Strategic Alliance
INTRODUCTION
The collaborations between companies have been one of the most critical changes in industrial field during the last three decades. Through outsourcing and taking off ‘non-core’ activities, corporate borders have been pulled back and large companies are increasingly cooperated with other companies to access resources and devote themselves to activities outside their own boundaries.
Business cooperative relationship between companies is regarded as ‘hybrid’ organizational forms (Borys and Jemison, 1989; Powell. 1987; Thorelli. 1986). In order to access more international market and reduce risks, the hybrid organizational forms are mainly realized by contractual agreement, strategic alliance and joint venture. Compared to some casual cooperative arrangements between companies, strategic alliance is refer to a long-term, substantial collaboration, which is ‘an agreement characterized by the commitment of two or more firms to achieve a shared goal entailing the pooling of their resources and activities’ (Teece.1992, p. 19). It can be put on a continuum, where contractual agreement is on one end, characterizing low control and resource commitment, whilst the other end is joint venture, representing a high control and high resource commitment (Hill et al.1990). Variety types of strategic alliances include shared new product development, supply chain partnerships, technical collaboration, outsourcing agreements, joint research projects, etc.
In these days, strategic alliances are more and more important for firms to achieve efficiency and effectiveness in the international market. Through cooperation rather than competition, firms can access knowledge and market resources over both firms, instead or acquiring them. It is not just costs and time saving, but also increasing the efficiency with which knowledge is utilized.
Firms are entering into strategic alliances because of numerous factors. The rapid change in technology with high expenditures on
The collaborations between companies have been one of the most critical changes in industrial field during the last three decades. Through outsourcing and taking off ‘non-core’ activities, corporate borders have been pulled back and large companies are increasingly cooperated with other companies to access resources and devote themselves to activities outside their own boundaries.
Business cooperative relationship between companies is regarded as ‘hybrid’ organizational forms (Borys and Jemison, 1989; Powell. 1987; Thorelli. 1986). In order to access more international market and reduce risks, the hybrid organizational forms are mainly realized by contractual agreement, strategic alliance and joint venture. Compared to some casual cooperative arrangements between companies, strategic alliance is refer to a long-term, substantial collaboration, which is ‘an agreement characterized by the commitment of two or more firms to achieve a shared goal entailing the pooling of their resources and activities’ (Teece.1992, p. 19). It can be put on a continuum, where contractual agreement is on one end, characterizing low control and resource commitment, whilst the other end is joint venture, representing a high control and high resource commitment (Hill et al.1990). Variety types of strategic alliances include shared new product development, supply chain partnerships, technical collaboration, outsourcing agreements, joint research projects, etc.
In these days, strategic alliances are more and more important for firms to achieve efficiency and effectiveness in the international market. Through cooperation rather than competition, firms can access knowledge and market resources over both firms, instead or acquiring them. It is not just costs and time saving, but also increasing the efficiency with which knowledge is utilized.
Firms are entering into strategic alliances because of numerous factors. The rapid change in technology with high expenditures on
Bibliography: Pfeffer, J. and Salancik, G. R. (1978). The External Control of Organisations: A Resource Dependence Perspective. New York: Harper & Row. Penrose, E. (1959). Theory of the Growth of the Firm. Oxford: Blackwell.