Eisemann, Heginbotham and Mitchell (2015) position external challenges as being an issue particularly in the case of international relations between countries. The decision as to who to undertake an international strategic alliance with is therefore important in particular due to the cultural dynamics that exist between China and international partners. The more culturally different an organisation is the more likely it may be for challenges to occur. Such cultural challenges as noted by Schein (2012) may be fundamental to action and change.
Doz (1996) argues that cooperation within international strategic alliances is a learning process and therefore despite being faced with challenges, the approach to such challenges will be dependent upon solutions put in place aligned to the business environment. An organisation may for example have to accept challenges as a natural part of the process when dealing with strategic alliances on an international basis due to heightened cultural conditions.
2.8 International Strategic alliances in China
An alliance is often considered to be a strategic move and this is widely the case in China where alliances are considered to fuel not only organisational level growth but also economic growth. Referring to a wide body of literature across the international business field, alliances may stimulate improved international connections, which in turn allow for organisations that undertake alliances to perform better than those who don't. In particular, as noted in the work of Jin, Von Zedtwitz and Chong (2015), in the Chinese mobile telephony industry alliances have become the 'cornerstone of global competition' and have so due to the focus on capabilities and sharing of resources capable of dealing with increasingly dynamic business environments. The sharing of technology and the capabilities surrounding technology are particularly prominent due to the technological capabilities of China as a whole which in turn opens up international opportunities. Xu and Hitt (2012) argue that Chinese firms aim to often align with Western firms in order to support the difficulties they may face as part of the internationalisation process. Dunning (2015) argues that in light of this focus on strategic alliances there is a need to reappraise the way in which firms undertake foreign direct investment. Firms strategically look for alliance partners and then use alliances as a way of tapping into previously unexplored markets. This is therefore an example of a valuable knowledge exchange, which takes place to support different international markets and the unique knowledge required almost as a pre-requisite to entry (Lew & Sinkovics, 2013).
Luo (1996) conducted a study to evaluate the performance of strategic alliances in China and referred to the power of global strategic alliances in the automotive industry. Luo (1996) noted that strategic alliances can be thought of as an organising framework where partnership and relationships facilitate the knowledge and capabilities required to sustain an international growth strategy. Perceptions of strategic alliances from a Chinese perspective have also been explored with Dong and Glaister (2007) exploring the cultural differences from a Chinese perspective. One key determinant Dong and Glaister (2007) note in the relationship is the importance of trust in facilitating success in this relationship. This reinforces the work of Das and Teng (2001) who articulate the resource based theory of strategic alliances in pooling
