Strategic Alliance Between Nokia and Microsoft
Business Administration knowledge assists the implementation of the strategic alliance between Nokia and Microsoft from several aspects. To begin with, decisions about leadership are one of the most disturbing problems in the strategic alliance; interim leaders are appropriate solutions to the issue (Werther, 1998). Interim leaders are those haired from a third party, not belonging to the alliance partners. Compared to selecting a leader from one of the partners, interim leaders have their advantages.
It eliminates the assumption from both the public and the employees that one party has the domination, which assists to build a neutral image of the alliance (Werther, 1998). Therefore, Nokia and Microsoft are in a fairly equivalent position in the alliance. Moreover, their focus is the success of the alliance rather than the benefits of one of the alliance parties (either Nokia or Microsoft). Compared to outside consultants, interim leaders also have more merits.
Werther (1998) suggests that interim leaders have operational or practical authority instead of advising authority owned by consultants, and they are suitable in the start-up stage of the alliance. As the alliance between Nokia and Microsoft has just begun, interim leaders can be helpful. Interim leaders contribute to distinguishing between “actual values that are ‘in use’ from stated or ‘espoused’ values that are merely touted for internal or external consumption” (Argyriset al, 1985; cited in Werther, 1998, p. 342). Thus, Nokia and Microsoft should select an interim leader from the third party rather from themselves.
In addition, information flow management including intellectual property protection is crucial to the success of the alliance. Microsoft is the leading software company in the world, and Nokia has been the leading phone manufacturer all over the world. Thus, the value of intangible information can be even greater than tangible assets companies own. However, partners are often in a dilemmatic situation where they want to balance the outflow of information to successfully achieve the task and the protection of intellectual asset (Osborn et al, 2001).
The careful management of information is of great importance. Firstly, alliance managers need to have a clear understanding of partner’s intention of learning and the extent to which partners are willing to learn from cooperators (Ireland et al, 2002). Then, suitable organizational control like “integrating mechanisms and use of interest-aligning incentive plans” (Geringer& Herbert, 1989; Kumar & Seth, 1998; cited in Ireland et al, 2002, p. 437) can be used to manage information flow.
When it comes to intellectual property protection, both Microsoft and Nokia should think about the value of the company’s intellectual asset and decide the key components that belong to inadvertent transfer. In this case, Microsoft may need to have a consideration of the safety of core techniques involved in providing the operating system. Moreover, Gadieshet al (2002) emphasize the necessity to have an intellectual property audit internally before alliance, with companies whose central capital consist of intellectual property.
Lastly, building trust between partners also contributes to the success of strategic alliance. Trust means that the partner’s behaviours will meet expectations, and it leads partners to bear risks and produces a positive effect on the alliance (Ireland et al, 2002). Continuing to show the company’s goals for strategic alliance while partners do the same and demonstrate patience are important actions in building trust (Cullen et al, 2000; cited in Ireland et al, 2002, p. 38). As the problems are usually clearer to middle managers and engineers who experience every day alliance activities (Osborn et al, 2001), thus, the trust and communication building between these people from Microsoft and Nokia cannot be ignored. All in all, experts and managers with sophisticated business administration knowledge are required to implement these tasks. The successes of these aspects contribute to the success of the strategic alliance.
