Discuss the Motivation for International Strategic Alliances

Discuss the Motivation for International Strategic Alliances Discuss the motivation for international strategic alliances ABSTRACT: To establish traditional international business in the market, businessmen do apply different strategies and one of the most common and emerging strategies that are being used now is the international strategic alliance. To study the ‘motivation of international strategic alliance, it has been made to systematically define the term ‘motive. This paper argues those studies of motivation of international strategic alliance, their advantages and disadvantages and how they are becoming beneficial in the global market place. This paper is an initial step to understand the definition of motivation in terms of the international strategic alliance by using the firms that have used this strategy. INTRODUCTION: An alliance can be defined as a business to business collaboration. In an alliance two or more companies agree to work together to achieve a common goal while not losing their individuality. Strategic alliance helps the both parties to gain the complementary strengths. Companies form alliances for joint marketing, joint sales or distribution, joint production, design collaboration, technology licensing and research and development. Strategic alliances have different forms, Contractual (non-equity- based) alliances (Alliances which are based on contracts and which do not involve the sharing of equity), Equity-based alliances (Strategic alliances which involves the use of equity), Cross-shareholding (Both partners invest in each other). ( Peng Mike W. Global Strategic Management, Second Edition, page 219) One form of Equity-based strategic alliances is the joint venture. The formation of the alliance is rich and fragmented. One of the main reasons behind the collaboration is to gain the competitive advantages. According to Williamson â€Å"Intermediate asset specificity and low uncertainty are conditions that may lead to a preference for hybrid forms of governance structure over both arms length transactions and internalization† (Williamson, 1991). Increasing the strategic alliances is one of the fastest trends in the business today and it is becoming an essential driver to grow for every industry. One of the main goals to form a relationship with other companies is strategic alliance where they combine the skills and expertise of the both companies and gain the cooperative venture. Then they enter the international market and share their costs. MOTIVATION for STRATEGIC ALLIANCES in the INTERNATIONAL MARKET PLACE The growing international marketing is becoming the norm in this time and these partnerships are leveraging the growth through alliances with international partners, where the both companies merge and gain the competitive advantage. They do it by licensing agreements, cross shareholder deals, cooperative arrangement and joint ventures. Rather than taking risks and wasting their time and investing a huge amount on of money for gaining this competitive advantage in business, they are entering the international markets by finding an appropriate alliance which is operating in the same market in another country. So they enter the market that they desire to enter and the main reason behind this is to share the knowledge, skills and expertise and also to gain the marketing advantage in the world. And its becoming another strategy to defeat the monopoly business in the global business within fraction of time, for example collaboration of Sony and Ericson. In the view of traditional industry, firms are independent and emphasize on maximizing their own performance. As competition in the market shrinks the profits of firms, they do not rival always against one another. For instance, in 1983 Toyota and GM establish a horizontal alliance on a limited basis to accomplish different targets of manufacturing small cars in the US. The intention of Toyota was to gain knowledge of running business in the American market. On the other hand, Gms objective was to learn manufacturing small cars profitably. Sometimes high entry barriers discourage individual companies. In that circumstance companies can build strategic alliances and networks to level this fence. Firms convert the relationship with suppliers to a mutual assistance and knowledge sharing, previously which was based on hard-bargaining. This liaison is known as upstream vertical alliance. In this case companies do not consider suppliers as threats. In the same way, now, downstream vertical alliances can bind the central firms, buyers and distributors together rather than treating them as possible threats. The market potential pushes the firms on alternative products to establish strategic alliance and networks to materialize the commercial prospective of new products. According to Resource-based consideration firms can get benefited from the alliance through value creation. â€Å"First, alliances may reduce costs, risks and uncertainties. Second, Alliances allow firms to tap complementary assets of partners. Third, alliances facilitate opportunities to learn from partners. Finally, â€Å"real option† an option is the right, but not obligation, to take some action in the future.