Strategic Management Chapter 9

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strategic alliance
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in the partner selection and alliance formation step to management of alliances, what must happen?expected benefits must exceed costs partner compatibility: cultural fit btw. 2 firms partner commitment: firms are willing to make available necessary resources and to accept short term sacrifices to ensure long term gainsin the Alliance Design and Governance step to management of alliances, what are the formal governance mechanisms? what is necessary in this step?non-equity, equity, JV; "inter-organizational trust" is necessary since all contracts are necessarily incompleteto succeed in the Post-Formation Alliance step to management of alliances, what must the partnership create?VRIO resource combinations: - make relationship specific investments - establish knowledge-sharing routines - build interfirm trust And build capabilities through repeated experience over timewhen 2 companies merge, what happens?two independent companies join to create a combined entity, usually friendlywhat happens in an acquisition?purchase of one company by another, can be either friendly or hostilewhat are the benefits to M&A? (5)reduces competition, increases differentiation, lowers costs, faster access to markets, new capabilitieswhat are the drawbacks to M&A? (4)clash of cultures, lack of realized synergies, greater inefficiencies, job losses