Unpacking strategic alliances: The structure and purpose of alliance versus supplier relationships

While strategic alliances have received a great deal of attention from academic researchers and practitioners, we still know relatively little about the contracts that govern these alliance relationships and their difference from more complex buyer–supplier contracts. Through an exploration of 15 alliance contracts to develop jet engines between a major aerospace manufacturer and eleven different alliance partners, we seek to understand the structure and purpose of these alliance contracts and their differences from standard buyer–supplier contracts. The alliance contracts we study are designed to share risk, facilitate learning and the exchange of knowledge, specify roles and responsibilities, and provide administrative mechanisms for adapting and resolving disputes. What emerges from this study is a better understanding of how alliances differ from other types of interfirm relationships and how these differences are reflected in the alliance contract.