Man 4720 Chapter 9
Alliance Management Capability
A firm's ability to effectively manage three alliance related tasks concurrently. 1. Partner selection and alliance formation. 2. Alliance design and governance. 3. Post formation alliance management.
Managerial Hubris
A form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary.
Strategic Network
A social structure composed of multiple organizations and the links among the nodes.
Join Venture
A standalone organization created and jointly owned by two or more parent companies.
Strategic Alliance
A voluntary arrangement between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.
Hostile Takeover
Acquisition in which the target company does not wish to be acquired.
Merger
Describes the joining of two indepedent companies to form a combined entity.
Corporate Venture Capital
Equity investments by established firms in entrepreneurial ventures.
Explicit Knowledge
Knowledge that can be codified concerns knowing about a process or product.
Tacit Knowledge
Knowledge that cannot be codified.
Non-equity Alliance
Partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements, and licensing agreements.
Equity Alliance
Partnership in which at least one partner takes partial ownership in the other partner.
The four main benefits of a horizontal integration
Reduction in competitive intensity. Increased differentiation. Lower costs. Access to new markets and distribution channels.
Small-world Phenomenon
Situation in which a network exhibits local clusters, each with high degree centrality.
Learning Races
Situations in which both partners in a strategic alliance are motivated to form an alliance for learning, but the rate at which the firms learn may vary; the firm that accomplishes its goal more quickly has an incentive to exit the alliance or reduce its knowledge sharing.
Structural Holes
Spaces where two organizations are connected to the same organization, but are not connected to one another. Firms that bridge strucutre holes gain information and control benefits over the nonconnected firms.
Relational view of competitive advantage
Strategic management framework that proposes that critical resources and capabilities frequently are embedded in strategic alliances that span firm boudnaries.
The reason for mergers
The desire to overcome competitive disadvantages. Superior acqisition and integration capability. Prinicple-agent problems.
Degree Centrality
The number of direct ties a firm has in a network, out of the possible direct ties.
Horizontal Integration
The process of acquiring and merging with competitors, leading to industry consolidation.
Acquisition
The purchase or takeover of one company by another.