The negotiator’s power as enabler and cultural distance as inhibitor in the international alliance formation

• Position and person power of the negotiator influence explorative and exploitative purpose in the alliance formation.
• Cultural distance between the negotiators in the international business has adverse influence on the negotiation outcome.
• The cultural distance on the negotiation for explorative alliance has a stronger influence than on exploitative alliance

We examined how the negotiator’s power, the explorative–exploitative purpose and cultural distance interact in the negotiation for an international business alliance formation. Our participant observation in some several events of negotiation suggests that the executive’s power plays an enabling role in the negotiation for alliance formation. However, cultural distance between the negotiating parties in the international business context hampers the success of the negotiation. In particular, person power supports the explorative alliance purpose. The explorative alliance embodies technical and behavioural uncertainty. On the other hand, position power supports the exploitative alliance purpose. The exploitative alliance purpose more aptly embodies behavioural uncertainty than technical uncertainty does.Cultural distance has a high negative influence on person power and the explorative alliance, and person power and the explorative alliance indicate high uncertainty. In comparison, cultural distance has a negative influence on position power and exploitative alliance, and position power and exploitative alliances indicate low uncertainty. In other words, cultural distance matters more in the person–explorative combination than it does in the position–exploitative combination. The main assumption is that cultural distance has adverse effects on both power and tasks in the negotiation. However, the notions of power and purpose do not influence the effect of national cultural differences.