What are some of the challenges associated with managing alliances? How do host governments affect these?

One of the biggest challenges in managing alliances is the cultural dimension. Differences in culture can cause huge issues in alliances, and also in working with foreign partners. Cultural differences can cause misinterpretation, lack of valuable communication and also confusion in the partnership. Differences in the cultural dimension have plagued alliances for years, and should be looked at carefully before a MNC ventures into one. One partner may have high uncertainty avoidance while another may have low uncertainty avoidance. This definitely impacts the way management deals with certain situations, and can become a tug-of-war.
Host governments have a substantial role in how and when alliances are formed and also terminated. Many host governments require alliance, and can even affect dissolution of the alliance by making it difficult for the partner to sell their share. They can also block repatriation of the foreign partner’s investments in the alliance. This is why it is so important for MNC’s to do extensive research, and understand the risk level before joining into an alliance.

Cultural differences can be a huge deal breaker. Like you said, it can cause misinterpretation. Misinterpretation can change situations quickly and make other countries think differently of the company. It can simply be a logo or slogan than is interpreted differently in the host country.
Some of the challenges associated with managing alliances are fundamental challenges and differences in cultural background of partners. A fundamental challenge is managing operations with partners from different national cultures. Cultural differences can lead to misunderstandings and dissolution of the venture. Host government affect these by being unwilling to permit the alliance to