Deck 7: Making Strategic Alliancee and Networks Work

Question 1

Strong ties are more beneficial to environments conductive for exploitation whereas weak ties are more suitable for exploration.

Answer 1

True

Question 2

The term "strategic networks" is derived from the term "social networks" highlighting the social aspects of interfirm relationships.

Answer 2

True

Question 3

In regards to strategic alliances and networks, in the traditional industry-based view, firms are dependent players.

Answer 3

False

Question 4

The ad hoc approach to organization allows firms to systematically learn from the experience.

Question 5

Weak ties excel at connecting with distant others who possess unique and novel information.

Question 6

A non-JV, equity-based alliance can be regarded as two firms "getting married," but not having "children."

Question 7

Successful alliances and networks normally avoid socially complex relations among partners.

Question 8

In international alliances, setting up a parallel and reciprocal relationship in the foreign partner's home country may decrease the incentives for both partners to cooperate.

Question 9

In finding organizational partners, it is desirable to identify candidates that present both strategic fit and organizational fit.

Question 10

A firm would prefer equity relationships if it fears that its intellectual property may be expropriated by partners.

Question 11

Since firms act to enhance or protect their legitimacy, copying other reputable organizations is not a way to gain legitimacy.

Question 12

An increase in the experience of one partner may bring instability into the relationship as it reduces the need to rely on the other partner.

Question 13

Firms with a high degree of network centrality are likely to be more attractive partners.

Question 14

As each firm is likely to have multiple interfirm relationships, it is important to not manage the relationships as a corporate portfolio.

Question 15

From the view of industry structure, in oligopolistic industries, there are an above average number of available players as potential partners.

Question 16

The more tacit the resources and capabilities are, the less likely firms will prefer equity involvement in establishing relationships.

Question 17

From the perspective of network position, firms located in the center of interfirm networks accumulate less power and influence.

Question 18

Examples of equity-based alliances include strategic investment.

Question 19

Possible ways to minimize the threat of opportunism include swapping critical skills and technologies through credible commitments.

Question 20

Higher level shared technology is associated with lower profitability for parent firms.

Question 21

A lower level of ____contribution may indicate a firm's relative lack of commitment:
a. Equity
b. Learning and experience
c. Nationality
d. Relational capabilities
e. All of the above

Question 22

In measuring the performance of strategic alliances and networks, subjective measures include:
a. Market performance.
b. Stability.
c. A and B above.
d. The level of managers' satisfaction.
e. Longevity.

Question 23

Institution-based considerations regarding organization include:
a. Collusion concerns.
b. Entry requirements.
c. The social pressures to find partners.
d. The internalized beliefs in the value of collaboration.
e. All of the above.

Question 24

The strategic choice concerning whether to form cooperative interfirm relationships or to rely on pure market transactions or M&As to grow the firm is part of:
a. Stage One.
b. Stage Two.
c. Stage Three.
d. Stage Four.
e. Stage Five.

Question 25

Which of the following are not true regarding managers involved in alliances and networks?
a. They require relationship skills which foster trust with partners.
b. They must guard against opportunism.
c. They must recognize that interests of the firms fully overlap.
d. They have to represent the interests of their respective firms.
e. They must attempt to make the complex relationship work.

Question 26

Cooperation between rivals is usually suspected of being:
a. Tacit collusion.
b. Explicit collusion.
c. Socialism.
d. All of the above.
e. None of the above.

Question 27

Which is not an advantage of strategic alliances and networks?
a. Reduce costs, risks and uncertainties.
b. Costs of negotiation and coordination.
c. Gain access to complementary assets and capabilities.
d. Opportunities to learn from partners.
e. Possibilities to use alliances and networks as real options.

Question 28

Strategic alliances involve:
a. Voluntary agreements between firms.
b. Compromises between short-term transactions and long-term solutions.
c. Contracts.
d. Equity-based arrangements.
e. All of the above.

Question 29

Contractual alliances include all of the following except:
a. Co-marketing.
b. Research and development R&D) contracts.
c. Cross-shareholding.
d. Turnkey projects.
e. Licensing/franchising.

Question 30

Strategic fit refers to whether the partner firm possesses:
a. Technology.
b. Capital.
c. Distribution channels.
d. A through C above.
e. Goals, experiences, and behaviors that facilitate cooperation.

Question 31

A joint venture can be described as:
a. A special case of equity-based alliance.
b. A new legally independent entity.
c. A "corporate child" given birth by two or more) parent firms.
d. All of the above.
e. None of the above.

Question 32

Which if any) of the following will not influence the performance of alliances and networks?
a. Equity.
b. Learning and experience.
c. Nationality.
d. Relational capabilities.
e. All can have an influence.

Question 33

In comparing M&As with alliances and networks, which of the following is not correct?
a. M&As are costly.
b. M&As have significant transaction costs.
c. Many M&As end up destroying value.
d. Alliances and networks preclude future upgrading into possible M&As.
e. Alliances and networks can be considered as a flexible intermediate solution.

Question 34

Which if any) of the following are not involved in the stages of forming business relationships?
a. The decision to cooperate.
b. The decision to not cooperate.
c. The choice of contract or equity.
d. Positioning the Relationship.
e. All of the above are involved.

Question 35

As a type of relationship tie, exploitation refers to such things as:
a. Selfishness.
b. Choice.
c. Efficiency.
d. Execution.
e. B through D above.

Question 36

Which represents an alliance with suppliers?
a. Horizontal alliances.
b. Upstream vertical.
c. Downstream vertical.
d. All of the above.
e. None of the above.

Question 37

The first concern in determining whether a relationship should be based on contract or equity is:
a. The kind of resources and capabilities that are shared.
b. Direct monitoring and control.
c. Real options.
d. Institutional constraints.
e. None of the above.

Question 38

Weak ties in organizational relationships:
a. Are more trustworthy and are cultivated over a long period of time.
b. Are associated with exchanging finer-grained information.
c. Provide an informal, social control mechanism.
d. A through C above.
e. Are less costly to maintain.

Question 39

The stock market responds favorably to alliance activities, but only under which circumstances?
a. Complementary resources.
b. Previous alliance experience.
c. Ability to manage the host country's political risk.
d. Partner buyouts.
e. All of the above.

Question 40

Emerging trends concerning formal government policies on entry mode requirements include:
a. More liberal policies.
b. Imposing considerable requirements.
c. A and B above.
d. Welcoming wholly owned subsidiaries.
e. Banning joint ventures.

Question 41

A friend of yours stated: "I would never want to be dependent on an alliance. I prefer an acquisition so that everything would be under my control." How would you respond?

Question 42

Why and how might a "real option" be useful in a joint venture?

Question 43

What can be done to maintain a successful alliance among global firms?

Question 44

What are the limitations in trying to clearly identify rights and expectations for alliances and acquisitions among global corporations?

Question 45

How can an organizational alliance be "win-win?" How can the concept of "cooperative specialization" help?