† Real option gives the opportunity to the firms when they are not sure whether they will do acquisition or merge. The companies just need to pay a tiny portion of their assets (known as deposit). Through this temporary alliance they will judge its future profitability. If they are not satisfied, they can easily leave. There is no obligation to go on with this alliance or take further actions. Institutional based consideration includes two categories Formal Institutional based consideration and Informal Institutional based consideration. According to Peng â€Å"Strategic alliances and networks function within formal regulatory and legal frameworks.† In some countries, Governments impose restriction on Whole Owned Subsidiaries. In that circumstance international firms have only one option, which is, to make an alliance with a local firm in order to enter that market. Peng says â€Å"Informal institutions centre on collective norms supported by a normative and cognitive pillar.† When a firm decides to move on its own, it faces pressures and criticisms from peer, analysts, investors, and the media. In that situation firms make collaboration with other firms to enhance or protect its image in the market place. The firms do choose the target market they want to enter. After choosing the target market they come up with a strategic plan which will suit in the international market. They use all resources of both companies to exploit the existing resources and explore the new opportunities; the main concern for this exploitation is to increase the productivity and efficiency using the current employed capital and assets thought standards. When the both companies are big in size their integration level is also high which, vise versa, makes the higher level the degree of control. The difference between the integration and degree of control is making motivation for forming this strategic alliance. The ADVANTAGES of STRATEGIC ALLIANCE Many start-up companies do focus on emerging into the market and gaining a competitive advantage in the international market to beat the monopoly business around the world for the same products and nowadays it is becoming the most useful strategy to gain this competitive advantage. By which a firm can enter the target market faster and with less risk on the investment. Businesses use strategic alliances to: scope and speed the business process achieve advantages of scale in international market increase market penetration among other companies increase the competitiveness in domestic and global markets enhance product development by sharing the skills, knowledge, technology develop new business opportunities through new products and services and make it more competitive in the world market expand market development fast increase exports diversify create new businesses gain completive advantage in cost diversification into new markets improve cash flow Ability to move quickly The motivation of forming the international strategy varies from one country to another country. The main focuses of the join venture of the companies are to represent the companies in the various countries. But as the days passed the definition has changed because of the activities which became more prevalent. Because the international market the alliance can impart to the company in a relative advantage in size or by the size which makes the process to go faster or in other words it provides compliments to the areas which they are lacking. The motive behind increasing the international strategic alliance is not only gaining profit. The other factor which motive them are the competition among the competitors the fast changing market place industry convergence For an example an alliance between Sony (which is Japanese company, it was an electronic consumer company) Ericson (a Swedish telecommunication company) both giant companies planned to get an advantage in production and development which will prove their marketing skills. So once the joint venture is done with a legal manner it is similar in nature to a partial acquisition in consideration for shares. Because this combination has created the transaction, combining the relative advantages of both parties and ties their future together. They stopped making their own phones. They started to share their expertise and they have a research development teams in United States, Sweden, China, Japan, India, Germany, and the United Kingdom. The both companies were profitable on the first year but they had to face huge loss because of lack of investment and strategic plan. Once they have injected the money into their joint venture and came up with new idea which was to launch the built-in-digit al camera and with high features they started to enter to the market back but it still were a huge loses for them. So having the same strategic plan this joint venture did not work. They were struggling for the first three years. But walkman phones made them successful and made the 4th position in the world again. So here it proves that the giant companies do merge to gain competitive advantage but it is not always threat to the other companies which are already leading. It totally depends on the strategy they follow and implement. The DISADVANTAGES of STRATEGIC ALLAINCE Alliances are risky in term of cost, the reason is not due to cash being