A conceptual framework for international defence industrial alliances : motivations, advantages and business entry mode preferences

• Main Author: Bennett, Martin Edward
• Published: University of Liverpool 2017
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.733881

Research into organisational alliances in the context-specific domain of the international defence market has to date been predominantly focused on multinational enterprises' (MNEs') motivations, competitive advantages and entry modes related to foreign direct investment decisions. This is a highly topical area as traditional markets continue to evolve rapidly due to macro environmental pressures such as decreasing defence budgets and increasing competition, thus propelling MNEs to seek business in new, emerging, markets. Emerging market organisations (EMOs) are however now demanding more value from their national defence procurement programmes, for example building the development of indigenous capability through the production of major complex programmes e.g. ships or aircraft, or the development of the local supply chain through second and third tier level supply. The pluralistic nature of the host market EMO and the changing trends in strategic collaborative decision-making, are highlighted in this research. This work adopts a rigorous practice based view of the analysis of data collected from a representative sample of professionals from within the defence sector across emerging and developed countries. Further, it extends theory by exploring the efficacy of the eclectic paradigm as a theoretical lens to further understand the implications of the diverse collection of motivations, advantages and entry mode preferences on both MNEs and EMOs in alliances. An action research methodology using an abductive, mixed method approach was used across two separate phases. Employing a multi-national, cross-sectional sample of stakeholders from across defence MNEs in UK and the USA, and EMOs in Colombia, Brazil and Turkey, my empirical model developed through this research, the Emergent Alliance Adaptation Framework, validates the importance of motivations and advantages in determining entry mode decisions within the dyadic. Highlighted during the interviews is evidence suggesting that a mutual desire for industrial level partnerships is moderated by environmental influences, such as politics and macro-economics, and further that market access and technology/capability are respectively value factors on MNE and EMO decision-making within alliances. These are of immediate, practical interest to those contemplating international industrial alliances and have proven of specific value to practice.