There is a human element in all business relationships and we would be amiss if we were to ignore it. I focus in this blog on how emotions drive strategic alliances and how the presence or the absence of emotions among alliance decision makers can influence success/failure of an alliance. Alliances bring together partners who must balance cooperation and competition in a dynamically changing environment. They must do so in the context of varying corporate/national cultures, different time horizons, fluctuating levels of trust, and conflicting goals. The recipe exists for misunderstanding and confusion and especially so when the sense making process has been less than thorough prior to the onset of the alliance.

Once the alliance is operational a number of possibilities emerge. The ideal case is one where the alliance either meets or exceeds the expectations of its partners and in which case nothing has to be done at all. The case that deserves our attention is the one where the alliance fails to meet its expectations. Perhaps the alliance is not profitable, or perhaps the coordination among partners is proving problematical, or maybe the market environment has shifted or the partner has violated our trust?

Alliance decision makers are in the first instance likely to experience frustration as the performance is below expectations. This then sets the stage for understanding why this discrepancy has emerged? Is it our fault or is it the partner’s fault, or is it just a case of bad luck? There is the natural human tendency to blame the other for the problem and that may lead to escalation unless there is a high level of trust among the partner/s. As each partner blames the other frustration may lead to the expression of anger which may be counterproductive for the partnership.  There is the human tendency to punish the other party when one gets angry. It could simply be a verbal rebuke or in an extreme case a legal action may be initiated.  The more powerful the alliance partner the more likely that they may push back hard. There have been numerous instances where partners have started blaming each other which has led to a spiraling of conflict. In the heat of the moment the partners may say or do something that might worsen the relationship. This is not to say that experiencing this emotion is always unproductive. It is an indication of a problem and there may well be legitimate reasons for the alliance manager/s to feel as they do. The trick here is to use anger in a way that might advance your interests rather than compromising them.

If anger emerges because of the perception that the partner has violated our trust, anxiety emerges when there is a potential threat. Perhaps one is uncertain about the future prospect of the alliance or about the intentions of the partner?  Anxiety is a more diffused emotion but consequential nevertheless. Anxiety motivates individuals to act in ways that might reduce the potential threat. Perhaps this might signal a willingness to compromise, and especially so on the part of the partner who is less powerful.  There is the tendency to initiate a dialogue with the partner to eliminate the perception of threat.

I have highlighted some potential consequences of the emergence of negative emotions in an alliance relationship. Although negative emotions can potentially be detrimental to an alliance’s survival, their emergence can also be beneficial for the alliance because it draws attention to problems that might have gone unnoticed otherwise.  Recognizing problems early is better than letting them develop into something more intractable. In the next blog I will discuss strategies for dealing with negative emotions like anger and anxiety.