FIRM COOPERATION

Question 1

WHAT ARE THE TECHNICAL END ECONOMIC DRIVERS OF INTER-FIRM COOPERATION?

Answer 1

IS TO HAVE ECONOMIES OF SCOPE, SCALE AND LEARNING

Question 2

WHAT ARE OTHER REASONS BESIDES TECHNICAL AND ECONOMIC THAT WULD LEAD TO INTER-FIRM COOPERATION?

Answer 2

AVERSION TO COMPETITION
TENDENCY TO CONTROL AND EXERCISE POWER
CREATING RELATIONSHIPS OF SOLIDARITY AND POLITICAL AFFINITY

Question 3

WHY WOULD FIRMS AVOID INTER-FIRM COOPERATION?
(DISADVANTAGES OF INTER-FIRM COOPERATION)

Answer 3

THE COMPLEXITY LEVELS OF ORGANIZATION
THE NEED FOR DIFFERENT MANAGEMENT
THE NEED FOR INDEPENDENCE AND COMPETITION
PROBLEMS CAUSED BY DIFFERENT VALUES AND INTEREST

Question 4

WHAT IS A CONSORTIUM?

Answer 4

THEY ARE ASSOCIATIONS OF 2 OR MORE INDIVIDUALS/ORGANIZATIONS WITH THE DESIRE TO PARTICIPATE IN A COMMON ACTIVITY WHERE BOTH POOL RESOURCES TO ACHIEVE THE SAME GOAL.

Question 5

WHAT ARE THE 3 TYPES OF CONSORTIUM?

Answer 5

THERE ARE 3 TYPES AND THEY ARE ALSO CALLED HYBRID SOLUTIONS
1) CORPORATE GROUPS ( EQUAL CAPITAL RELATIONSHIP)
2) FORMAL ALLIANCES AND NETWORKS ( FORMAL AGREEMENTS WITH LEGAL VALIDITY)
3) INFORMAL ALLIANCES AND NETWORKS ( INFORMAL AGREEMENTS BASED OFìN TRUST)

Question 6

WHAT ARE THE 3 TYPES OF CORPORATE GROUPS?

Answer 6

FINANCIAL AND CORPORATE GROUPS ( PARENT AND SUBSIDIARY FIRMS THAT FUNCTION AS A SINGLE ECONOMIC ENTITY)
FAMILY CONTROLLED GROUPS
JOINT VENTURES ( 2 FIRMS POOL RESOURCES TO CREATE A NEW FIRM)

Question 7

THE 4TYPES OF FORMAL ALLIANCES

Answer 7

CONSORTIA (SHORT TERM ARRANGEMENT BY SEVERAL FIRMS FOR A SPECIFIC PROJECT)
CARTELS ( FORMAL AGREEMENT TO MANIPULATE PRICES)
FRANCHISING ( ONE PARTY GRANTS THE OTHE TO USE ITS TRADEMARK, SYSTEMS AND PROCESSES)
TRADE ASSOCIATION ( ALL MEMBERS ARE INVOLVED IN THE SAME PARTICULAR BUSINESS LIKE RETAIL)

Question 8

INFORMAL ALLIANCES ( 3 TYPES )

Answer 8

SUPPLY NETWORKS
CONSTELLATION OF FIRMS
INDUSTRIAL DISTRICTS