Chapter 8

Question 1

Alliance

Answer 1

Alliance is a general term that can refer to any type of relationship between firms (can be long-term or short-term and formal or informal)

Question 2

Joint venture

Answer 2

A partnership between two or more firms involving equity stake by the partners and often results in creation of a new businesses

Question 3

Licensing

Answer 3

A contractural agreement whereby one organisation or individual obtains the rights to use proprietary technology or trademark of another organisation or individual

Question 4

Strategic alliance

Answer 4

A formal partnership between two or more companies that collaborate to achieve specific goals while remaining independent

Question 5

Capability complementation

Answer 5

Combining the capabilities and other resources of partner firms but not necessarily transferring those resources between partners

Question 6

Capability transfer

Answer 6

Exchange of capabilities across firms in such a manner that partners can internalise the capabilities and use them independently of the particular development project

Question 7

Contract manufacturing

Answer 7

When a firm contracts another firm to manufacture their products

Question 8

Governance

Answer 8

The act or process of exerting authority or control

Question 9

Alliance contracts

Answer 9

Legally binding contractual arrangement to ensure that partners are fully aware of their rights and obligations in the collaboration and have legal remedies available if a partner should violate the agreement

Question 10

Equity ownership

Answer 10

When each partner contributes capital and owns a specific right to a percentage of the proceeds from the alliancen

Question 11

Relational governance

Answer 11

Self-enforcing norms based on goodwill, trust and reputation of the partners

Question 12

Reasons a firm might choose to engage in solo development of a project

Answer 12

1. Availability of capabilities
2. Protecting proprietary technologies
3. Controlling technology development and use
4. Building and renewing capabilities

Question 13

Advantages of collaboration

Answer 13

1. Acquiring capabilities and resources quickly
2. Increasing flexibility
3. Learning from partners
4. Resource and risk pooling
5. Building a coalition around shared standard

Question 14

Common collaborations

Answer 14

1. Strategic alliance
2. Joint ventures
3. Licensing
4. Outsourcing
5. Collective research organisation