Responses should be a minimum of 200 words and include direct questions.
Global Alliance Challenges
Global Alliances are complex entities that are prone to fail because of the complexities of shared ownership, culture, integration of different processes and the degrees of dominance of decision-making processes (Deresky, 2013). There are many reasons that businesses will enter into alliances, but the common denominator is the perceived gain by each party. The risk is that one party will gain superiority over the other, decreasing the other's sphere of influence. There are many ways that this can occur such as when the host government backs a certain side and creates difficulty for the other to operate or when one party of the venture obtains benefits such as trade secrets and no longer requires the other party to be part of the venture. Yu and Cannella (2013) found that rivals parties are more likely to initiate an alliance when one party needs the other to advance its goals and that host countries can have a positive affect on the joint relationship if the host government values a competitive environment.
Strategic Implementation of a Venture
After an agreement is made, the allied parties must focus on Functional Level Strategies, which include developing policy, administrative responsibility, and the development of schedules (Deresky, 2013). Jakada (2014) describes global strategy as "building a unique and sustainable ways by which organization create value, a broad formula for how business is going to compete against another business in the global market" (p. 81). To this end, alliances must implement a strategy for outsourcing, which includes the reasons for outsourcing, the specific model of outsourcing, a clear communication channel that advocates cooperation of the staff as well as the alliance partner and finally it must invest in the partnership (Deresky, 2013). This process, also known as "transformational outsourcing" (p.229) can assist in the effective implementation of an alliance.
References
Deresky, H. (2013). International management: Management across borders. 8th ed. Upper Saddle River, NJ: Pearson/Prentice Hall
Jakada, B. A. (2014). Building global strategic alliances and coalitions for foreign investment opportunities. International Journal of Global Business, 7(1), 77-94. Retrieved from https://search.proquest.com
Yu, T., Subramaniam, M., & Cannella Jr, A.,A. (2013). Competing globally, allying locally: Alliances between global rivals and host-country factors. Journal of International Business Studies, 44(2), 117-137. doi:https://dx.doi.org/10.1057/jibs.2012.37