HR
The topic under review is strategic alliances. This particular form of non-equity alliance between firms in the same industry (competitors) is becoming an increasingly popular way of conducting business in the global environment. Many different reasons of why such alliances are occurring have been recognized. These include: the increasing globalization of the world's economy resulting in intensified global competition, the proliferation and disbursement of technology, and the shortening of product life-cycles. This critique will use Kenichi Ohmae's viewpoint on strategic alliances as a benchmark for comparison. Firstly, a summary of Ohmae's article will be provided. Secondly, in order to critique Ohmae's opinion, it will be necessary to review other literature on the topic. Thirdly, a discussion of the various viewpoints and studies, that have hence arisen, will be discussed in detail. Finally, conclusions will be drawn with implications for companies operating in toda!y's global environment, together with suggestions for future research on strategic alliances. THE GLOBAL LOGIC OF STRATEGIC ALLIANCES The underlying argument or reasoning behind Ohmae's opinion that strategic alliances, or entente, are the
The final point for discussion is that despite the increasing popularity, wide range and huge amount of literature that has been written on the topic of strategic alliances, no theoretical framework has yet been developed. To date, there is not even a widely accepted definition of strategic alliances, whether forms such as joint ventures should be included or not. Johansson (1995) and Murray and Mahon (1993) both developed definitions for strategic alliances, Murray and Mahon providing a more detailed definition. It seems that the work of Murray and Mahon is the closest to a 'framework' on strategic alliances. The authors provide a workable definition, classify major types of strategic alliances, and determine the origins of strategic alliances (classified as either organizational objectives or environmental conditions). Also developed was a life cycle for strategic alliances and generalizations on dos and don'ts in strategic alliances. Shamdasani, P. & Sheth, J. (1994) An Experimental Approach to Investigating Satisfaction and Continuity in Marketing Alliances, European Journal of Marketing 29,4, 6-19. Secondly, despite this agreement, several major criticisms of Ohmae's (1989) article have emerged. These are the article is dated, a one-sided argument, lacking any academic references and empirical support. Ohmae wrote this article in 1989, ten years ago. Since then, several major events have occurred in the international environment that has affected the success of strategic alliances that were formed before these events. Firstly, the Soviet Bloc has completely broken up causing immense political instability in the area, Europe is a fully unified market about to introduce a single currency, and the future of the Asian 'tigers' is uncertain. Added to this, in many industries, such as the automobile industry, agreements that began as strategic alliances have now resulted in mergers. Frear, C. & Metcalf, L. (1995) Strategic Alliances and technology Networks, Industrial marketing Management 24, 379-390. Finally, Frear and Metcalf (1995) conducted an in-depth study on a single supplier within two technology driven networks. However, the authors produce general implications from the research: if presently in an established alliance, protect that position; look outside of existing networks for new-forming alliances; seek partners with complementary technology skills or marketing capabilities; invest in enhancing beyond state-of-the-art; and take a risk averse position. /interviews on strategic alliances. Despite the criticisms of Ohmae's (1989) article, from the literature reviewed, it is widely accepted that it is better to collaborate rather than compete in today's dynamic, global business environment. However, strategic alliances are not all-smooth sailing. They should be entered into when the expectations (and to an extent, the capabilities) of both partners are similar and the power and managerial skills are near equal. Added to this, each partner should receive some benefit from the strategic alliance. business environment is full of imperfect options and control of a company does not necessarily translate into success. This points to strategic alliances as being a fast, less risky and profitable way to enter the global arena. Murray and Mahon (1993) attempt to fill a gap in strategic alliance literature in the context of the changes and uncertainties that companies' face with a united Europe. The authors developed a working definition and a life cycle of strategic alliances, identified three major motives and origins for strategic alliances, together with strategic alliance dos and don'ts. on company performance also produced inconclusive results.
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Approximate Word count = 5137
Approximate Pages = 21 (250 words per page double spaced)
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