If adverse selection, moral hazard, and holdup are such significant problems for firms pursuing alliance strategies, why don’t they instead adopt a “go it alone” strategy to replace strategic alliances?
Answer to relevant QuestionsWhy would including a corporate mission statement on company letterhead or in corporate advertising be seen as a source of sustained competitive advantage?Can more than one firm have a competitive advantage in an industry at the same time? Which of the following firms faces the greater threat of “cheating” in the alliances described, and why?a. Firms I and II form a strategic alliance. As part of the alliance, Firm I agrees to build a new plant right next ...The hubris hypothesis suggests that managers continue to engage in acquisitions, even though on average they do not generate economic profits, because of the unrealistic belief on the part of these managers that they can ...The transnational strategy is often seen as one way in which firms can avoid the limitations inherent in the local responsiveness/international integration trade-off. However, given the obvious advantages of being both ...
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