Management Decision

Internal and lateral communication in strategic alliance decision making

Colin J. Butler

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Internal and lateral

communication in strategic
alliance decision making

698

Colin J. Butler
University of Greenwich, London, UK

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Abstract
Purpose The purpose of this paper is to investigate differences in decision-making processes
between UK and non-UK managers in the defence manufacturing industry.
Design/methodology/approach A pilot study was conducted with a small number of firms in
Yorkshire, UK. A large-scale survey was conducted of 250 firms in the UK. The response rate was 60
per cent.
Findings Decision making is kept team-orientated in larger firms with decision making autonomy
in place for each team. The research demonstrates that leading firms drive best practice and best
practice research disseminates globally through industry-academic collaboration.
Practical implications Alliances with leading firms will lead to the evolution of team-based,
programme structured decision making in UK-non-UK strategic alliances.
Originality/value Global managers learn from the experiences of team-based programme
structured decision makers.
Keywords Communication, Strategic alliances, Decision making, Defence sector, United Kingdom
Paper type Research paper

Management Decision
Vol. 48 No. 5, 2010
pp. 698-712
q Emerald Group Publishing Limited
0025-1747
DOI 10.1108/00251741011043885

Introduction
Strategic alliances with foreign partners carry challenges in communication at all
levels of the organisation. Some strategic alliances can have five partners from
different countries in the alliance structure for example. The quality of communication
internally, within each firm, and laterally, between partners can differ between every
alliance formed. This affects the decision-making process within the firm and between
the firms.
The increase in technology development costs combined with the increase in
competition from foreign firms for domestic contracts, compels firms to compete more
vigorously in the export market. The main mechanism for greater access to the export
market, apart from acquiring a local firm, is to form strategic partnerships with local
firms. Thus, strategic alliance activity is growing at a fast rate. Partners from around
the world are sought and this increases the importance of having clear communication
in decision making.
In multinational firms, senior management may know very little about some of their
firms strategic alliances particularly. It is the supervisory personnel, particularly
technical and R+D personnel who have to interpret technical specifications, which can
change after several rounds of translation and re-translation.
Clear communication is very important to ensure understanding. This will save on
time delays and ultimately on costs. The nature and effects of internal and lateral
communication channels in strategic alliances with firms from foreign countries is

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under-researched. This research aims to study the relationship between problems in

internal and lateral communication and decision making in strategic alliances.
The objective of this paper is to investigate if there are weaknesses in the control of
internal and lateral communication between UK and non-UK managers in defence
manufacturing firms using cross-border strategic alliances.
Literature review
The global defence industry has undergone major changes since the beginning of the
1990s. The reasons for these changes have been a combination of decreasing
expenditure on weapons due to a lessening of military threats and the continuing
acceleration in costs of researching and developing weapons technology. The changes
in public money by national government being spent on equipment has also been
accompanied by changes in procurement practices with the emphasis on obtaining
better value for public money from defence manufacturers.
Government-owned defence companies have become privatised and previously
protected domestic markets have been opened up to foreign suppliers. This has the
effect of making the industry more lean and efficient. There is an increased
dimension of risk and reward in the industry. Many industries, however, remain
publicly owned and, thus, both protected and politicised. This does not bode well
for private firms seeking to increase co-operation within the industry on a global
basis. There is a small pool of potential partners in the industry compared to other
industries and a holding by a local government seriously affects the strategy for
cross-border co-operation.
In 1968, the UK was involved in the development of the Tornado with Germany and
the Italy and this history of co-operation evolved to the manufacture of the Eurofighter.
The best method for UK firms to acquire the most leading edge technologies, ISR, C4
and GPS is to promote long lasting, deep rooted transatlantic defence industrial
partnerships with the US partner being senior.
Ashbourne (1999) agrees, saying that transatlantic co-operation is the best way to
remain globally competitive. One of the biggest problems remaining for the European
industry is the parallel existence of privately-owned firms in the UK and Germany and
state-owned industries in France, Italy and Spain with the innate clash of management
cultures and communication this situation imbues.
The management of manufacturing systems in operation within the industry has
had to be changed in order to accommodate the new business environment. Not only
were defence managers sheltered from commercial practices and competitive markets
for many years but, with thousands of jobs shed, a lot of experience was lost. The
defence industry suddenly found itself operating in a market closer to the market
conditions of other industries.
It was, however, and remains, unique both in fact that buyers are national
governments spending public finance and in the fact that the products manufactured
are of utmost strategic importance to regional and global security.
Defence managers cannot, therefore, simply apply best practice from other
industries to their own. The managers, exposed to commercial practices, have been
learning the best methods for accessing markets, increasing profitability, keeping
shareholders happy and following government recommendations on tendering and
exporting.

