Case Study of Building Relational Capital

Abstract

Case Study of Building Relational Capital

in a Transcultural Strategic Alliance

By

Monty G. Miller

October 1999

This is an exploratory case study for how Appreciative Inquiry, a large-scale change philosophy, aids the development of relational capital in a transcultural strategic business alliance. Relational capital is defined as the goodwill and trust that partners accumulate in a relationship as they gain mutual confidence (Kale, 1998). Two Alliance Building interventions--an Appreciative Inquiry and a Management Education session using a minimum of Appreciative Inquiry--were conducted with employees from a family-owned Indian company and a U.S.-based multinational biotechnology company.

The study used interviews to determine the focus of the interventions. Questionnaires were used before and after the interventions, and a follow-up questionnaire was conducted four months after the interventions to determine how participants perceived their progress.

Significantly greater levels (p>.95) of relationships and collaboration resulted from the Appreciative Inquiry intervention as compared to the Management Education intervention. Participants of both interventions reported growth in their understanding of the partner’s business and their leadership’s expectations for the Alliance. There was also some increase in trust in both interventions. However, neither the levels of understanding nor trust were statistically different when comparing the two interventions.

This study shows how the design of the intervention effected participant ownership of action plans and outcomes. The participants of the Appreciative Inquiry intervention co-constructed plans and goals which resulted in more progress toward goals than the people who participated in the Management Education intervention.

Gleaned from this case study are five keys to successfully implementing a transcultural strategic alliances. The keys are: 1) Create a shared direction, understanding, and vision for the Alliance. 2) Establish project agreements, expectations, and goals, as well as frequent reviews of progress. 3) Define accountable roles and responsibilities based on competencies (partner and individual levels). 4) Appreciate and respect diversity of ways of thinking and working. 5) Build relationships and community, communicate frequently, deal with conflict, and celebrate accomplishments.

Finally, this study provides sample interventions for conducting Alliance building sessions using the most productive activities from the Appreciative Inquiry and Management Education sessions. Conclusion, interventions using the Appreciative Inquiry Philosophy promoted the building of relational capital in this transcultural strategic alliance.