Joint ventures, mergers and other forms oforganizational alliances are rapidly becoming a businessnecessity. However, on an almost daily basis, experiencesuggests that such alliances often pose critical dilemmas for those entering into them. Centralamong these are collaborating across differences inorganizational cultures and forging a new organizationalidentity. At a deeper level, there are also often paranoid concerns and fantasies about thelong-term lack of equity in the transfer of knowledgeand capability. This paper, therefore, outlines asystems psychodynamic perspective on intergroup andinterorganizational relationships for developing an in-depthunderstanding of some common irrational and emotionaldifficulties alliance relationships face. It then goeson to describe an illustrative case and concludes with an appraisal of the advantages of a systemspsychodynamic conceptual perspective — taking bothstructure and process into account — which hasbeen neglected or minimized in the literature onorganizational alliances.