Managing International Alliances: A conceptual framework

Question 1

What are the key issues in alliance management (7)

Answer 1

1. Logic of collaboration
2. Selecting partners
3. Structuring alliances
4. Building alliance networks
5. Alliance dynamics
6. Limits to alliances
7. The role of governments

Question 2

logic of collaboration

Answer 2

Identifying when, where, & why to collaborate

Question 3

selecting partners

Answer 3

Knowing how to maximize benefits & minimize risks of partnerships

Question 4

structuring alliances

Answer 4

Choosing organizational forms that provide incentives for success

Question 5

building alliance networks

Answer 5

Creating a system of reinforcing alliances, & avoiding chaos

Question 6

alliance dynamics

Answer 6

Managing with an eye to the forces for change in a relationship

Question 7

limits to alliances

Answer 7

Recognizing the constraints on collaborative strategies

Question 8

the role of governments

Answer 8

Understanding impacts of government policies & pressures

Question 9

what are the three kinds of strategic goals that typically drive a firm’s decision to collaborate with another firm?

Answer 9

1. Product exchange
2. Corporate Learning
3. Market Positioning

Question 10

T or F: the partners in an alliance must have the same strategic goal

Answer 10

False, they can differ and they often pursue more than of objective

Question 11

what do the benefits of an alliance typically revolve around?

Answer 11

acquisition of capabilities needed to compete successfully

• access to resources, know-how + experience, market presence, production capacity, ability to bear risk

Question 12

what are some costs of collaboration

Answer 12

• losing some control over strat decisions, use of tech, position in market, etc

Question 13

What are the three main alternatives to collaboration

Answer 13

1. Self-sufficiency (building needed capability internally)
2. Buying the inputs or skills (e.g. buying more engineers)
3. Full acquisition

Question 14

cross-border alliances offer a way to gain access not only to capabilities embedded in other firms, but also ____________________

Answer 14

those embedded in other country environments

Question 15

differences in capabilities ______________

Answer 15

create value

Question 16

similarities (in management perspective), help ____________________

Answer 16

minimize the costs of collaboration

Question 17

do international alliances experience extreme cases on the dimensions of maximizing benefits and minimizing costs of collaboration?

Answer 17

yes

Question 18

what are the two broad types of alliance structure?

Answer 18

contracts and equity relationships

Question 19

What are the two conditions that make jointly owned ventures advisable?

Answer 19

1. the firm needs the contribution of another firm
2. that contribution cannot be transferred effectively through a contract, and is best secured by giving the other firm an equity stake in the business

Question 20

What re the considerations for network design of an alliance network? (3 questions )

Answer 20

1. Is the whole greater than the sum of the parts?
2. Who controls the network?
3. Where is competitive advantage created?

Question 21

why might alliances change?

Answer 21

exogenous or endogenous pressures for change

Question 22

What are the key management concerns at each stage in the managing alliance process

Answer 22

1. Strategy formulation —> define logic of collab
2. Partner search –> match goals and capabilities
3. Negotiation —> allocate roles and design structure
4. Start-up —> invest and build trust
5. Operation —> contribute and receive capabilities
6. Adjustments —> monitor changes in environment and partners and renegotiate as needed

Question 23

What are the three broad groups of constraints to growth of alliance networks?

Answer 23

1. Organizational constraints
2. Strategic gridlock
3. Dependence

Question 24

What are organizational constraints?

Answer 24

• demands on management’s time
• difficulties in rationalizing operations

Question 25

strategic gridlock (external to the firm)

Answer 25

- limited availability of partners - competition among alliances

Question 26

dependence

Answer 26

- loss of control over company destiny - limited appropriability