geb18 - REVIEW QUESTION ANSWERS, CHAPTER 12 1. List several...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
REVIEW QUESTION ANSWERS, CHAPTER 12 1. List several examples of contractual alliances and several examples of equity-based alliances. Contractual (nonequity-based) alliances include co-marketing, research and development (R&D) contracts, turnkey projects, strategic suppliers, strategic distributors; Equity-based alliances include strategic investment (one partner invests in another) and cross-shareholding (both partners invest in each other). In regards to the examples, the important thing is not so much the answer as the extent to which the student demonstrates thought in providing the answer. 2. Are mergers or acquisitions more common? Why? Acquisitions dominate the scene. Usually acquisitions can be completed with greater speed and less complications. 3. In what two primary areas do formal institutions affect alliances? Briefly explain the two areas. The impact of these formal institutions can be found along two dimensions: (1) antitrust concerns and (2) entry mode requirements. First, many firms establish alliances with competitors. Because integration within alliances is usually not as tight as acquisitions (which would eliminate one competitor), antitrust authorities have a higher likelihood of approving alliances than acquisitions. Second, formal institutions affect alliances and acquisitions through formal requirements on market entry modes. In many countries, governments discourage or ban acquisitions to establish wholly owned subsidiaries. 4. Describe at least one norm (or collective assumption) and how it would affect a firm’s perspective on creating an alliance. The first set of informal institutions centers on collective norms supported by a normative pillar. A core idea of the institution-based view is that because firms act to enhance or protect their legitimacy, copying what other reputable organizations are doing—even without knowing the direct performance benefits of doing so—may be a low-cost way to gain legitimacy. Therefore, when competitors are setting up alliances, jumping on the alliance bandwagon may be cool as opposed to ignoring industry trends. 5.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/25/2011 for the course GEB 3373 taught by Professor Crum during the Spring '10 term at University of Florida.

Page1 / 3

geb18 - REVIEW QUESTION ANSWERS, CHAPTER 12 1. List several...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online