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Case: Communicating strategic alliances – You scratch my back and I’ll scratch yours

Communicating strategic alliances. One of the topics that we discussed during the seminar Organizational Communications at the University of Amsterdam under guidance of internationally known internet and communication scholar Jim Slevin.

In the online discussion environment Blackboard I made a comment on a post about alliances between NGOs and commercial organizations. It rapidly became an extensive thread and participants in this thread went looking for examples of alliances that didn’t work out the way involved organizations would have liked. This blog is an editorial piece of the online discussion combined with some theoretical reflection on the matter of communicating strategic alliances.

Regarding to examples of strategic alliances that went haywire, I found an example in the Dutch energy branch, namely the collaboration between the Dutch energy company Essent and the World Nature Fund (WNF). They formed an alliance for innovation in energy production and sustainability. The partnership lasted for almost 14 years, but due to the takeover of Essent by a German energy company the WNF ended their contract in 2009. The reason was simple: According to the WNF the new owner of Essent was one of the most polluting organizations in the world, and this did not in any way connect with the innovation and sustainability goals that were set in the contract between Essent and the WNF in the first place.

“Strategic alliances can provide leverage for an organizations market position”

Interesting enough the WNF recently joined forces with another Dutch energy company, Eneco. The goals they have are similar to the goals they were striving during their alliance with Essent. Official statements note that the organizations together see the urgency of making energy production more sustainable. Zhang, Shu, Jiang and Malter (2010) mention that new strategic alliances are mostly focused on innovation. This is exactly what Eneco and WNF are communicating. We can recognize parts of their theory in this case. They argue that strategic alliances can provide leverage for an organizations market position. In a world where more and more organizations are specializing and where competition grows each day for example because of globalization, more and more organizations seek alliances to aim for innovation. Zhang et al. (2010) state that both competition and cooperation motivates learning. It might be that the World Nature Fund has gained some valuable lessons from their partnership with Essent. These learnings could have helped in setting up the new alliance with Eneco.

Although Zhang et al (2010) focus on learning through competition and cooperation. I also think that learning often occurs after things went wrong. I’d like to reflect on the case of Eneco and the WNF by comparing some aspects of that partnership with some of important aspects of strategic alliances that are presented in the article of Segil (1999). I also found these aspects in other recommendable business literature (Johnson, Scholes and Whittington, 2005; Child, 2005). Segil (1999) argues that one of the most important requirements is a fit between cultures of both organizations. I think that in the case of Eneco the difference in organizational culture could have been an issue from the beginning. Although the energy company pursued to be sustainable, it will always be an energy company and energy production will always costs energy, which means that the organization will always be pressuring the environment. I feel that the discrepancy in corporate culture between Essent and the WNF became even more obvious after the takeover by the German company. I think continuing the contract would also have led to criticism in the direction of the WNF, what in time perhaps could have led to a loss of credibility.

“It’s a clever move for energy companies to ally with one of their most influential stakeholder groups”

The tricky thing about social strategic alliances is that organizations are likely to have a very distinctive individual personality, especially organization like the WNF that are typical issue organizations. Although Segil (1999) mentions this should be overcome or prevented, I think it’s very hard for NGOs to be not distinctive. Since they are issue organizations they build their identity around issues (Van Tulder and Van der Zwart, 2003). They can carry out their identity even more easy than before because of the rise of net-media. Only if the other organization, for example an energy company, adjusts her identity to an NGO this fit will work. This relates to this weeks spark about communicating strategic alliances: ‘I’ll scratch your back if you scratch mine”. I think it’s a clever move for energy companies to ally with one of their most influential stakeholder groups. They might decrease some organizational risks with that. I’d like to put it as follows: “If you can’t beat them, join them”.

References:
Johnson, G., Scholes, K., & Whittington, R. (2005). Exploring Corporate Strategy: Text & Cases. Harlow: Pearson Education Limited
Segil, L. (1999). Alliances for the 21st Century. Executive Excellence, 16(10), 19.
Van Tulder, R., & Van der Zwart, A. (2003). Reputaties op het spel: Maatschappelijk verantwoord ondernemen in een onderhandelingssamenleving. Utrecht: Het Spectrum.
Zhang, H., Shu, C., Jiang, X., & Malter A.J. (2010). Managing Knowledge for Innovation: The Role of cooperation, Competition, and Alliance Nationality. Journal of International Marketing, 18(4), 74-94.

 

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