If breaking up is hard to do, as the old song goes, why would anyone want to get together again after enduring the pain of parting?
It’s a question that Darcy Fudge Kamal, Ph.D., assistant professor, at the Argyros School of Business and Economics, is applying to the world of business. Kamal studies failed business alliances to see what sort of breakups leave enough trust intact so that companies are willing to partner up again down the road.
“Trust is an interesting question because it’s a gray space in relationships,” says Kamal, who teaches courses in strategic management and conducts research at the business school’s Economic Science Institute.
Business alliances, unlike mergers or acquisitions, are strategic relationships between generally two competing companies working together to share resources, know-how or technology. They are helpful in myriad fields, from winemaking to utilities, Kamal says. Her corporate experience in the telecommunications industry taught her that industries that share the same delivery systems or research and development often rely on alliances because “each owns a piece of the puzzle, but they can’t quite solve the problem unless the two of them cooperate.”
One of her main research projects looked at what factors contribute to partnering up again on a fresh project. It turns out business people tend to be forgiving if everyone agrees that unpredictable forces, like an earthquake that shut down supply chains or an out-of-the-blue market shift, was the biggest snafu.
To an extent they’re also willing to pardon inexperience. For example, a first-time effort at accomplishing a particularly complex task – FDA approval, for example – can trip up anyone. “It’s an excuse that works once,” she says.
An arena that rarely comes under the academic microscope has also caught Kamal’s attention. Kamal grew up around race horses – her father is an award-winning breeder in Canada – and knows well that shared ownership of race horses is typical. But no one had studied those relationships as alliances or from a management perspective, she says. Thanks to precise ownership and auction records kept by a group of Irish horse agents, Kamal has also been able to study those types of alliances.
Kamal uses the Southern California horse racing industry to introduce her students to the challenge of analyzing the unique problems faced by that business. Naturally, they spend a day at the races. But then it’s back to class to develop ideas to help the industry be more profitable at a time when competition for entertainment and gaming dollars is fierce.
“When we get into the technology and corporate strategy of the horse industry, so much of the conversation involves strategic alliances,” she says. “My research helps fill in the gaps there.”