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Changes in the industry environment pose new challenges for those involved in
industry management. Like all industries, the execution of business between buyers
and suppliers requires certain skills, which reflect the unique demands of the particular
industry. For many years up to the early 1990s, the management skills required by
executives working in defence manufacturing were not as tested by the same market
conditions as those of their counterparts in other industries. The market environment
now, though, has become more competitive than ever before. This brings new demands
on the management skills of defence personnel.
Strategic alliances such as collaboration have helped managers by sharing
development costs and securing longer production runs. One of the effects of increased
competition has been for firms to attempt market stabilisation behaviour by the
formation of pre-competitive collaboration in weapons and defence equipment research.
Martin and Hartley (1997), p. 21) pointed to the decline in defence spending as a
fundamental cause of re-structuring. They noted that increased exports is one way in
which individual firms might attempt to make good declining sales in the European
and US markets. There are three main advantages to collaboration in defence
manufacturing. The first is that collaboration enables participating countries to move
into technological sophisticated areas formerly beyond their national reach. The
second advantage is that alliances should result in lower unit costs and the third
advantage is that the benefits can be spread to the subcontractor level.
Alliances assist the spread of technology and, arguably, the proliferation of local arms
races. Defence firms are being compelled to compete more vigorously on the export
market by the combined pressure of reduced budgets in their own market and rising costs
in technology development. If firms do not seek to compete on the export market and try
to access new markets, they may find their own market under attack from foreign
competitors. As these foreign competitors become more trans-national, they will be able
to avail of the benefits of production in each country. This allows them to offer better
technology at cheaper prices than firms desisting from any form of a trans-national
strategy with a large proportion of weapons subsystems comprised of software.
Any alliance can only succeed if organisation members communicate freely in every
direction, both internally and externally; adapt well to structure and culture changes;
and identify and solve problems collaboratively and amicably, encouraging team
building and empowerment and, at the same time, avoiding petty squabbles and power
struggles (Lloyd and Varey, 2003).
Whether organizational change results in a new venture or a new process
improvement approach, employee communications can mean the success or failure of
any major change program (Barrett, 2002). Ritter (2003) argues that the only way to
ensure that corporate communications develops with corporate strategy is to conduct
audits. While, undoubtedly, organisations realise the importance of good
communications, they often find it hard to forge the link between what gets said
and what gets done (Kitchen et al., 2002). Proper and effective communication in one
culture may be improper and ineffective in other cultures.
Thus, business people who wish to be successful in their global communication
must be aware of these differences and must be prepared to deal with these differences
(Spinks and Wells, 1997). Markets are changing and this changes the nature of
competitive relationship as found by White (2005). Competitive and co-operative
relationships between small and large firms are different than ones between large firms
and large firms mainly due to the large firms insistence on control of decision making.

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Communication occurs vertically and laterally in strategic alliances (Rodriguez,

