Deck 9: International Strategic Alliances: Management and Design

Question 1

The elephant-and-the-ant complex refers to

A) Difficulties that come with two different size organizations in a strategic alliance.
B) Problems that arise when one side feels inferior to the other.
C) Strategic alliances between developed and developing countries.
D) An unbalanced management structure.

Answer 1

A

Question 2

The best level of dependency recommended for a strategic alliance is

A) Balanced.
B) Home country dominated.
C) Host country dominated.
D) It does not matter if there are more than two companies.

Answer 2

A

Question 3

Suggested ways to build and sustain commitment in strategic alliances include

A) Go slowly.
B) Be the dominant partner.
C) Keep your goals secret so your partner does not get nervous about your intentions.
D) Use extensive written documentation.

Answer 3

A

Question 4

Which management structure is popular in developing countries?

A) Dominant
B) Shared
C) Split
D) Rotating

Question 5

When partners share strategic decision making but make decisions independently at the functional level (e.g.,marketing,production),they are using which of the following management structures?

A) Dominant partner
B) Independent management structure
C) Rotating management
D) Split-control management structure

Question 6

All of the following are typically part of a negotiated joint venture agreement EXCEPT

A) Management loyalty.
B) Equity contributions.
C) Provisions for dissolving the IJV.
D) Contracts for the IJV.

Question 7

In the independent control management structure

A) Strategic alliance managers have nearly complete autonomy for operational decisions.
B) Partners act independently of each other except when necessary.
C) Partners focus only on their special areas of expertise.
D) None of the above

Question 8

The anchor partner in a strategic alliance refers to

A) A partner that is very stable and anchors the relationship.
B) The strongest partner in the relationship.
C) The partner who initiates the relationship.
D) A partner that fails to deliver their share of funding.

Question 9

According to the text,all of the following are true about strategic alliances EXCEPT

A) They are inherently unstable and provide significant management challenges.
B) Estimates of failure rates range from 30 to 60 percent.
C) They are among the most popular choice to go international.
D) They are used mostly as a means to share technology.

Question 10

There are several issues to consider in picking a partner for a strategic alliance.One of these is

A) Go for the biggest partner possible because they have the most assets.
B) Seek strategic complementarity.
C) Make sure your partner will be dependent on you and not vice versa.
D) All of the above

Question 11

When applied to a strategic alliance relationship,the concept of trust includes

A) Confidence that the partner will deliver.
B) Confidence that the partner will behave with good will.
C) Confidence that the partner will engage in fair exchange.
D) All of the above

Question 12

The most important decision in setting up a strategic alliance is usually about

A) Working out the proportions of ownership.
B) Decision on the proper management structure.
C) Developing a detailed contract.
D) Selecting the right partner.

Question 13

Strategic alliance partners prefer a dominant management structure

A) If partners have similar technologies or know-how and they contribute this knowledge equally to the alliance.
B) If partners have different technologies or know-how and they contribute this knowledge equally to the alliance.
C) If partners have different technologies or know-how and they contribute this knowledge differently to the alliance.
D) If the alliance has more strategic importance to one partner.

Question 14

Equity in a strategic alliance implies

A) Labor skills.
B) Ownership.
C) Domination.
D) None of the above

Question 15

In the split control management structure

A) Companies share all decision making.
B) Managers of the strategic alliance split from and act independently from their parent companies.
C) Partners divide decision making control by functional areas.
D) Each company takes a turn providing the operational managers.

Question 16

If partners have similar technologies or know-how and they contribute this knowledge equally to the alliance,they prefer

A) A shared management structure.
B) A split management structure.
C) A dominant management structure.
D) A rotating management structure.

Question 17

As their management team gains more expertise,mature joint ventures move to what type of structure?

A) Independent
B) Interdependent
C) Local partner dominance
D) Shared

Question 18

An agreement not legally binding between companies to cooperate on any value-chain activity is a (an)

A) Formal international cooperative alliance.
B) International joint venture.
C) Informal international joint venture.
D) International cooperative alliance.

Question 19

When a large number of companies form a joint venture,the international joint venture is a

A) Multi-partner joint venture.
B) Consortium.
C) Informal cooperative alliance.
D) Equity joint venture.

Question 20

In operations alliances,multinational companies

A) Use research and development to merge different technical skills.
B) Share the risk of developing new or costly technology.
C) Gain access to new markets.
D) Combine manufacturing to reach a profitable volume of activity.

Question 21

According to the text,which of the following is NOT a key criterion used in picking an alliance partner?

A) Pick a partner who provides strategic complementarity.
B) Pick a partner who provides financial security.
C) Pick a partner who has complementary skills.
D) Pick a partner who provides the right level of mutual dependency.

Question 22

The best method of assessing strategic alliance performance is

A) Total sales revenue.
B) ROI.
C) ROA.
D) There is no one best method.

Question 23

Understanding a new market and developing a new technology may be used as performance criteria for which of the following?