involved with another company and its not being in the companys hands, but it is due to returns from which they will get. First of all the company is to go throw the join venture which involves the investment. When a proper set of contracts, various transfer prices and incentive schemes from the partners to the joint alliance resolve most conflicts, most of the joint venture manages to entirely avoid conflicts between its respective parties. Managing the managerial position of both companies and resolving the possible conflict from the both parties due to the location and other factors of international market, Financial blocking is one of the major disadvantages in the international strategic alliance. Because most of the companies do not want to disclose their financing operations. For example, an alliance with SonyEricsson in the area of cellular communications could reduce the likelihood of contracts with Nokia, thereby putting the company at risk that if Ericsson is weakened, so will be all the companies that depend upon it. Alliance between competitors can be risky. Firms can access to the information, technology, business strategy, and database of each other. Therefore they acquire the knowledge of another company. One firm can plan to excel other firm by achieving the knowledge and skills of other firms business tricks. And then it can drop the other firm and may use the strategy against this firm. Strategic partners are often led by the company which is stronger in the international market. But they should come up with something unique by merging the both companies rather than starting from a start-up. But this strategy dose actually work with the every company depending on the market and company, like SonyEricsson came up with mobile when they merge but it was a huge loss in the market . They started losing their shares rather then gaining it. And it affected the job market. So they later on came up with cyber shoot which was the turning point of their company and also the walking walkman, which was different product then they used to launch. Because their main focus was to make competitive cell phone. But by the cyber shoot they have entered the market and now they are one of the giant companies with 4th position rank in the world. Sharing profits is another disadvantage. The revenue is being divided and goes to different country which does not help the country to boom up. But it dose have a great impact on it The decision is to be made by the both parties so there are always barriers for future financing opportunities. The distraction is the main disadvantage. The top level management is to take decision on behave of the both countries so they are to keep all the time in mind thinking about their own country when ever they are making decision. The both parties do not think alike because of the distraction that they are around by the competitors. As two or more companies are joint in this alliance, the decision is to be taken jointly so there is always a headache from the other partner. Because of the way they want take the company may not agree. To keep this mutual decision, the companies are to go through all this unexpected disappointments. Conclusion: The strategic alliance is one of the most implemented strategies in the global competitive market. And it is one of the mostly common used strategies which have an effect in the market to boom up the economy of a country. It has created the bond between the geographical territories. Where they can share their competitive advantages and bring out new polices and products for the consumers and increase the job market in this world. The advantages for this alliance is more then the disadvantages. So people are coming up of new policies where they can hide the disadvantages compared to the advantage. According to Pekar and Margulis â€Å"The fundamental purpose of an alliance is to facilitate collaboration and varying degrees of integration between companies without necessitating a merger or an acquisition, though it can often lead to a merger or acquisition. Bibliography Hill, Charles (2005), â€Å"International Business Competing in the Global Marketplace† Peng Mike W. â€Å"Global Strategic Management†, Second Edition, (page 216-240) http://ideas.repec.org/a/bla/jomstd/v33y1996i3p301-332.html http://www.smallbusinessnotes.com/operating/leadership/strategicalliances.html http://www.corporate-partnering.com/info/strategic-alliances-advantages-and-disadvantages.htm http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=ArticlehdAction=lnkhtmlcontentId=1515040 www.faqs.org/abstracts/Business-general/Strategic-motives-for-international-alliance-formation-The-limits-of-employee-involvement-profit-sha.html http://www.lotsofessays.com/essay_search/Conclusion_Strategic.html http://www.sciencedirect.com/science?_ob=ArticleURL_udi=B6VGK-4MBBYN6-1_user=10_rdoc=1_fmt=_orig=search_sort=d_docanchor=view=c_searchStrId=1123950549_rerunOrigin=google_acct=C000050221_version=1_urlVersion=0_userid=10md5=52af2b0a1c7e40ab036d752257b46fc1 http://www.smallbusinessnotes.com/operating/leadership/strategicalliances.html illiamson, O.E. 1991. Strategizing, economizing, and economic organization. Strategic Management Journal, Winter Special Issue, 12: 75-94 Peng Mike WGlobal Strategic Management, Second Edition, page 213 Peng Mike W Global Strategic Management, Second Edition, page 227 Pekar Peter Jr. and. Margulis Marc S, Equity alliances take center stage: The emergence of a new corporate growth model, IVEY MANAGEMENT SERVICES †¢ May/June 2003