2005). Norisada (1993, p. 47) defines business communication as communication in the
workplace with the goal of having fixed, practical efficacy. UK firms are moving
towards flatter lines of communication and team-based consultative communication in
alliances. All members on the team participate in vertical and lateral communication.
Sometimes with foreign partners, this is not the case. Mohr and Spekman (1994)
showed that when communication quality in supplier-customer relationships
measured in terms of accuracy, timeliness, adequacy, and credibility is higher,
satisfaction with supplier-customer relationships is higher as well. Communication is
vital to the success of strategic alliances (Doz and Hamel, 1998).
Interpersonal communication plays an important role in the management of
supplier-customer relationships. A buying organization should give serious thought to
building and maintaining relationship quality (Large, 2005). Tuten and Urbans
research (2001) confirmed the role of communication as an important factor of
partnership success. From a tactical standpoint, the management and supervisory
cadre should become familiar enough with the progress to answer questions
knowledgeably as they emerge, individually and in meetings of subordinate groups
(Klein, 1996). Corporate culture differences are a more important factor contributing to
different views on the management of JVs compared with national culture differences
(Bener and Glaister, 2009).
Internal communication can be improved by different groups co-ordinating better. If
decision making is made by different groups, pertaining to different areas of business,
then overall performance of the strategy for the alliance will be changed.
To the extent that two organizations are competitors for entering resources, any
relationship will have strategic implications that are specific to each partner and the
competitive relationship between the partners may change over time (White, 2005,
p. 1397). Ohmae (1991) found that in order to successfully manage a global business,
firms could not afford to focus on control of decision making to the detriment of
communication and cultural relationships.
Kanter (1994) recommended that firms should only worry about control of decision
making of decision making if a partner behaves in a suspicious manner. Control of
decision making relates mainly to corporate decision making between the alliance
partners and ownership of the alliance structure (Hamel, 1989). In other industries, the
fear of giving control of decision making away to a bad partner is the main concern
(Brouthers et al., 1995). Alliance structures allow partner companies to transform
performance and lead industry developments as well as respond quicker to market
changes (Anslinger and Jenk, 2004).
An alliance between two organizations is affected by their overall relationship as
well as their overall third party relationships (White, 2005). Kanter (1994) found that
alliances could be for a short or long duration. According to Kantors theory, firms tend
to worry too much about control of decision making in the relationship. Hamel (1989),
p. 139) found that managers are too often obsessed with the ownership structure of an
alliance. Interpartner legitimacy is needed for cooperation to achieve alliance
objectives (Kumar and Das, 2007).
Whether company control of decision making is 51 or 49 per cent of a joint venture
is much less important than the rate at which each partner learns from the other
through mutual exchange and communication. Ohmae (1991, p. 148) found that there is
a dispute between managing effectively and control of decision making and that you
cannot manage if you are fascinated by control of decision making. He states you

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cannot manage a global company through control of decision making. He found that
few businesses succeed because of control of decision making (Ohmae, 1991, p. 151).
According to Ohmae (1991, p. 147) managers must overcome the popular
misconception that total control of decision making increases chances of success.
The final-outcome of an alliance relationship will depend on the development of trust
and commitment over time, which in turn will depend on the motives with which firms
enter into a relationship (Sankalp and Ajai, 2009).
With the development of globalisation, communication is, more and more, centred
on the domain of the organisations ICTs (information and communication
technologies). This is replacing valuable high-level face-to-face communication
between the relevant decision makers and strategy-makers. Marsh (1994), and Robson
and Tourish (2005), found that more face-to-face communication, were desired by
managers, and that lack of communication, caused by technology use, was a problem.
Research has shown a greater interest in a more human-centred communication
approach, which involves procedures such as face-to-face contact, feedback, two-way
communication (Belmiro et al., 2000).
Communication has two key objectives in the management of change. The first is to
facilitate understanding by those who need to adopt new processes of what will change
and why. Interpersonal communication is a substantial part of the interaction process
and can therefore be regarded as a process element of relationships and networks.
Increasing meetings between senior executives should improve the quality of
communication.
There are, however, limitations on how much contact personnel from different levels
of the organisation can have due to time and cost restrictions. In some circumstances,
increasing the communication at lower levels may be more efficient. In alliances with
large numbers of partners, more communication could mean more misinterpretation
particularly if several different cultures are involved. Communications need to be
integrated if only because disparate messages underline ambiguity (Kitchen and Eagle,
2002). The importance of a multidisciplinary effort including personnel from
management, technical and operating teams, in successful alliance formation, was
identified in the work of Kotabe and Swan (1995). Decision making should be
communicated across all groups in the organisation. This leads to five hypotheses for
this research:
H1. Technical decisions in defence manufacturing alliances are made without
communication to management levels.
H2. Strategy in defence manufacturing alliances is formulated without
communication to non-management levels.
H3. Communication in defence manufacturing alliances decision making is
improved by senior management meeting more frequently.
H4. Communication in defence manufacturing alliances decision making is
improved by middle management meeting in foreign partnerships more
frequently.
H5. Communication in defence manufacturing alliances is improved by operating
level supervisors in foreign partnerships meeting more frequently.

