Comprehending Organizations Cultural Compatibility as a Success Factor in Alliance Formation : Five Case Studies on Cultural Compatibility

Abstract: Problem: To compete effectively in today’s global market, organizations are eager to expand their operations abroad. Entering a partnership accounts as a preferred way of doing this. In order to be allowed to participate in many important markets, corporations must recognize the influence of cultural orientations other than their own. In many cases it appears that this is however neglected, considering that up to two out of three partnerships ends in dissolution. Causes related to the cultural aspect of a relationship are often mentioned to form the root of the problem. We noticed that a vast number of studies have focused on how culture affects single organizations, fewer studies however focused on how partnerships are affected by cultural aspects. And even fewer studies have tried to decipher the role that cultural compatibility has prior to entering a partnership. More so, throughout our extensive literature review, we have noticed that there has not been obtained a comprehensive understanding of what cultural compatibility entails. Purpose: The intentions of our research are twofold: first, we have theoretically derived a framework that allows a comprehensive understanding of cultural compatibility as well as its influence on alliance performance, and second, we have explored how this theoretically derived framework is reflected in practice. Method: To achieve the purpose of this study we completed a qualitative, exploratory research including five case studies and five interviews/consults. The case studies were well selected based on requirements such as industry significance and the implication of a high level of cultural diversity. Conclusions: The major conclusion to our research indicates that cultural compatibility is not necessarily a requirement prior to entering a relationship, but unveils to be moreover a foundation that partnering firms should strive for in the early stages of their coalition. Additionally, we have obtained many valuable insights, yet utmost we have experienced that the subject is extremely complex, and that further research on the topic as well as the framework is indispensable to further justify our findings.