Strategic alliances : the role of central firm in governing strategic alliances between small and medium size companies : the case in the Icelandic fish industry

This research was conducted on two marketing companies, the Icelandic Freezing Plant Corporation (IFPC, established 1942) and the Union of Icelandic Fish Producers (UIFP, established 1932) in the Icelandic Fish Industry, established by producers to export and market their products. The main research question is "What is the role of the "central firm'" in strategic alliances involving large numbers of small and medium size enterprises"? The main emphasis is on studying the governance of vertical alliances with a high number of participants' companies. These two alliances have changed from being joint ventures owned by producers to market their products to becoming independent Limited Liability Companies on the public stock markets. The research is based on case study methods where each marketing company is taken as a separate case. Data was collected through various first and secondary data, such as interviews and archival sources. Conclusions where drawn from each case separately and then a mutual conclusion drawn from both cases. It is argued in the research findings that the role of the central firm in governing alliances with a high number of participants' companies should be threefold; a coordinator, a strategic leader and a creative environment for the participants' companies. Two types of administrative mechanisms were identified, that is, a formal mechanism based on centralisation and an informal mechanism based on direct communication. It is suggested that the informal mechanism is much more likely to shape a value creative environment for the participants' companies, while the formal mechanism was more economical in an environment where value creation was not required. In both cases, some mixture of these two mechanisms was used and in accordance with the demands of value creation. ' In this thesis the term "central firms" is used to refer to the company that has an intermediary role in strategic alliances and takes care of some joint activities for participants' companies.

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