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Methodology
The principal problem with researching in the defence industry is the sensitive nature
of the data and the innate confidentiality of the organisations involved in the business.
Although restructuring has been occurring over the last ten years, the number of firms
involved in cross-border strategic alliances was not readily identifiable. Thus, while
the whole population is relatively small and can be identified, selecting a sample, all of
which were involved in alliances, was the immediate imperative. A large-scale survey
was used to collect data in the UK.
A pilot study was conducted to develop and test the questionnaire design using two
firms conveniently located. The pilot fieldwork was conducted with a goal of attaining
a fuller understanding of the practicality of the theory to this business and to reveal the
extent to which respondents working in the industry apply the theory.
In total, 150 firms (60 per cent) out of 250 replied, 76 firms were involved in
cross-border strategic alliances. The remaining 74 firms which replied to this
questionnaire indicated that they were either not involved in alliances at all or only had
experience of intra-border strategic alliances. Quantitative data analysis was
conducted with SPSS using t-tests to test for differences in means.
The survey listed questions in the following areas: number of personnel employed
by the firm, turnover, industry sector, number of partners involved, problems
experienced by the firms within the alliance, approaches to communication, degree of
communication between disciplines and frequency of communication between firms.
The structure of the questionnaire would take the form of close-ended questions
using Likert scales. Each envelope posted to the firms included a covering letter, a copy
of the letter of recommendation from the Defence Manufacturers Association, a copy of
the survey for completion and a pre-paid reply envelope. A total of 12 firms, were
involved in the qualitative data collection. Each executive was interviewed using a
semi-structured format. Each interview was tape-recorded and transcribed. The data
was then coded using vVivo software to identify patterns in the data.
The survey questions investigate the type of communication that exists between
partners. Respondents are asked whether they feel sufficient quality of communication,
is being forwarded by the partner and whether this detracts or supports the formation
of creative bonds of trust. The sub-sections in the questionnaire also ask whether the
quality of communication being forwarded is good for decision making.
They relate the quality of communication with the control of decision making. The
subsections also ask where the control of decision making lies and where frustration
can arise between partners and internally within firms. The survey questions the
relationship between technical decision makers and strategic management decision
makers within the firm. The objective of this approach is to link the degree of
communication at the different levels with the flow of communication and decision
making throughout the company. During the interviews, a semi-structured format was
used to collect data.
Discussion
The prevalent theme of the interview data on communication process is the difficulty
experienced between two parties from different backgrounds working as one team in a
highly technical area. The terms language and understanding are used to describe
communicative difficulties. The terms interpretation and translation are also found

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in the interview data. Communication was described in one interview as picking up the
telephone and ask them how theyre doing.
Further aspects outlined in the interviews included the need for caution at the initial
stages if the people involved in the discourse are inexperienced. There may be hidden
agendas. If the people cannot get behind these hidden agendas through
communication, then it is important to build in protection through control. There
can be problems with superiority and inferiority complexes, which affect
communication. Several respondents stressed that it is important to have skills in
interpreting conversation in order to understand what really makes them tick.
All respondents agree that English is the accepted international business language
within the industry. However, frustration can be caused by poor quality of English.
One obvious difference in communication styles was described by one interview as
follows:
The Anglo-Saxon countries tend to be more a written culture and they like to see things
written down in precise, neat English, whereas in the Middle and Far East: well, he said it and
thats what hes written and I trust it.