Islamic Leadership

Leadership An Islamic Perspective In the introductory chapter the book establishes what you should know by the time you finish the book. These points include: understand the nature and process of leadership from an Islamic perspective, describe the characteristics of effective leaders in general, and of Islamic leaders in particular, analyze your styles as a leader and follower, learn how you can mobilize, organize, and develop your followers Islamically, learn how you, as a leader, can build commitment by acting as a coach mentor, learn how to delegate effectively, and finally understand the steps that will enable you to become a more effective leader. The book defines leadership as the ability to persuade others to seek defined objectives enthusiastically. Within an organization a good leader is needed but so is good management. There are different positions of power when in an organization. The first one is legitimate power, which refers directly to someone’s position in an organization. Reward power is the second type of power, this power refers to having the authority to hand out promotions or pay raises. The third type of power is called coercive power, which uses force to get employees to work. The final type of power is information power, this type of power deals with having and giving information to others so that they can do their work. According to the text there are certain characteristics of an effective leader. The book ranks them from 1 to 8. These characteristics include: honesty, competent, forward-looking, inspiring, intelligent, fair minded, straightforward, and imaginative. These characteristics were determined by a study done by two leadership researchers named Kouzes and Posner. They surveyed 2,615 of the most successful leaders in the United States in order to figure out and rank the characteristics. The book also discusses how leaders must mobilize, developed, and organize their followers. The reason mobilization needs to be done is due to the fact that leaders cannot and should not be expected to accomplish everything on their own. The people are the target of the message and are also the ones that will be spreading the word. Mobilizing followers includes being able to reach out to everybody. The message of Islam is one that is not elitist so in essence the ides that only a few people are capable of energizing a group is not correct. It also states that the reticent person may become the best person. This statement basically means not the prejudge people and to always give them a chance because they just may prove what you believe wrong. The third statement about mobilizing says to accept the verbal commitment of others to Islam at face value. This means to always accept a pledge someone makes. Another point the book makes is to welcome even sinners and try it improve them. In order to develop followers a leader must be able to adjust their leadership style due to the fact that the followers have different types of styles. There are four different types of leadership styles that a leader can turn to. These leadership styles include: directive, coaching, supportive, and delegating. The style the leader should pick depends on the maturity of the people being led. With immature members the leader may want to use a directive style. This is because it involves clear and explicit guidelines. A coaching style may then be implemented as the members begin to learn their task. This style is characterized by two-way communication and an increased amount of supportive behavior. Once the members have gained more self-confidence in doing their tasks the leader may use a supportive style. This style consists of shared decision-making and two-way communication. Finally, in a situation where the members are mature and self-confident the leader should use a delegating style. In this style the leader allows the members to decide how, when, and where to carry out their tasks. The next and final step is to organize your followers. When trying to do this, leaders should use six steps. These steps include: 1. Clearly articulate the vision and mission of your organization, 2. Develop a statement of your organization’s philosophy regarding volunteer services, 3. Develop volunteer positions, 4. Do not go overboard by creating a multitude of tasks, 5. Reward both process and outcome, and 6. Develop a nurturing Islamic organizational climate. The book also discusses how leaders should be able to delegate tasks. When a leader is reluctant to delegate there are usually two reasons for it. The first reason depends on the organization’s culture. The second reason has to do with the leader’s personality, usually dealing with a Type A personality. There are delegation guidelines that are outlined in the book. these guidelines include: selecting the delegate with the appropriate skill level, expertise and background, select a delegate with whom you have a reciprocal trusting relationship, delegate both the pleasant and the unpleasant, the easy and the challenging, delegate ahead, delegate in chunks, delegate precisely, delegate don’t abdicate, and finally give credit. According to the text, there is one golden rule when it comes it delegation, which is â€Å"the more power you give way the more power you have. †

