MGMT+650+-+Final+Exam+Question+9

These questions are seen as “make-or-break questions.” The interview participants advised companies to avoid the cross-border alliance if the potential partner answers “no” to any of the questions: § Can the partner deliver as required to make the alliance successful? § Can both partners agree on clear goals and objectives for the strategic alliance? § Have there been attempts to minimize potential for competition and friction with the partner? Does the potential partner have any alliances with your competitors? § Does the potential partner share with you a vision about how the cross-border strategic alliance might evolve? § Is the partner willing and able to contribute the necessary skills and resources to ensure that the alliance is successful? § Does the partner have a history of success with previous strategic alliances? § Have you compared the potential partner with other partners in the terms of value creation? § Does the cross-border alliance fit with your vision of your alliance network in the future?
 * Ch. 9 Provided by Dana **
 * Discuss some of the key questions multinationals need to ask when picking an alliance partner. Pick two of these questions and describe how answering these questions can help the alliance succeed. **

// Can both partners agree on clear goals and objectives for the strategic alliance? // Seek strategic complementarity: each partner should have a good understanding of the others strategic objectives for the venture. Each should know what the other hopes to achieve from the venture, both in the short and long term. It is not necessary for partners to have the same objectives, they may be complementary. For instance, if a US company has advanced technology attractive to a Chinese firm, and this Chinese firm dominates the Chinese market and could provide potential powerful sales and distribution outlet for a partner, these objectives are complementary. The US Company desires growth in the Chinese market share and the Chinese company desires access to the other side’s advanced technology. // Is the partner willing and able to contribute the necessary skills and resources to ensure that the alliance is successful? // Partners must be willing and able to provide the “right” level of mutual dependency. Companies must rely on each partner to contribute to the relationship – partners feel a mutual need to supply their unique resources or capabilities to the strategic alliance. Both partners see their contribution as critical to the success of the relationship and, ultimately, to the success of the strategic alliance. The best level of mutual dependency is balanced. With balanced dependency, both companies feel equally dependent on the outcome of the venture. Building safeguards into the strategic-alliance agreement is a method to guarantee balance is maintained. Safeguards might include types of “alimony” payments and restrictions on entering the same business over a specified period. The “alimony” payments would require payments to the partner if the relationship should break up before a specified period.

Submitted by Bill Question #9 Discuss some of the key questions multinationals need to ask when picking an alliance partner. Pick two of these questions and describe how answering his questions can help the alliance succeed. Picking an Alliance Partner (page 428) __** Picking an alliance partner can be a very difficult task. However, Jagersma, and extensive interviews with 106 chief executives of top managers from 89 global companies, suggest that multinational companies need to ask a number of questions about the potential partner. These questions are seen as the "make-or-break-questions." The review participants advised companies to avoid the cross-border alliance have the potential partner answers "no" to any of the questions: · Can the partner deliver what is required to make the alliance successful? · Can both partners agree on clear goals and objectives for the strategic alliance? · Have there been any attempts to minimize potential for competition and friction with the partner? Does the partner have any alliances with your competitors? · Does the potential partner share with you a vision about how the cross-border strategic alliance might evolve? · Is the partner willing and able to contribute the necessary skills and resources to ensure that the alliance is successful? · Does the partner have a history of success with previous strategic alliances? · Have you compared the potential partner with other partners in terms of value creation? · Does the cross-border alliance fee with your vision of your alliance network in the future? // //
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 * Does the potential partner share with you a vision about how the cross-border strategic alliance might evolve? Assess operating-policy differences with potential partners?** // Just as marriage partners need to work out how to squeeze the toothpaste, what to have dinner, and it makes the beds etc., potential partners in the strategic alliance most likely will have similar operational differences and how their companies are run on a day-to-day basis. Accounting policies, human resource management policies, financial policies, reporting policies, and so on, they all differ because of organizational or cultural differences. For example, potential European partners may want to close operations during certain holiday periods. Potential Japanese partners may want to strategic alliance to respect their age hierarchy of management. For the strategic alliance to function smoothly, and before the strategic alliance comes into operation, partners should agree on mutually satisfactory operational policies.
 * Can the partner deliver what is required to make the alliance successful?** Partners must contribute more than money to the venture. Each partner must contribute some skills or resources that complement those of the other partner. J. Michael Geringer asserts that technical complementary is most important. A typical complementary alliance, for example, occurs when one company (usually a foreign company) contributes technical skills and another company (usually the local company from the host country) contributes marketing skills. Another recommendation is to find partners with similar but not identical products or markets. This avoids the increased difficulties of working with direct competitors. //