Motives

Chapter 8 deals with those aspects of cooperation that precede the actual process of working together. It considers possible motives for alliances, noting that there are generally at least two, reflecting a company’s response to changes in the external environment and the company’s feeling of vulnerability or deficiency in certain areas of its operations. It may have inadequate market access, technology, brand strength, product range or other factors; it may lack financial muscle, or feel the need for speed to take advantage of a market opportunity that will not be there for long. Strategic, transaction-cost-reducing, and organizational learning motives for cooperative activity are compared and contrasted. Considering the increasingly important role that firms from emerging countries play in the global economy, this chapter also briefly compares the strategic motives of emerging-economy firms with those of developed-economy firms for alliance formation.