Deck 6: Engaging in Cross-Border Collaboration: Managing across Corporate Boundaries

Question 1

Alliances are the only feasible way to develop a position in multiple countries and regions.

Answer 1

False
While alliances provide many advantages,especially in entering new markets,there are strengths and weaknesses associated with every type of collaboration as well as non-collaborative forms.As such,companies should always consider different alternatives and choose the one that best fits their specific situation.

Question 2

Equality between partners is essential,regardless of the governance structure.

Answer 2

False
Committees consisting of an equal number of participants from both companies and operating under strict norms of equality are often incapable of providing clear direction or resolving conflict at lower levels.To find their way around such problems,partners must negotiate on the basis of "integrative" rather than "distributive" equality,with each company taking responsibility for different tasks.

Question 3

Strategic alliances with customers are a form of collaboration that enable MNEs to increase their bargaining power and reduce their costs.

Answer 3

False
Building partnerships with customers can bolster the customer's competitive position,and at the same time,leverages the competitiveness and innovative capabilities of the MNE.It does not necessarily increase bargaining power or reduce costs.

Question 4

Interface managers should be well acquainted with the company's internal organizational processes and should have access to key managers in different parts of the organization.

Question 5

In industries in which there is a dominant worldwide market leader,joint ventures,strategic alliances,and networks allow coalitions of smaller partners to compete more effectively against a global "common enemy" rather than one another.

Question 6

Cross-border collaborations have become increasingly important.While the size of an MNE's corporate allies is extremely important to the MNE's performance,the quality of its corporate allies is only marginally important to the MNE's performance.

Question 7

Strategic alliances are only forged for long durations.Firms should not enter collaborative agreements with a short-term horizon.

Question 8

Entering collaborative relationships with other firms is one way for firms to meet the needs of an increasingly complex environment.

Question 9

Pre-alliance analysis is sufficient to ensure the success of a collaborative agreement.

Question 10

Which of the following is not a benefit of a strategic alliance?

A) Firms can transfer their technologies to new markets and increase their revenues from licensing fees.
B) Firms can transfer employees to other organizations to reduce operating costs and acquire new knowledge through the employees they transfer.
C) Firms can gain access to new markets for existing products and learn important new skills from the partner.
D) Firms can share costs and develop new technologies together without being fully integrated.

Question 11

The risks associated with collaboration are limited to the inability of both firms to agree on the terms of the partnership.

Question 12

Collaboration reduces the time and risk associated with the development of new products.

Question 13

International joint ventures continue to be a primary means to enter foreign markets.

Question 14

Partners should be selected on the basis of comfort rather than competence.

Question 15

A vast majority of successful cross-border collaborations are founded and maintained by firms that acquire the other partner's knowledge without sharing their own knowledge.

Question 16

Once an alliance is formed,the goals,tasks and management processes of the alliance must be constantly monitored and adapted to changing conditions.

Question 17

While the investment and growth benefits associated with partnering generally yield substantial benefit to smaller firms that are pursuing rapid growth with limited resources,these benefits diminish with size such that the very largest MNEs generally find that the benefits of "going it alone" exceed the costs associated with partnering.

Question 18

Formulating an agreement with respect to the termination of the venture at the outset of the collaboration demonstrates that the partners are not fully dedicated to the success of the alliance.

Question 19

Equity joint ventures are the preferred mode of arranging an alliance and should be employed whenever multiple companies are intending to collaborate.

Question 20

The objectives of an alliance are more difficult to achieve when there is a greater number of joint activities,equity cross-holdings and cross-functional coordination.

Question 21

Alliances that are more complex require:

A) More management attention to succeed and tend to be more difficult to manage
B) Less management attention to succeed and tend to be less difficult to manage
C) More management attention to succeed and tend to be less difficult to manage
D) Less management attention to succeed and tend to be more difficult to manage

Question 22

When the alliance's tasks are characterized by extensive functional interdependencies

A) it is preferable to have a dominant partner that can assume the functional tasks.
B) it is preferable to merge both companies.
C) the development of clear operating rules is the only way to maintain boundaries between the functions.
D) the creation of a separate entity is the most effective way to manage the linkages between the various functions.

Question 23

Sunny is the CEO of a large corporation that wants to enter a partnership with another organization.What should Sunny consider when choosing his partner?

