Stragetic Alliances MGT 330

Essay by RainMillerUniversity, Bachelor'sA+, May 2004

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Strategic Alliances & Network Organizations

In this paper, I will review an Internet article of my choice, while also relating how the article pertains to the assigned reading from week three. I will then summarize how the article may be applied to my organization. I will then make recommendations for my organization based upon the concepts in the article. Upon careful deliberation, I have chosen an article that pertains to strategic alliances, network organizations and ethical responsibility.

Daboub, author of the article, "Strategic Alliances, Network Organizations, and Ethical Responsibility", begins the article by stating that the essential "goal of corporate strategy is to define the organizations domain, i.e., the business areas in which a firms wishes to participate to maximize long-term profitability." (2002, p. 1) With this, Daboub believes that firms may concentrate on a single product line by leveraging resources across a larger number of business activities through vertical integration and diversification without the associated bureaucratic costs.

He believes this could be accomplished quite simply by making long term strategic alliances among other firms, who could share the costs, risks, and profits of the business operations.

The author believes that through these corporate alliances, the independent firms can constrict their internal dynamics while deepening their proficiency in preferred areas, thus relying on their associate's to concentrate in other areas of functional and technical competence. With this process, Daboub states that the alliances would share the risks associated with the specialized investments while reducing the internal complexity and overall costs to achieve the desired results.

Daboub goes on the talk about the disadvantages of strategic alliances. He believes that these alliances can create challenges and threats. A good example of these challenges and threats would be that the "profits must be split and the knowledge shared." (Daboub, 2002, p.