more workload or to reduction of personnel. In these rather usual situations, the alliance becomes an entirely different arrangement for the actors. It is not uncommon that such an alliance becomes "a competitive advantage" for the top management while it is seen as "another burden complicating concrete work" at the shopfloor level.
These emotional processes should not in empirical settings be seen as separate from the cognitive processes. For example, theories of social movement (David, 1977) or procedural justice (Thibaut and Walker, 1975; Kim and Mauborgne, 1991) are usually seen as cognitive perspectives explaining organizational actors' responses to experienced inequality or unfairness. In fact, it is often likely to be the case that emotional experiences become more clearly expressed cognitions as a result of the sensemaking processes. For example, an emotional experience of injustice may be turned into a general conception of lack of synergy or organizational problems in cooperation.
Important in the sensemaking perspective is to understand that these emotionally-laden conceptions are created and formulated in collective discussions. This means that it is not only the initial emotional experience per se but its collective interpretation that is the outcome of the sensemaking processes. In fact, in different circumstances same kinds of experiences could be interpreted in entirely different ways, depending on the particular context and the actors involved. For example, employees may in specific groups interpret the formation of an alliance as positive news when the alliance is seen as a means to secure the competitiveness of the company and consequently future employment. In other groups, the alliance could be seen as a threat to employment due to the anticipation of reorganization measures.
Central in these processes are stories being spread around and reinterpreted by the organization members. These stories often relate to the alliance partners and to the specific experiences of cooperation but may also include elements of other social spheres. Especially in the international context, emotions regarding the other side are usually strongly influenced by reinterpretations of historical events or recent social activities. For example, historical wrongdoings may easily reinforce negative feelings. Reinterpretations of wins and losses in sports events may also fuel emotional interpretations of the alliance relationships.
These emotionally-laden sensemaking processes are important objects of study because they help to understand emotional attachment/alienation between the different actors. It is clear that whether these processes lead to commitment to the alliance plans or to legitimized organizational resistance is a key question to understand why specific alliances lead to value creation and others result in organizational problems.
3.3 Political processes
The sensemaking processes can also be seen as political processes. From the political perspective, essential in these processes is purposeful 'manipulation' and 'use' of meanings for the promotion of specific organizational or personal interests and goals.
International alliances, like other organizational changes, have different implications for different actors. Consequently, they are often characterized by interest conflicts and political games within and across the organizations in question. The most typical conflicts relate to issues where representatives of the previously separate organizations have different views. In fact, it is often the case that specific issues - either from a practical or a symbolic perspective - divide actors based on the previous organizational boundaries. It is important, however, to note that in specific questions and debates the emerging political coalitions do not only follow the initial organizational division. It is often the case that the alliance is interpreted by specific groups of people on both sides in a positive way while others on both sides see little rationale or distinctive problems in the organizational cooperation. For example, stockholders might in general see the alliance as a positive step while specific groups of workers whose jobs could be lost would certainly oppose the arrangement. Frequently, managers and employees have different views as to the justification or nature of reorganization measures needed. At the management level, it is also often the case that practical considerations concerning career, salary or prestige have a strong influence on the interpretations, often implying different interpretations also on the same side. Also stakeholders such as competition officials may have views that radically differ from those of the managers behind the initial plan.
The point to be made is two-fold. On the one hand, the actors' interests and their interpretations are intertwined. This is because the interests are also socially constructed as part of the complex identification processes in organizations. However, in the case that the actors' interests and goals are rather clear in specific situations, one can simply argue that the interests influence greatly their intuitive interpretations. On the other hand, and more interestingly, it is also the case that these actors purposefully influence the collective sensemaking processes by ascribing such meanings to the alliance that serve their own purpose.
From this perspective, what meaning is given is a political act. The most legitimate manifestation of this is probably the management's work to justify the decision to form an alliance, to gain acceptance and to motivate people to work for the alliance. In fact, the leadership role adopted or ascribed to the management involves precisely the management of the organizational change processes at the symbolic level. For example, the way the management presents the alliance and justifies the actions taken has a fundamental impact on the different stakeholders’ responses. It is important to promote the view of the alliance as a means to create value for the stockholders, it is paramount to emphasize the long-term benefits rather than short-term cut-backs for the union representatives, and it is important to play down the arguments concerning reduction of competition for the competition officials.
However, the actors are also likely to promote specific agendas or their own careers by attaching different kinds of meanings to the alliance. For example, it is not uncommon that those behind the alliance plan want to portray the cooperation in positive colors, while those members of the management opposed to the plan do not give the alliance much credit. Similarly, those who see themselves as winners in the organizational change processes are likely to promote the positive aspects of the cooperation while those on the losing side may specifically present arguments concerning problematic aspects of the alliance. Also when retrospectively evaluating the consequences or implications of the alliance, it makes a great difference whether one can assume responsibility for the argued success or failure.
3.4 Institutionalization processes
The sensemaking processes can also be seen as institutionalization processes. From this perspective, institutionalization of the alliance structure and the associated practices requires the development of commonly shared meanings.
Important in these processes is the development of awareness of the alliance and the cooperation planned. There are plenty of examples of alliances that never lead to concrete organizational action because the organizational actors are not sufficiently informed or for other reasons do not take the cooperation seriously.
