Chapter 7 Making Strategic Alliances and Networks Work

Global Strategy 1e Michael Peng Global Strategy Mike W Peng c h a p t e r 7 Copyright © 2014 Cengage Learning All Rights Reserved May not be scanned, copied or duplicated, or posted to a publicly acce.

Trang 2

be scanned, copied or duplicated, or posted to a publicly

accessible website, in whole or in part.

Outline

• Defining strategic alliances and networks

• A comprehensive model of strategic alliances and networks

• Formation

• Evolution

• Performance

• Debates and extensions

• The savvy strategist

Trang 3

Defining Strategic Alliances and

• Strategic networks are strategic alliances formed by

multiple firms to compete against other networks

and singular firms

Trang 4

The Variety of Strategic Alliances

• Strategic Alliances

 A compromise between short-term, pure

market transactions (e.g., spot transactions)

and long-term, pure organizational solutions

(e.g., mergers and acquisitions)

The Variety of Strategic Alliances

Mergers and Acquisitions (M&A)

Trang 6

A Comprehensive Model of

Strategic Alliances and Networks

• Industry-based considerations

 Traditional: Firms are independent players

 The dynamic of five forces:

 Horizontal alliances, entry barriers, upstream

alliances with suppliers, downstream vertical alliances with buyers, and alliances and networks

to provide substitute products/services

• Resource-based considerations

 The resource-based view is embodied in the VRIO framework, which are value, rarity,

imitability and organizational aspect of

strategic alliance and networks

Trang 8

Potential partner opportunism Risk of helping nurture

competitors (learning

race).

Trang 9

to observe and imitate firm- specific capabilities

Organization –

some successful alliances are organized in a way that is difficult to replicate

Trang 11

INFLUENCE OF INSTITUTIONS

Informal institutions

Normative pillar –firms copy other

reputable organizations to establish

legitimacy

Cognitive pillar – internalized, granted values that guide alliances and

taken-for-acquisitions

Trang 12

Strategic Alliances and Networks: Advantages and Disadvantages

• Strategic alliances and networks must create value

• Advantages must outweigh disadvantages

Table 7.1

ADVANTAGES DISADVANTAGES

Reduce costs, risks, and uncertainties Possibilities of choosing the wrong partners

Gain access to complementary assets and capabilities Costs of negotiation and coordination

Opportunities to learn from partners Possibilities of partner opportunism

Possibilities to use alliances networks as real options Risks of helping nurture competitors (learning race)

Trang 13

Formation

• Stage one: To cooperate or not to cooperate

• Stage two: Contract or equity?

• Stage three: Positioning the relationship

Trang 14

© M W Peng (www.mikepeng.com)

FORMATION OF ALLIANCES

Trang 15

Stage Two: Contract or Equity?

DRIVING FORCES EQUITY-BASED

ALLIANCES/NETWORKS

NON-EQUITY-BASED ALLIANCES/NETWORKS Nature of shared resources High Low

(degree of tacitness and complexity)

Importance of direct organizational High Low

monitoring and control

Potential as real options High (for possible upgrading to M&As) High (for possible upgrading to

equity-based relationships) Influence of formal institutions High (when required or encouraged by

regulations)

High (when required or encouraged by regulations)

Trang 16

Evolution

• Combating opportunism

 Need to protect against opportunism

 Contractual safeguards and credible commitment

• Evolving from strong ties to weak ties

 Strong ties are cultivated over a long period of time

 Weak ties are characterized by infrequent

interaction and low intimacy

 Firms have a combination of strong ties and weak ties

 Benefits of the different types of ties depend on the firms’ strategies

 Many interfirm relationships evolve from an

emphasis on strong ties to a focus on weak ties

Trang 17

Source: M Peng and O Shenkar (2002) Joint venture dissolution as corporate divorce Academy of

Management Executive, 16 (2): 95.

Evolution (cont)

Trang 18

Performance

• The performance of strategic alliances and networks

 A combination of objective and subjective

measures can be used to determine

performance

 Four factors may influence the performance of alliances and networks: equity, learning and experience, nationality, and relational

capabilities

• The performance of parent firms

Trang 19

Alliance- and Network-Related Performance Measures

ALLIANCE/NETWORK LEVEL PARENT FIRM LEVEL

 Financial performance (for example, profitability)  Financial performance (for example, profitability)

 Product market performance (for example, market share)  Product market performance (for example, market share)

 Stability and longevity  Stock market reaction

Table 7.4

Trang 20

Debates and Extensions

• Majority JVs as control mechanisms versus minority JVs as real options

• Alliances versus acquisitions

• Acquiring versus not acquiring alliance partners

Trang 21

Alliances versus Acquisitions

Trang 22

Improving the Odds for Alliance Success

Table 7.7

Source: Based on text in M W Peng & O Shenkar, 2002, Joint venture dissolution as

corporate divorce (pp 101–102), Academy of Management Executive, 16 (2): 92–105.

AREAS DO’S AND DON’TS

Contract versus “chemistry” No contract can cover all elements of the relationship Relying on a detailed contract does

not guarantee a successful relationship and it may indicate a lack of trust.

Warning signs Identify symptoms of frequent criticism, defensiveness (always blaming others for

problems), and stonewalling (withdrawal during a fight).

Investment in the relationship Like married individuals working hard to invigorate their ties, alliances require continuous

nurturing Once a party starts to waver, it is difficult to turn back.

Conflict resolution mechanisms “Good” married couples also fight Their secret weapon is to find mechanisms to avoid

unwarranted escalation of conflicts Managers need to handle conflicts-inevitable in any relationship-in a credible, responsible, and controlled fashion.

Trang 23

The Savvy Strategist

• New generation of strategists needs to be savvy at

both competition and cooperation—

Định dạng
Số trang	23
Dung lượng	1,55 MB