Confusion normally starts at the management level but permeates down to the
engineering level via the technical specifications. For example, one interviewee cited
the example of where:
. . . the guys been nice, hes written it in English for you, but his English isnt brilliant so they
say something like it should be resistant to false alarms, something like that. Well, do you
mean it shouldnt alarm when theres a false alarm or it shouldnt register a false alarm in the
first place?

The general consensus among the interviewees is that communication must also factor
in how people make decisions and there must be a willingness to allow them to go
through certain rituals. This in itself is a skill, i.e. recognising the cultural differences
and shaping communication skills accordingly. Mistranslation of documents,
misinterpretation of communication at meetings and the wrong calibration of
technical measurements across different countries are the greatest sources of
frustration and problems in the communication process.
This can lead to delays in decision making and progression of manufacturing
because one firm may need to re-check a specification or a production order.
The results of this research show that control of decision making is the most
frequent problem associated with strategic alliances in defence manufacturing and that
lack of communication is the second most frequent. In defence, when deliberating over
the issue of control of decision making however, defence firms are not only faced with
commercial decision-making processes such as the type of ownership structure, but
also security-driven processes such as the degree of integration of the partner firm
within the group, all of which affects lateral communication.
The size of the alliance in terms of the number of partners increases the number of
lateral communication channels. Table I summarises the number of partners involved
in the alliances. Table II summarises the types of partnerships. Table III shows the
results of the data collected from the sample. Table III shows the ranking of the main
problems associated with alliances for the sample. There are differences in the
decision-making processes between firms in the sample. Tables IV and V show that the

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data indicate that communication between non-management technical decision makers

and management decision makers can be of low quality or infrequent.
Table VI shows that communication quality, clarity, interpretation and translation
increases with an increase in frequency of meetings at top and middle levels of
management. The data, strongly supports, more frequent meetings between all levels
of management, and staff, in order to improve the quality (clarity, accuracy, translation
and interpretation). Where the communication process is slow in partners firms, the
decision making can be frustrating for firms, which want faster decisions made and
problems solved. The data indicate that in alliances with many partners (5 )
No. of partners

61
16
13
7
3

Table I.
Number of partners
involved in the samples
alliances

Type of partners

Manufacturer/supplier
Direct competitors
Non-competing firms

50
30
20

Variable

(%)

Rank

Control of decision making

Lack communication
Cultural differences

58
42
41

1
2
3

Co-eff.

Sig.

0.365

0.043 *

Variable

Co-eff.

Sig.

Strategy decisions are made without full

communication with technical decision makers

0.465

0.0008 *

Technical decisions are made without full

communication with strategy decision makers
Note: * Indicates a 0.05 level of significance

Note: * Indicates 0.01 level of significance

705

Per cent of sample

1
2
3
4
5

Variable

Internal and
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communication

Table II.
Types of partners
involved in the samples
alliances

Table III.
Main alliance problems of
defence firms sample

Table IV.
Decision making by
technical management
and number of partners

Table V.
Decision making by
strategy department and
number of partners

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increasing the frequency of meetings between senior management does not necessarily
increase the quality of communication.
The reason is that where there are many partners from different countries, there are
many more opportunities for mistranslation and misinterpretation. Documents must
be translated into five languages. All forms of communication must be translated into
five languages and meetings take longer to arrange.
All firms surveyed are members of the industry trade association. All firms have a
percentage of business in defence manufacturing. Of the samples, 20 per cent are
MNEs and 80 per cent are SMEs, and 60 per cent of the sample has a dependency on the
defence manufacturing industry of over 60 per cent.
All firms are involved in manufacturing. The firms manufacture large platforms
and components for land, air and sea defence systems including equipment for all
military services such as infantry. Two of the firms in the qualitative data collection
phase are MNEs. Eight of the firms are SMEs. The SMEs supplied components for
subsystems manufactured by the MNEs. These components included bespoke
components.
The evidence shows that there are significant findings that where an alliance has
multiple partners higher than two, the difficulties in control of communication increase.
With many more different channels of communication in a five member multinational
alliances than a two-member UK-non-UK alliance, managers and non-managers from
different firms at different levels of different firms may proceed in the process without
referral or approval.
Managers should use more human-centred communication and increase the
frequency of meeting partners. Technology should be used to boost the quality and
frequency of communication between multiple partners rather than lower it or be used
as a substitute for face-to-face meetings. Strategy formulation for the alliance product
should involve all managers and non-managers at all levels. The vision of the strategy
should be communicated to all levels. Technical details should be communicated to
managers operating in non-technical positions to ensure that all stakeholders obtain
greater clarity on the alliance manufacturing process.
Control of decision making is the most frequent problem occurring for the firms in
the sample. Most of the alliances are between manufacturers and suppliers. Most firms
are in alliances with only one other partner. The focus on control indicates that firms
are very cautious with regards to technology-transfer. This is not surprising.
Competitors are not the majority-target, for alliances in the sample but they are well
represented. The data indicate a strong desire to improve the supply chain
management. They also indicate a strong desire to collaborate on design and quality
Variable

