MANAGING in the

NEW WORLD

A lot of business alliances do not work. A clear example is that between French carmaker Renault and its Swedish counterpart Volvo. It worked well for a few years, but excess French government interference, but an end to this marriage of convenience. Reluctantly Renault took the decision then to ally with then struggling Japanese automotive player Nissan. The latter had then been struggling for years, so Renault decided to acquire a certain stake in it. Within a few years, Nissan was making good money again. The reasons for this successful and durable alliance may be plenty. But one area of clarity, right from the start of this merger of sorts, was that the transactional mentality would be set aside, replaced by one of mutual dependence. The corporate strategy was revisited, with points made for collaboration. A transition was also made towards a boundary- spanning alliance leadership. Common goals were thus set in. A sense of trust was built in, individually at both organizations. This also needs a cultural awareness of the other’s presence in the partnership. Periodically, all alliances need to be revisited to understand the continuing gains.

Source:https://knowledge.insead.edu/blog/insead-blog/designing-durable-alliances-lessons-from-renault-nissan-10726

Uploaded Date:22 January 2019

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