Success and Failure Factors in Inter-Firm Strategic Collaboration : The Case of Strategic Alliances in Pharmaceutical Firms

• Purpose: The aim of this paper is to identify the key factors that determine the success andfailure in international inter-firm strategic collaboration with focus on strategic alliances inpharmaceutical industry in Iran.Design/Methodology/approach: After a comprehensive literature review, combined withexpert panel’s views, 33 success factors were specified to be studied. The factors were groupedas content and process orientated variables showing the importance of considered factor instrategic and structural configuration or the process of developing an inter-firm collaboration relationship respectively. A combination of quantitative and qualitative (integrative) method was used for data collection and analysis. The quantitative data were gathered by a structured questionnaire, including questions on the respondent’s background and 33 success factors.The qualitative database consists of 21 in-depth interviews carried out with managers of nine companies, four of which were international partners. Furthermore, the views of our expert panel have been identical to the study. Due to limited experienced managers in this field in Iran, questionnaires were distributed to 100 managers at different levels in Iranian pharmaceutical manufacturer companies with 79 completed usable questionnaires returned. For statistical treatment of quantitative data, SPSS software was applied. For evaluation of reliability of study, Cronbach alpha value was used, the effectiveness of success factors on (success of) inter-firm cooperation were assessed by binominal analytical tool. The Freidman analysis was used forranking the success factors.Findings: The results of quantitative and quality data showed that mutual understanding of provision of agreed resources from both partners had major importance in making successful co-operations. Considering the gap between importance of each factor and its real situation in current allianceseleven failure factors were specified: the absence of precise definition of parties’ rights and duties, the absence of right contribution of partners, lack of any specified strength and resource to be delivered, low strategic flexibility (low flexibility in making strategies compatible withpartner’s one), the absence of information and coordination system, the absence of proper control on their core competence and the knowledge transfer way, lack of systematic reviewing the alliance activities (for knowing if any early benefit or for prevention of any potential conflict), showing opportunistic behavior, not trying to make joint values (looking for short term tangible results), incompatible business strategies of two partners and no commitment to partnership. The quantitative findings showed four of very important success factors are process-oriented variables; which mean process of developing an inter-organizational relationship and dealing with matters such as building trust and mutual understanding are much more important in establishing successful pharmaceutical alliances in Iran while eight of found failure factors arecontent-oriented which means most of failed alliances had difficulties in strategic and structuraldesign of the alliance. However, the qualitative data revealed that the soft aspects of alliancesuccess are very important, such as culture of collaboration, open-mindedness, relationship building ability, parties’ enough knowledge about each other’s business culture and working attitudes as well as effective communication. Furthermore, the study reveals that the local government and public institutes have significant impacts on the success of the alliances, particularly in Iran that government interfere the business significantly. Not surprising, the perception of parties on success or failure of the alliances may be different as well. That is, an alliance being perceived successful by one partner may not be perceived successful by another partner. This finding has implication on future studies.Originality/value: The study provides empirical evidence regarding the key success and failurefactors in international inter-firm collaboration, in pharmaceutical industry in a developingcountry (Iran) and adds depth to the understanding of the reasons behind the failures. The study sheds light on the necessity of considering both parties’ perception of success and failure.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business (hsv//eng)

Keyword

Inter-firm collaboration

strategic alliances

key success factors in strategic alliances

success and failure of strategic alliances

pharmaceutical industry

Iran

Publication and Content Type

vet (subject category)

kon (subject category)