Table VI.
Communication for
decision making in the
organisational structure
and number of partners

Communication is improved when senior management from all

partners in the alliance meet more frequently
Communication is improved when middle management from
partners in the alliance meet more frequently
Communication for decision making is improved when operating
level supervisors from all partners meet more frequently
Note: * Indicates a 0.05 level of significance

Co-eff.

Sig.

2 0.398

0.027 *

0.856

0.64

0.204

0.021 *

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with suppliers. Most alliances have only small number of partners. Large-scale projects
involving several countries will have at least one firm represented from each country
thus causing communication and co-ordination difficulties.
Overall, the closest agreement on the interpretation of communication within
defence alliances is discourse at top and medium levels of management for non-crucial
administration of the alliance or to ensure that a partner is always well informed. This
highlights two aspects of alliance lifecycles: the importance of middle management in
alliance processes and the importance places on continuous contact between the upper
echelons to foster good working and personal relationships.
Technical and strategic management appear to have more autonomy to make local
decisions in larger firms. Control of decision making extends beyond boardroom power
struggles between the senior management of partners in the strategic alliance. It
encompasses internal and external factors; autonomy from senior management,
interference from the parent firm, governmental processes, and shareholder demands.
Communication and control of decision making are interdependent.
Lack of communication is the second most frequent problem in foreign alliances in
defence manufacturing. The communication process in UK defence manufacturing
firms has undergone changes in tandem with changes in overall industry environment.
Communication is more team-oriented in UK firms. The management structures within
firms are now more programme-oriented with teams of executives possessing requisite
skills operating within each particular programme requiring communication and
decision making involving all departments represented in the team and on the
programme. The general problematic area with communication is one of confusion
being caused between partners. Confusion causes a time lag because if confusion
occurs, it takes time before it is recognised and the confusion and time lag generally
depend on the complexity of the project.
The communication process facilitates the adoption of international business
standards globally. There can be too much focus on control and this can lead to
problems in the alliance. Firms in alliances are concerned about control especially in a
highly sensitive industry utilizing high technology and characterized by high
technology transfers globally. A balance needs to be crafted between concern over
control and concern over lack of trust. Concern over control of decision making can be
assuaged through trust and confidence building.
Trust and confidence building can be increased through more frequent and better
quality communication. With less focus on control, both parties can focus on
strengthening the relationship and development of the product. With low quality and
infrequent communication, confusion, mistranslation and misinterpretation can set in
and lower levels of trust. Lowering levels of trust in turn places an emphasis back on
control of decision making.
Structured and regular communication is vital to the level of confidence between
partners in their ability to deliver on their respective ends of the alliance agreement.
Structured and regular communication, however, can be viewed in different ways for
every alliance. However, in an alliance with five partners from five different countries,
for example, increasing the frequency of meetings might however sometimes be more
detrimental as it takes a long time to organise and plan each meeting.
Technical decision makers also have more freedom in alliances with multiple
partners.

