Alliances will be preferred to going it alone when

Question

Quizplus · Accepted Answer

When the level of transaction-specific investments required to complete an exchange is moderate, companies may prefer forming alliances as they can share the costs and risks associated with the investments. In such a scenario, the benefits of collaboration may outweigh the costs, and hence an alliance may be preferred over going it alone. Options A and B are not correct as they refer to situations where the level of transaction-specific investments is low or non-existent, which may not necessarily lead to the preference of alliances. Option C is incorrect as low uncertainty may not necessarily lead to a preference for alliances.

Alliances Will Be Preferred to Going It Alone When