Firms often form alliances with partners from previous alliances because
A) of the previous investment in due diligence.
B) organizational structures are already in place.
C) contracts are easily renewed.
D) social capital already exists between them.

Question

Quizplus · Accepted Answer

Social capital refers to the network of relationships, trust, and goodwill that exists between individuals or organizations. When firms form alliances with partners from previous alliances, they can leverage the social capital that already exists between them, which can help to reduce transaction costs, facilitate communication, and increase the chances of a successful partnership. Additionally, firms may have already established a track record of success with their previous partner, which can provide a basis for building a new alliance.

Firms Often Form Alliances with Partners from Previous Alliances Because