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Technical decisions in defence manufacturing are made without full communication

with strategy decision makers (H1 is supported Table IV). Strategy in defence
manufacturing is formulated without communication with technical decision makers
(H2 is supported Table V).
The old culture in which communication was conducted has been swept away.
Defence firms used to be guaranteed contracts from the government. Once the market
opened up in order to achieve more value for public money, defence manufacturers
came under competitive pressure to change. Under the old culture, communication was
operated in a public sector way. It was bureaucratic and slow. The major skills of
employees focused around the engineers and scientists. More management and
marketing skills are required for competing in the global market. This shift in balance
may cause some professional rivalry. There is autonomy between teams. However, the
global market is so competitive with new international competition emerging, greater
communication between strategic and technical decision makers should be a priority.
The organisational structure of the strategic alliance and the control of decision
making mechanisms in place strongly determines the nature and depth of
communication. Joint ventures keep teams apart from the parent firm. Collaboration
can bring teams from foreign firms into the centre of the parent firms operations (for
tours of manufacturing lines for example). The parent firm may not be as involved in
the communicative process in a joint venture as in a collaborative venture. Senior
executives, essentially, want to let alliance managers, strategic and technical, progress
with their work.
The preferred approach is to manage alliances at arms length with intervention
exercised only when a higher standard of clarity is required. Delays in communication
or lack of effort in facilitating requests for information contribute to the erosion of trust
between partners. Thus, if a partner is left feeling frustrated about communication, it
induces negative feelings about other aspects of the alliance. As firms form more and
more alliances globally (running into hundreds especially with suppliers), middle
management has to take greater roles in the communication process. It is important to
have both frequency of communication in some form as well as clarity and accuracy in
the quality of translation and interpretation.
The internal decision making process is kept team-orientated in larger firms with
decision-making autonomy in place for each team. Decision makers on technical and
strategic issues have autonomy from parent control of decision making without a
constant need to refer everything back up the chain. The greatest source of frustration
for UK executives is the procrastination laterally which is caused within the internal
decision-making process of partners. This detracts from swift horizontal decision
making on the project as a whole. A similar level of procrastination is not perceived (by
UK firms) to exist within UK firms. Executives do not want to refer to legal
terminology at irregular intervals throughout the lifecycle.
Communication between upper and lower levels of management needs to be improved
by increasing the numbers of meetings. The relationship between the number of partners
and improving communication is summarised in the table. Communication and decision
making in internal processes in the alliances studies are kept team-orientated in larger
firms with decision-making autonomy in place for each team. Decision makers on
technical and strategic issues have autonomy from parent control of decision making
without a constant need to refer everything back up a hierarchy.

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Communication in defence manufacturing alliances decision making is improved by

senior management in foreign partnerships meeting more frequently (H3 is supported).
Communication in defence manufacturing alliances decision making is improved by
middle management in foreign partnerships meeting more frequently (H4 is supported
Table VI).
Communication in defence manufacturing alliances is improved by operating level
supervisors in foreign partnerships meeting more frequently (H5 is supported). Senior
management meeting more frequently would greatly improve the quality of
communication and lower frustration.
Supervisory level communication would decrease misunderstanding over technical
specifications. The research findings recommend a return to human-centred
communication in the defence industry. The research supports more supervisory
operating level communication between partners supports.
Where the state has an ownership in the defence industry, internal communication
is more bureaucratic and slower. In some countries, lateral communication is slower
because of the national culture. Meetings with Arab executives are longer. Teams from
Arab countries, as well as countries such as France, communicate within a school of
etiquette demanding that members of their own team, especially the lead person, are
not embarrassed. This may happen by indicating something that was wrongly said or
technically wrong ( junior members speak out of line).
UK executives operating within a team orientated communication structure seek
open and honest communication with their partners. They have established this open
communication internally with the team and programme organisational structure.
They want it in lateral communication with foreign partners. This culture can seem
contrary to the conduct of communication in some countries.
The general problematic area with communication is one of confusion being caused
between partners. Confusion causes a time lag because if confusion occurs, it takes
time before it is recognised and the confusion and time lag generally depend on the
complexity of the project. Kitchen et al. (2002) referred to it as what gets said and
what gets done. Respondents explained that clarity is the most important element of
the communication process; an understanding reached between partners, where there
are no questions left unanswered, no matter how foolish, or lacking in knowledge,
someone thinks they may appear.
Trust is related to this process because partners do not worry about looking foolish
and feel confident to ask as many questions as are required to ensure that all parties
are totally confident in all aspects of the project. Meetings of senior management
outside of the office, in a social context, helps foster team spirit and builds trust. Delays
in communication or lack of effort in facilitating requests for information contribute to
the erosion of trust between partners. Thus, if a partner is left feeling frustrated about
communication, it induces negative feelings about other aspects of the alliance. This
will threaten the success of the alliance.
The small firms sampled approach communication less formally than the larger
firms. Small firms have shorter lines of communication and can, therefore, make
decisions affecting the alliance more quickly than large firms. The alliance mentor, be
they chief executive or a middle manager, does not have to refer decision making
through as many layers of authority in order to gain approval. Thus, the small firm can
react quickly when problems occur between partners.