Question 24

An effective interface manager is someone who

A) is very competent in the dominant functional area of the venture.
B) has a good understanding of the strategy of the firm and can advise the other partner of this strategy.
C) can influence the goals and objectives of the alliance for the benefit of his/her organization.
D) is the best user of the information / knowledge and can diffuse it to the right people within the organization.

Question 25

The negotiation of an integrative equality agreement implies that each committee in the alliance is structured with clear:

A) co-shared leadership, but each company takes responsibility for different tasks.
B) single-handed leadership, but tasks are developed internally within the joint venture.
C) single-handed leadership, but each company takes responsibility for different tasks.
D) co-shared leadership, but tasks are developed internally within the joint venture.

Question 26

Parent companies assume an important role on the joint venture or alliance's board.Which of the following is not among the pivotal responsibilities of the board's members?

A) Reviewing performance.
B) Ensuring that employment practices do not impinge on cultural norms.
C) Overseeing capital allocation decisions.
D) Monitoring risk management practices and policies.

Question 27

Robert is an operating manager for a large organization.Robert's organization will be engaging in a joint venture.He has been assigned the responsibility of overseeing his firm's participation in the joint venture.As such,Robert's supervisor has asked him to participate in the negotiation process.Even if Robert is not familiar with the negotiations,his presence at this stage is essential to

A) ensure that the definition and understanding of the alliance's goals are clear and consistent
B) give the joint venture partner an opportunity to accept or reject Robert's leadership of his firm's participation in the partnership.
C) communicate Robert's extensive familiarity with his own firm to the joint venture partner.
D) make him feel important and test his capacity to operate in a stressful situation.

Question 28

Flexibility is often the key in a strategic alliance.Please comment.

Question 29

Managing knowledge flow is important for a firm that wants to get the most from its partnership with another company.What can a firm do to ensure it gets the most from its collaboration while preventing the outflow of information they do not wish to share with their alliance partner?

Question 30

Most stable alliances often involve

A) two partners that are both motivated to acquire each other's knowledge.
B) two partners that are each satisfied with access to, rather than the acquisition of, each other's knowledge.
C) two partners providing resources that are significantly different.
D) one partner that is strong enough to dominate the other partner.

Question 31

Alexa is the CEO of a large corporation that wants to partner with a competitor to develop a new technology.Explain the potential risks that Alexa's company may encounter by collaborating with a rival.

Question 32

Oil & Gas Limited and Small Tech Inc.announced an agreement to develop a new technology for the extraction of gas.Oil & Gas Limited will contribute financial resources and its expertise in gas extraction,while Small Tech will provide its expertise in R&D.To ensure the success of the collaboration,prior to the alliance,both companies should

A) approach prospective clients to get their perspective on the agreement and ensure that there is a market for the new technology they want to develop.
B) verify the prospective partner's capabilities and assess its strengths and weaknesses.
C) adopt a code of conduct that will clarify the responsibilities of each partner and the ethical behavior that will be expected of each partner.
D) agree on the expected revenues and profit sharing.

Question 33

A car manufacturer and a multinational computer technology corporation intend to combine their strengths to develop intelligent sound systems for cars.Assuming that both companies will have a moderate to high level of interaction,what would be the most suitable form of alliance to adopt?

A) The firms should develop an R&D consortium, combining teams from both companies.
B) The firms should create an equity joint venture, combining assets from both companies.
C) The firms should create a licensing agreement to exploit the new application.
D) The firms should develop production facilities to be shared between the partners.

Question 34

In an alliance,the success of an integrative equality agreement requires

A) the delegation of authority to individuals chosen by both partners.
B) the dispersal of decision-making on select issues to at least one of the partners.
C) the development of a code of conduct for conflict resolution.
D) the selection of individuals that report to both alliance partners.

Question 35

Too much enthusiasm by those involved in alliance planning and negotiations can sometimes cause:

A) Realistic expectations and right choices
B) Unrealistic expectations and wrong choices
C) Unrealistic expectations and right choices
D) Realistic expectations and wrong choices.

Question 36

A firm is entering a strategic alliance and the CEO is worried about managing the firm's boundaries.What would you recommend to the firm and why?

Question 37

Which of the following can inhibit a firm's ability to learn from the alliance?

A) The interface manager is not the target user of the knowledge.
B) The firm does not have an information system to diffuse the knowledge acquired.
C) The firm does not share its knowledge with the other partner.
D) The alliance knowledge is not codified.