Citation

Young MN, Ahlstrom D, Bruton GD, Rubanik Y. Bus. Horiz. 2011; 54(2): 163-174.

Copyright

(Copyright © 2011, Indiana University Graduate School of Business, Publisher Elsevier Publishing)

DOI

10.1016/j.bushor.2010.11.005

PMID

unavailable

Abstract

A financial system engaged in active transition from central planning to free market may be dubbed a transition economy. On today's global landscape, there are several important transition economies, all at various stages of transition and with differing degrees of success. Yet, much is not known about this important sector of the world economy. As outside enterprises seek alliances with firms from transition economies, it is important to know what these firms want from alliance partners. To learn more, we conducted a study interviewing managers of private firms from the two largest and most strategically important transition economies: China and Russia. We found that while Chinese and Russian firms often hope for some of the same things as their counterparts in mature economies as regards alliances, they are also interested in other things not normally associated with alliances: political influence, relief from paying bribes, and protection from extortion or even violence. Moreover, we discovered that because of differing institutional conditions in the two countries, Chinese firms are not always looking for the same things from alliances as are Russian firms--in spite of surface similarities between the two economies. Based on these findings, we provide guidelines for firms seeking alliance partners in transition economies, to assist them in determining if an alliance is right for them and planning accordingly.