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Personal relationships, and frequent communication at senior level are extremely

important. The communication, however, does not always have to involve larger
meetings in different countries. Trying to arrange this type of communication more
frequently for alliances with five or more partners does not always improve the quality
of communication. Alliances succeed if organisation members communicate freely in
every direction, both internally and externally, adapt well to structure and culture
changes; and avoid petty squabbles and power struggles.
Firms can control communication in decision making through the structure of the
alliance. Certain forms of alliance such as joint ventures can keep a project separate
from the main firm. Other structures such as collaboration can integrate teams from
different firms more closely. When alliances end successfully, repeated alliance
formation and development of personal relationships strengthens levels of trust and
communication. Thus, problems can be solved more quickly.
Future research
The communication internally in foreign partners is a source of major frustration for
UK alliance managers. These causes for this procrastination need to be investigated. Is
it cultural or operational? The effect of communicating more by ICTs instead of face to
face needs to be investigated. The degree of team-based communication along flatter
lines rather than traditional hierarchical lines in the foreign partners also needs further
research to be undertaken.
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Further reading
Adams, G. (1999), The necessity of transatlantic defence co-operation, Europes Defence
Industry: A Transatlantic Future, Centre for European Reform Publication, London.
Butler, C. (2006), UK-Asian strategic alliances in the defence manufacturing industry,
Asia-Europe Journal, 4 April, pp. 43-52.

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Edmonds, M. (1997), Defence Manufacturing Trends within Europe Swedens Potential in

Partnership and Co-operative Development, Centre for Defence and International Security
Studies, Lancaster University, Lancaster, Bailrigg Memorandum 31.
Karlof, B. (1994), Strategies for the emerging european market, Long Range Planning, Vol. 27
No. 2, pp. 36-44.
Kenny, B. (2006), European armaments collaboration and integration, Leadership and
Organisational Development Journal, Vol. 27 No. 6, pp. 484-500.
Lewis, J.D. (1990), Partnership for Profit Structuring and Managing Strategic Alliances, Collier
MacMillan Publishing, London.
Olkkonen, R. and Alajoutsijarvi, K. (2000), The role of communication, Business Relationships
and Networks in Management Decision, Vol. 38 No. 6, pp. 403-9.
Omar, T. and Kleiner, B. (1997), Effective decision making in the defence industry, aircraft
engineering and defence technology, Aircraft Engineering and Aerospace Technology,
Vol. 69 No. 2, pp. 151-9.
Smythe, J. (1996), The changing role of internal communications in tomorrows company,
Managing Services Quality, Vol. 6 No. 2, pp. 41-4.
Tas, T. (2004), Time span and risk of partner opportunism in strategic alliances, Management
of Managerial Pyschology, Vol. 19 No. 8.
About the author
Colin J. Butler is visiting professor at University of Greenwich, London, UK. Dr Butler began his
early career as a central banker and financial regulator having worked in the Central Bank of
Ireland before the international banking bailout and laissez-faire regulation. He holds a PhD in
strategy in international business, a masters in strategy and organization of the military and a
BSc in computer science with strategy and business. Colin delivered lectures and consultancy in
Abu Dhabi Chamber of Commerce for the UAE University MBA programme. Colin J. Butler can
be contacted at: colinkbutler@yahoo.ie

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