Exploring management issues of cross-border R&D alliances in the Australian biotechnology industry

Inter-firm collaboration has become common these days and its importance as a research subject is increasing. Firms form alliances for various reasons including access to their partner’s technical and financial resources and accessing new markets for their products; in some cases businesses collaborate simply to survive. These alliances are not restricted to the geographical boundaries of a city or a country, and frequently they extend beyond national and trade-bloc boundaries, although the majority of these alliances are formed in ‘triad’ countries from Europe, North America and Japan. Cross-border alliances produce greater complexities for organisational management. Cross-border alliances have helped organisations achieve strategic business advantages all over the world. Studies on cross-border alliances among companies within Europe and North America have revealed interesting outcomes that have impacted significantly on the success of such alliances. Despite the success of many alliances, the research literature reports that a large proportion of these alliances end up in a failure or were simply not sustained. The literature concerning global alliances is rich in descriptions and discussions of the individual components of the alliance process. These components include alliance motivation, alliance formation and alliance sustainability. There is however a need for research that takes a systems approach to the study of strategic alliances, from initiation through to conclusion. Few studies have undertaken this task and there is no consistent conceptual model for underpinning such work. This gap in the literature suggests the need to examine individual components of the strategic alliance process and identify the relationship between them. This thesis seeks to deal with that problem through an investigation of research based strategic alliances. It adopts a systemic approach towards strategic alliances by developing a new conceptual model of an integrated strategic alliance process that covers all stages and functions. The objective is to lay foundations for more in-depth, systems-based studies of strategic alliances. The argument that is developed in this thesis is that the whole process from alliance formation to alliance conclusion should be considered an integrated system. A holistic study of this system can provide an understanding of how a change in one part of the process affects other components, something not possible when studying each segment in isolation. In order to develop this model as a heuristic research tool, an exploratory study is undertaken through six case studies of research and development (R&D) alliances formed in the Australian biotechnology industry with partners from selected countries in North America, Europe and Asia. The case studies include industry–industry alliances (between biotechnology and pharmaceutical companies) as well as university–industry alliances (formed for the development of medical instruments). Although the two groups of alliances have inherent differences, there are also some underlying structural similarities. The similarities in the two groups are in the initial stages (motivation and formation stages) of the alliance process. However, they differ in the sustainability stage. The findings support the proposition that the alliance phenomenon is a three-stage process (motivation, formation and sustainability) and that these three stages are interrelated. All six cases demonstrate that each case followed the new conceptual model of the alliance process and went through all three stages from motivation to formation and then to sustainability. These stages were found to be sequentially interrelated, as the outcome of each stage was identified as a prerequisite for the next. It was also identified that if a change occurs at an early stage, the alliance could still be affected at a later time, even though the alliance had successfully passed through the initial stage. The findings of this study serve to set out a framework with guidelines for alliance partners in general and to Australian organisations in particular so that they can assess the health of their existing alliance or evaluate the feasibility of a future one