Luthans and Doh 2012 discuss managing alliances List and exp

Luthans and Doh (2012) discuss managing alliances. List and explain three reasons why it is important for an international organization to form and maintain alliances. Must be 150 words.

Solution

Alliances with other companies are an integral part of corporate life.

Alliance is an agreement between two or more organizations to cooperate in a specific business activity, so that each benefits from the strengths of the other, and gains competitive advantage.

Strategic alliances are becoming an important form of business activity in many industries, particularly in view of the realization that companies are competing on a global field.

More than ever, in today’s climate where cash is king and credit is tight, alliances are a smarter, swifter, more reactive and economical way to pursue strategic opportunities and gain competitive advantages. But alliances, by their very nature, are notoriously difficult to plan, execute and maintain over time.

Strategic alliances are critical to organizations for a number of key reasons:

1. Organic growth alone is insufficient for meeting most organizations’ required rate of growth.

2. Speed to market is essential, and partnerships greatly improve it.

3. Complexity is increasing, and no single organization has the required total expertise to best serve the customer.

4. Partnerships can defray rising research and development costs.

5. Alliances facilitate access to global markets.

It is important for an international organization to form and maintain alliances because of the following benefits :-