A) Organizational learning
B) Management processes
C) Competitive advantage
D) Commitment

Question 24

In strategic alliance relationships,high levels of trust often

A) Retard organizational functioning due to excessive emotional reactions.
B) Cause excessive loyalty to the strategic alliance.
C) Are irrelevant if the strategic alliance is projected to have a high financial return.
D) Facilitate the exchange of tacit knowledge.

Question 25

Which of the following describes the situation where companies stay in a strategic alliance despite strong evidence that the alliance won't work?

A) Calculative commitment
B) Credibility commitment
C) Attitudinal commitment
D) Escalation of commitment

Question 26

Trust in strategic alliance relationships

A) Usually builds in cycles.
B) Either exists at the beginning of the relationship or will never be there.
C) Can really only evolve with partners from similar cultures.
D) Can never exist in high technology relationships since the risk of losing the technology is too great.

Question 27

The psychological identification with a relationship in a strategic alliance and the pride of association with the partner and the alliance is known as

A) Calculative commitment.
B) Credibility trust.
C) Benevolent trust.
D) Attitudinal commitment.

Question 28

The confidence that a strategic alliance partner has the intent and ability to meet their obligations and make their promised contribution to a strategic alliance is known as

A) Credibility trust.
B) Benevolent trust.
C) Calculative trust.
D) Attitudinal trust.

Question 29

Indirect strategic benefits for entering a strategic alliance include

A) Immediate improved performance on profit ratios.
B) Learning a new market.
C) Developing management loyalty.
D) None of the above

Question 30

__________ means that companies rely on each other to contribute to the relationship.

A) Shared management
B) Balanced management
C) The norm of reciprocity
D) Mutual dependency

Question 31

According to the text,which of the following DOES NOT represent a form of strategic alliance?

A) Informal cooperative alliances
B) Formal cooperative alliances
C) International joint ventures
D) Informal partnerships

Question 32

Contracts for strategic alliances may include _____________ if the relationship dissolves before the negotiated time.

A) Penalties for early termination of the contract by each side
B) Restrictions on future business growth
C) A promise to try future joint ventures
D) All of the above

Question 33

The confidence that the partner will behave with goodwill and trust is

A) Commitment.
B) Credibility trust.
C) Benevolent trust.
D) Calculative commitment.

Question 34

If strategic alliance partners have different technologies or know-how and they contribute this knowledge equally,they often prefer

A) Shared management structure.
B) Dominant management structure.
C) Split management structure.
D) Rotating management structure.

Question 35

Which of the following type of strategic alliances allows the multinational to combine manufacturing or assembly activities to achieve a profitable volume of activity?

A) Operations alliances
B) Output alliances
C) Upstream-downstream alliances
D) Marketing alliances

Question 36

The confidence that a partner has the intent and ability to meet its obligations and make its promised contribution to the strategic alliance is known as

A) Calculative trust.
B) Calculative commitment.
C) Credibility trust.
D) Benevolent trust.

Question 37

All of the following are true about international joint venture (IJV)EXCEPT

A) An IJV is a separate legal entity owned by parent companies from different countries.
B) IJVs can have more than two partners.
C) IJVs require that companies have equal ownership to form the venture.
D) IJVs require legal contracts that bind partners.

Question 38

Which of the following statements regarding international joint ventures is FALSE?

A) International joint ventures usually have two or more partners.
B) International joint ventures are usually not legally binding.
C) International joint ventures with a large number of partners are known as consortiums.
D) Companies do not need equal ownership to form an international joint venture.

Question 39

Strategic complementarity in a strategic alliance means that

A) Both sides must have similar strategic objectives for the strategic alliance to succeed.
B) Objectives can be different if they are not in conflict.
C) Cultural differences must be dealt with first.
D) Parent companies must leave the strategic alliance management to develop their own strategic goals.

Question 40

In dealing with cross-cultural communication in a strategic alliance,managers should expect

A) Communication difficulties to disappear when operational managers are fluent in each other's language.
B) Slower communication and more errors.
C) No communication problems if all managers were educated in the US.
D) No communication difficulties if all parties agree on a common language of the strategic alliance.

Question 41

What are the different kinds of commitment needed in a strategic alliance? Explain.

Question 42

Discuss some of the things multinational managers can do to build and sustain trust and commitment.

Question 43

What are some of the difficulties of assessing IJV or ICA performance? How do these differ for companies with different strategic goals?

Question 44

If an alliance fails to meet strategic goals,what two options do top managers have to choose from to resolve the situation? How can an alliance be improved?

Question 45

What are the characteristics of a good partner in a strategic alliance? Why do these partner traits help make a strategic alliance successful?

Question 46

What are some of the common value chain links companies use to gain strategic benefits from alliances? Pick two of these links and describe some of the benefits partners gain from pursuing these links.

Question 47

Compare and contrast the three main types of strategic alliances.

Question 48

Under what conditions should a firm choose one of the various management structures available for a strategic alliance?

Question 49

What are the different management structures possible for strategic alliances? Pick two of these management structures and discuss when they are most appropriate.