The Study On The Stability Of Enterprise Strategic Alliance Under The Condition Of Contractual Incompleteness

Nowadays, enterprise strategic alliance has become part of the core strategy for enterprises. However, numerous financial examples and statistic data show that the failure rate of strategic alliances is remarkably high (between 30%-50% or even higher), representing that the stability of those alliances is faced with great challenges. In some typical cases, an alliance even broke down before achieving its presumed goals. Such facts have attracted intense attention widely spread in both academia and business circles. To achieve the success and the sustainable development of an enterprise strategic alliance, intensive research on the stability of the alliance must be carried out.In this paper, definition and classification of enterprise strategic alliance are briefly stated at first. Then we suggest that the stable relationship within an enterprise strategic alliance can be described as a dynamically cooperative relationship to some extent, thus clarifies the meaning of the stability of an enterprise strategic alliance. As for the object of study, we precisely choose the contractual strategic alliances tied by long-term cooperating contracts. Based those mentioned above, we successfully construct a four-stage dynamic model of the life cycle of a contractual strategic alliance, and then perform thorough analysis on the major function of each stage in the life cycle.Moreover, from an economic point of view, we carefully analyze the contractual relationship of enterprise strategic alliance, and prove that the incompleteness of the contracts is a result of objective necessity. Consequently, our results reveal that the incompleteness allows the existence of opportunistic behaviors by members of a contractual strategic alliance. Followed by further analysis on origin and mechanism of decay of the stability of a contractual strategic alliance, we propose that there exist five main factors determining the stability of the alliance:Trust within the alliance, Transfer of intelligence within the alliance, Benefit allocation within the alliance, Culture fusion within the alliance, and Adaptability to outer environment of the alliance.Finally, discussion on the establishment of mechanisms for maintaining the stability of an enterprise strategic alliance is presented. The maintenance mechanisms include the contract-based formal maintenance mechanisms and reputation-based informal maintenance mechanisms. Besides utilizing contract-based formal maintenance mechanisms to confine opportunistic behaviors by members of an alliance, we suggest that, for the objective existence of incompleteness in the contracts, the alliance should also adapt reputation-based informal maintenance mechanisms as complements and intensifiers to strengthen the stability of itself.