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

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

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.

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

Given that alliances are typically formed between two or more corporate entities that are also operating pre-existing businesses, alliance managers need to be flexible. These managers must accept that the alliance's performance objectives will necessarily be moderately ambiguous. But, these same managers can be assured that the formal, written agreement between the alliance partners can be frequently referenced as a type of "rule book" that can be used to resolve any disputes in the alliance.

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

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?

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?

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

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.

When a multinational adds a new alliance to its alliance portfolio, the multinational's managers should remain focused upon the standalone value that the new alliance can generate, rather than being distracted by an assessment of whether the new alliance creates value from a portfolio perspective.

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

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

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

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