If the companies are making strategic alliances for market development, knowledge transfer and growth strategy for entering new market then why strategic alliance failed due to lack of trust, clash of culture and lack of

Some of the reasons for the failure of Strategic Alliance are as follows: Lack of trust: Risk sharing is the primary bonding tool in a partnership. What will happen if one company is successful and the other experiences a failure? A sense of commitment must be generated throughout the partnership. In many alliance cases one company will point the failure finger at the partnering company. Shifting the blame does not solve the problem, but increases the tension between the partnering companies and often leads to alliance ruin. Building trust is the most important and yet most difficult aspect of a successful alliance. Only people can trust each other, not the company. Therefore, alliances need to be formed to enhance trust between individuals. The companies must form the three forms of trust, which include responsibility, equality and reliability. Many alliances have failed due to the lack of trust causing unsolved problems, lack of understanding and despondent relationships. Clash of cultures: Cultural clash is probably one of the biggest problems that corporations in alliances face today. These cultural problems consist of language, egos, chauvinism, and different attitudes to business. Problems can be particularly acute between a publicly quoted American holding company, keenly focused on shareholders' value, and Japanese partners who have different priorities. It is important for the companies that are working together to be able to communicate and understand each other well or they are doomed before they even start. After the communication is worked out the firms face the problems with operations. Different cultures operate in different ways. For example, US companies tend to evaluate performance on the basis of profit, market share, and specific financial benefits While Japanese companies focus more on quality aspects, customer benefits and value addition. Lack of coordination between management teams: Action taken by subordinates that are not congruent with top-level management can prove particularly disruptive, especially in instances where companies remain competitors in spite of their strategic alliance. If it were to happen that one company would go off on its own and do its own marketing and sell its own product while in alliance with another company it would for sure be grounds for the two to break up, and they would most likely end up in a legal battle which could take years to solve. Lack of a Shared Vision: Inherent to a partnership is a shared goal or commitment that will benefit both parties. Making sure that partners start on the same page—and stay there—takes upfront and honest communication in the partnership's infancy and throughout. All too often there is a disconnect in expectations or understanding that will undercut the benefits to both parties and eventually undermine the alliance. Poor Governance: Good governance promotes investor confidence, which is crucial to the ability of entities listed on stock exchanges to compete for capital. Good governance is essential to develop additional values to the stakeholders as it ensures transparency which ensures strong and balanced economic development. This also ensures that the interests of all shareholders are safeguarded. Poor Governance can dilute the strategic alliance.