Managing Alliances

In: Business and Management

Submitted By markpeps
Words 1278
Pages 6
Managing Alliances Paper
MBA 517 AU: Strategic Plan/Policy
November 24, 2014
Mark Pepper

1) Define a Strategic Alliance.
A Strategic Alliance is when two or more independent companies come to terms of agreement on what the other company can gain by converging there assets. The converging of these parties within the agreed terms based on service level agreements, form a business strategic alliance. Service Level Agreements (SLAs) and a given set of objectives define the terms of the alliance from each party. The author states that the terms are typically based on operation performance metrics to measure the terms of the success of the strategic alliance.

2) What percent of corporate Alliances are successful measured by the Cost of Capital. What are the reasons for such results?
The intention and meaning behind a Strategic Alliance is for both companies to be more successful as partners in a joint venture more then they would have separately. The author of the article states that corporate alliances are a 50/50 chance of success and goes on through some reasons behind the lack of success for one or both parties. Much of the failure of one party or another is due to the traditional organization and management. The operational performance metrics, from the Service Level Agreements that form the terms in which the alliances are joined, are dated in nature because of the focus on meeting the metrics versus looking the overall strategy and vision.
The lack of focus on the vision by company’s leaders causes them to manage their business individually and downwardly. Stemming through to middle management, then down to employee level. This management practice tends to cause a focus on just hitting the performance metrics versus managing to strategic success working through across organizational boundaries as one unit. As time goes by the metrics…...

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