Chapter 7

Question 1

Strategic alliances (cooperative agreements)

Answer 1

partnerships between two or more firms that decide they can better pursue their mutual goals by combing their resources as well as their existing distinctive competitive advantages

Question 2

Cooperative agreements

Answer 2

are transition mechanisms that propel the partners’ strategies forward in a turbulent environment faster than would be possible for each company alone.

Question 3

Joint venture

Answer 3

a special type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents. Preferred form of alliance because they provide greater control of proprietary technology. Also, ease entry into a market.

Question 4

International joint venture

Answer 4

refers to a JV among companies in different countries. A benefit of IJVs are that the partner’s local contacts and market will be utilized.

Question 5

Equity strategic alliance

Answer 5

a collaborative arrangement in which at least one collaborating company takes an ownership position in the other. Ex. Company X combined with Company Y to form Company XY. Company X owns 60% and the remaining 40% is owned by Company Y.

Question 6

Non-equity strategic alliance

Answer 6

alliances that are carried out through contract rather than
ownership sharing

Question 7

Synergy

Answer 7

value achieved through the combination of market entry, risk sharing, and learning potential that is greater than what the firm could have done alone.

Question 8

Global strategic alliance

Answer 8

can be formed between a company and a foreign government.

Question 9

Employee leadership

Answer 9

most significantly affects all other variable necessary for the successful implementation of a global alliance

Question 10

Unified technology infrastructure

Answer 10

provides a strategic advantage during the implementation of a global alliance

Question 11

Cross-border alliances

Answer 11

often formed to gain rapid entry into a new and consolidating market. A pitfall of cross-border alliances is disputes over management. A benefit is the ability to test marketing campaigns overseas.

Question 12

Competitive aspect of strategic alliances

Answer 12

accelerating diffusion of industry standards and
new technologies to protect domestic, strategic industries

Question 13

Cooperative aspects of strategic alliances

Answer 13

limiting investment risks through shares resources, forming upstream-downstream divisions of labor, and creating economies of scale in tangible assets.

Question 14

Dual role of strategic alliances

Answer 14

refers to the conflict between cooperation and competition

Question 15

Organizational design

Answer 15

the overall pattern of structural components and configurations used to manage the total organization. Organizational design as a mechanism for
factoring IJV control refers to the amount of decision-making power that the joint
venture holds.

Question 16

IJV control

Answer 16

the processes that management puts in place in order to direct the success
of the joint venture’s goals.

Question 17

IJV success or failure-

Answer 17

the most important factor is the choice of partner. It’s best to settle issues before the merger

Question 18

Success of multinational firm alliances

Answer 18

are greatly influenced by the form of governance
chosen

Question 19

Dovev Lavie’s value-creation strategy

Answer 19

is assimilating network resources to acquire new
skills and capabilities. Avoiding partners that compete in your industry if they enjoy superior bargaining power is a caution given to global companies by value capture strategies

Question 20

Complimentary products and skills

Answer 20

between alliance partners can minimize potential
problems in alliances

Question 21

E-commerce enablers

Answer 21

company specialists who provide small and medium-sized companies a wide range of strategic implementation services such as Web site
translation, screening orders, and helping the companies go global without the internal
capabilities to carry out global activities

Question 22

Guanxihu

Answer 22

a bond between specially connected firms that generates preferential
treatment to members of the network.

Question 23

Cultural differences

Answer 23

can be overlooked when the target country is similar to the home country. If the target country has conflicting practices and systems, cultural differences
can have a negative impact.

Question 24

Organizational formality can affect

Answer 24

cross-border alliances

Question 25

Berdrow and Lane

Answer 25

the process of harvest is defined as managing the flow of transformed and newly created knowledge from the IJV back to the parents.

Question 26

The process of transfer

Answer 26

can be defined as managing the flow of existing knowledge between parents and from the parents to the IJV

Question 27

The process of transformation

Answer 27

can be defined as managing the transformation and creation of knowledge within the IJV through its independent activities.

Question 28

Knowledge management

Answer 28

is the conscious and active management of creating,
disseminating, evolving, and applying facts, information, or skills acquired through
experience or education to strategic ends. The process by which the firm integrates and
benefits from the experiences and skills learned by it employees. The need for
knowledge management stems from the cultural and system differences between
partners

Question 29

Transformational outsourcing

Answer 29

global sourcing can produce gains in efficiency,
productivity, quality, and profitability by fully leveraging talent around the world

Question 30

McDonald’s

Answer 30

keeps price low to build market share, hires local when able to do so, forms paradigm-busting arrangements with suppliers, maximizes autonomy, makes
minor changes to the standard menu based on location

Question 31

Government influence of IJVs

Answer 31

copyright protection.

Question 32

Knowledge management process

Answer 32

transferring existing knowledge, transforming and
creating knowledge, harvesting knowledge from the IJV to the parents.

Question 33

Opening Subsidiaries in the host country

Answer 33

may be better than contracting with an outside
firm in the host country if it’s crucial to keep control of proprietary technology and
processes.

Question 34

The host government

Answer 34

influences strategic choices and implementations of foreign firms
via level of taxation

Question 35

Less developed countries

Answer 35

problems with IJVs often involve the local partner

Question 36

In Emerging markets

Answer 36

the initial challenge in implementing strategies is likely to be how to navigate poor infrastructures.

Question 37

Process of partner selection

Answer 37

may be rushed because they’re anxious to get into an
attractive market.

Question 38

Extent of control

Answer 38

exercised over an IJV by its parent company-is often primarily determined staffing choices for top IJV positions.

Question 39

Staffing friction

Answer 39

can be simplified by increasing the autonomy of the IJV.

Question 40

Local SMEs

Answer 40

often partnered by MNCs in order to capture new innovations and ideas

Question 41

IJV control mechanisms used by parent firms

Answer 41

staffing polices, legal contracts, organizational design

Question 42

Ownership divided among several partners

Answer 42

the parent organization is more likely to delegate the operational running of the IJV to local IJV management.

Question 43

When renewing sources of competitive

Answer 43

the single greatest impediment managers face
advantage is that partners can become competitors according to David Lei.

Question 44

Cross-border allies

Answer 44

often have difficulty collaborating effectively in competitively
sensitive areas, often leading to mistrust and secrecy.