Strategic alliances are formal relationship between two or more parties that meet critical business needs while allowing organizations to retain their independence. While retaining their individual independence, firms gain access to specific resources, manufacturing capabilities, project funding, capital equipment, knowledge, expertise, and intellectual property. However, if these alliances are to succeed, they must have established means to track and measure organizational performance, this requires establishing negotiated key performance indicators that will improve open communication while reducing organizational friction.
             Key Performance Indicators in Alliances
             It is no secret that the world is becoming a global market place and that organizations that wish to remain competitive are forming strategic alliances. Described as a formal relationship between two or more parties, strategic alliances are meant to meet critical business needs while allowing both organizations to retain their independence (Brown & Brown, 2011). Moreover, In addition to retaining their individual independence, each firm now has access to specific resources, manufacturing capabilities, project funding, capital equipment, knowledge, expertise, and intellectual property. However, in order to effectively measure the performance of the alliance, there must be established key performance indicators (KPIs) that are measurable, easily tracked and easily communicated in a timely manner (Laurent, 2008).
             The Importance of Negotiating Key Performance Indicators
             Organizations that choose to partner, create a unique competitive advantage that is built on trust and commitment (Gibbs, 2009). Furthermore, once the alliance is established, it is hoped that each partner will learn from each other, thereby creating a benefits multiplier that is advantageous to both partners. Therefore it is essential that each organization negotiate KPIs that will attract custo...