Identity in contemporary society Essay

How does class influence identity in contemporary society?The class structure involves some degree of shaping our identities. Income and paid work are important sources of individual and collective identity. Social class is a means of classifying the economic and social divisions of a society, which involve some degree of inequality. For example classifying some people as poor, working class or middle class. We may adopt or contest these representations. People define their economic position through ideas about the incomes and opportunities of others, therefore identities are influenced by income, whether we imagine peoples incomes to be in the middle or if we see it as between the rich and poor. There are two main traditions within the concept of social class and its effect on identity. These traditions are in the works of Karl Marx (1818-1883) and Max Weber (1864-1920). While they differ in the understanding of class and society, they share views on classes structured out of economic relationships. The Marxist theory of class shows that the class a person belongs to is a fundamental part of their identity. For Marx, society generated two main classes, a capital-owning class and a property less class. They called these the ruling class and the working class or the bourgeoisie and the proletariat. Class is rooted in the economic organization of production i.e. those groups who own factories, farms, coal mines or raw materials. These groups look after their own interests, live in similar surroundings and send their children to similar schools. Marx believed that class consciousness is particularly important to our understanding of identity. This is an awareness of a shared class interest and the existence of classes with opposing interests. Class consciousness would emerge through solidarity and collective action. For Marx, the key factor is private ownership of economic resources. Max Webers theory saw class as important when forming an identity. Weber saw class as a group of individuals who have certain interests in common; this  is known as market position, for example having similar opportunities for earning income through work or trade. Weber recognised that status is also important within social groups. Status is the different amounts of prestige, honour or social standing that is attached to different social groups. So where we live, manner of speech, our schooling and leisure habits decide our social class. This would suggest maybe status could have as much influence on identity as class. Webers theories would suggest that although, like Marx, agreed that different classes exist, Status was the key factor in deciding our identities and which group we belong to. Class is becoming more diverse with wider reference points within the structures. Some sociologists have gone as far as to say class is dead; (Pakulski and Waters, 1996), although a survey in 1996 showed that two thirds of those interviewed felt that there is one law for the rich and one for the poor (Adonis and Pollard, 1998, p.11)Sociologists and political scientists have argued that there has been a shift from collective to individual identities and also a shift from occupation to consumption patterns. It was argued that well paid working class were adopting middle class values, therefore eroding class identity. A study at Vauxhalls Luton car plant (Goldthorpe et al., 1969), on car workers attitudes and class identity showed signs of a fragmenting working-class identity and a new one developing. This would suggest that work based identities are becoming less important. The change in employment structures as well as job stability has maybe caused this shift. Peter Saunders put forward that consumption and lifestyle are now more important in shaping identities than occupation-based class. He argued that there was a growing division between those who could satisfy their consumption needs, through housing, cars and private health care and those who relied on public transport and state provided housing and health care. Saunders was criticized for being unable to prove that consumption influences peoples identities. To conclude, social class can provide us with a sense of belonging and how we can relate to the world around us. Who we are and what we do and have, change over time and economic structures such as inequality have an effect on our ideas of who we are and can be. However, although societies exist and function within class structures it does not mean that all members of that society identify with a class. It seems as class is becoming more diverse, it is becoming less important within identity as individuality becomes more valued and encouraged. REFERENCE Adonis, A. and Pollard, S. (1998) A Class Act, Harmondsworth, Penguin. Goldthorpe, J., Lockwood, D., Bechhoffer, F. and Platt, J. (1969) The Affluent Worker: Industrial Attitudes and Behaviour, Cambridge, Cambridge University PressPakulski, J. and Waters, M. (1996) The Death of Class, London, Sage.

Nonce Words Definition and Examples