However, institutionalization requires also acceptance of the rationale of the alliance and the practices associated with it. This means that internal discussions are needed to justify the initial plans, develop shared understandings of the organizational processes and practices involved, legitimize the consequent organizational actions, and to naturalize these activities. In these processes, the actors usually reinterpret the initial ideas and develop new particular meanings in specific contexts. Although these meanings may vary greatly, important from the performance perspective is that there is sufficient consensus concerning meaningful organizational action. For example, the managers and the employees do not have to agree upon the pros and cons of the alliance, but a shared understanding of the concrete actions is needed to make the arrangement work. However, it is often the case that sufficient consensus concerning concrete actions is not reached and that the alliance plans are never transformed into organizational reality.
Again the role of stories and narratives should be emphasized. The new organizational processes and practices are frequently being justified and legitimized by examples told and spread around in the organizations. From a political perspective, the actors naturally often have a vested interest in developing and forming particular kinds of stories, as outlined in the previous section. From a managerial perspective, narratives of positive organizational changes are naturally powerful tools.
Interestingly, these sensemaking processes often involve stakeholders outside the organizational boundaries. For example, a crucial issue in airline alliances is whether the customers perceive them as meaningful or see some added value in the cooperation arrangements. If this is the case, the alliance probably becomes a recognized institutional arrangement the justification and legitimacy of which is no longer a subject of debate. If this is not the case, the alliance easily becomes a debated or in the end a forgotten arrangement.
When the actors have reached a certain consensus and specific meanings become taken for granted elements of organizational life, there is no longer a need for active collective sensemaking. However, this does not imply the end of sensemaking activity in evolving alliance relationships where new issues have to be dealt with on a continuous basis.
4. Conclusion
We have argued here that the research on strategic alliances in general and international alliances in particular has focused little attention on interpretive processes. We have therefore suggested that alliances could be studied from a sensemaking perspective. For this purpose, we have sketched the rudiments of such a theoretical framework in this paper.
The contribution of the sensemaking approach to the alliance literature is that it sheds new light on important topics in alliance formation, evolution and management. First, the sensemaking perspective provides possibilities to examine the complex cognitive processes involved in alliances, such as learning processes, from a perspective that highlights the formation and construction of meanings. In this context, the specific value of the sensemaking perspective is that it helps to understand the central role of stories and myths as means to spread initial learning experiences. In this sense, this perspective contributes to the previous literature in this field focusing little attention on these ‘irrational’ aspects of learning processes (see e.g. Hamel, 1991; Parkhe, 1991; Doz, 1996; Powell, 1998).
Second, the sensemaking perspective enables analysis of the affective processes in alliance formation and evolution. In general, analyses of the emotional processes involved in international alliances are badly needed. The specific value of this approach in this context is that it helps to understand the role of internal discussions in emotionally-based attachment/alienation processes, which are clearly key mechanisms in alliances.
Third, the sensemaking perspective also provides possibilities to examine specific aspects of the political processes involved in alliances. There are few studies that have adopted a political perspective on international alliances, and the social negotiations and discussions where organizational sensemaking takes place are clearly key arenas of political action. However, specifically important is to understand the key role of ‘management of meaning’ in these processes.
Fourth, the sensemaking perspective can also help to understand the institutionalization processes involved in alliance formation and development. What this perspective can offer is understanding of the processes leading to institutionalization, which adds to the previous knowledge in this field (see e.g. Osborn and Hagedoorn, 1997).
This paper paves way for future studies adopting a sensemaking perspective on international alliances. There is clearly a need for further theoretical reflection but especially for empirical studies of the sensemaking processes. These future studies could focus on specific mechanisms in the sensemaking processes. This study has identified several cognitive, affective, political and institutional aspects in organizational sensemaking processes. A logical step further would be to examine how, for example, cognitive and affective mechanisms are entwined or operate together. It would be particularly interesting to see how emotions are turned into specific cognitions.
There is also a need for more careful analysis and distinction of different facets of organizational sensemaking processes. Future studies could focus on ‘real-time’ organizational sensemaking processes in specific organizational settings. For these kinds of studies, ethnographic research methods involving participant observation would be fruitful choices (see e.g. Van Maanen, 1988). Other studies could concentrate on the actors’ accounts or stories of these organizational processes; how people in retrospective narratives make sense of alliances and the consequent organizational change processes. These studies could draw from methods of narrative analysis (see e.g. Czarniawska, 1997). It would also be interesting to examine how these organizational hybrids are being discussed and socially constructed in the public discussion and media. For this kind of analysis, the logical choice would be to adopt methods of discourse analysis (see e.g. van Dijk, 1997; Fairclough, 1997). For example, public interpretations of international confrontation would be very interesting topics for such studies.
What is the value of this kind of analysis then for organizational decision-makers? Above all, this analysis illustrates how collective sensemaking processes are inherent parts of alliance formation and development. Understanding that different actors attach different meanings to these arrangements is as such important, but it should be emphasized that these sensemaking processes are also closely connected to organizational action. In fact, without such processes the initial ideas of cooperation are never reflected the concrete actions taken or transformed into new organizational practices. These sensemaking processes are, however, very difficult to control or ‘manage’, which may be a major reason for the disappointments often encountered in international alliances.
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