International Strategic Alliances - Assignment Example

Running head: INTERNATIONAL STRATEGIC ALLIANCES International Strategic Alliances ‘ Shahanaghi & Yavarian . “MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran” International Journal of Business and Management. 5(11), pp. 183 – 189. Summarized by: Student’s Name Student Number Course Name and Number Name of Professor Date of Submission Number of Words: 2,154 Abstract There is not much research study available with regards to integrating models that can be used in improving the ability of the managers to make decisions with regards to selecting alliance partner. In line with this, the article written by Shahanaghi & Yavarian (2010) focused on integrating the integrated Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) in order to assist the managers of automobile companies when deciding for the best partner alliance and optimize several business goals all at the same time. This report will not only summarize the theoretical foundation of the research but also identify its basic assumptions, research hypothesis, research methodology, and its contribution to the international business literature. Table of Contents I. Introduction...................................................................... 4 II. Purpose of the Chosen Reading Material .......................... 5 III. Summary of the Theoretical Foundation of the Research including its Basic Assumptions .............................. 6 IV. Hypothesis ............................................................................... 7 V. Methodology and Data Operationalization .............................. 8 VI. Research Findings and Conclusion ........................................ 9 VII. Recommendations .................................................................. 10 VIII. Contribution of Shahanaghi & Yavarian (2010) Article in the Literature of International Business ......................................... 11 References ..................................................................................... 13 - 14 Introduction In response to globalization, international strategic alliances is now being use as a business strategy in terms of maximizing the companies’ of economics of scale, increasing the efficiency of production in response to the fast changing market environment, empower the business in terms of penetrating a new market, improve the company’s competitive advantage within the domestic and global market, expand the business opportunities of a business organization, reduce the cost of production, and create new business opportunities for the company among others (Czinkota, Ronkainen, & Moffett, 2009, pp. 3 – 6; Wright & Dana, 2003). In line with this, strategic alliances are being used to enable companies establish a long-term business relationship with other companies in order to increase the company’s competitiveness with its competitors (Shahanaghi & Yavarian, 2010). The purpose of the chosen reading will be provided in this report by discussing the main objective of the article. Eventually, the article written by Shahanaghi & Yavarian (2010) entitled “MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran” will be summarized in this report. As part of summarizing the theoretical foundation of the research including its basic assumptions or the research hypothesis, research methodology, and the contribution of Shahanaghi & Yavarian’s article in the international business literature will be tackled in details. Purpose of the Chosen Reading Material Shahanaghi & Yavarian (2010) analyzed the international strategic alliances in automobile indusrty (Shahanaghi & Yavarian, 2010). Upon analyzing the theory and business practice used in international strategic alliances, the quantitative research study of Shahanaghi & Yavarian (2010) which provided the readers with a case study and real-life evidences based on BAHMAN holding Group (Mazda of Iran) will determine the best way to choose strategic alliance partner(s) in relation to the imporance of meeting managerial principals and the multi-objectives of mandatory industrial standards in order to produce competitive products. Aside from identifying the key strategic factors that could significantly affect the decision-making behind selecting a partner in Auto industry, the article of Shahanaghi & Yavarian (2010) will address these gaps by “providing an integrated Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) method” to enable managers who are working in Auto industry have the best tool when deciding for the best strategic alliance partner (Shahanaghi & Yavarian, 2010). Many companies that has adopted international strategic alliances as a business strategy failed to meet the company’s objectives because of wrong decisions made when choosing its business partner and allaince strategies (Shahanaghi & Yavarian, 2010). For this reason, there is a strong need for academic and business groups to develop research studies with good information with regards to the proper selection of competitive alliance partners. Since the research study made by Shahanaghi & Yavarian (2010) is informative in terms of providing the readers with competitive framework on how to choose the best alliance partner without sacrificing the business performance of both companies, it is undeniable that this article made a large contribution to existing literature in international business studies. Summary of the Theoretical Foundation of the Research including its Basic Assumptions By designing “an integrated Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) method” to enable managers who are working in Auto industry have the best tool when deciding for the best strategic alliance partner (Shahanaghi & Yavarian, 2010), Shahanaghi & Yavarian (2010) conducted a quantitative research study approach as a method of addressing the gaps between the need to know how to be able to decide in choosing the best alliance partner and be able to meet managerial principals and the multi-objectives of mandatory industrial standards in Auto industry to enable large-scale companies produce competitive automobile products. To give the readers a better idea on how to effectively respond to the business challenges associated with globalization, the article provided a literature review with regards to the strategic motives and common criteria used in selecting the best alliance partner. This particular qualitative method of research is useful in terms of strengthening the quantitative research analysis of the researchers. Based on the gathered literature review with regards to strategic motives and common criteria used in selecting competitive alliance partner, the researchers were able to have a better idea with regards to the differences in research methods used in the past and current researches that aimed on determining the strategies used in partnership selection process. Specifically the gathered information regarding the different research methods used in the past and current researches is useful in enabling Shahanaghi & Yavarian (2010) decide for the best research method they can used in designing the integrated Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM). For example: Shahanaghi & Yavarian (2010) revealed that Hacklin, Marxt & Fahrni (2006) designed a support system software that is useful in making decisions about strategic venture partnership selection whereas Yang et al. (2007) suggest the use of Analytical Hierarchy Process (AHP) that is based on ten factors related to three main categories known as: risk, expectation, and environment when making decisions related to outsourcing. Shahanaghi & Yavarian (2010) also mentioned the possibility of using qualitative method in order to determine the major factors that can significantly influence partner selection for international retail franchisor (Doherty, 2009). Hypothesis Increasing the managers’ ability to decide for the best criteria in selecting for effective alliance partner and optimize several business goals all at the same time will increase the success of international strategic alliances between two automobile companies. In line with this, hypothesis of Shahanaghi & Yavarian’s research study is: H1: The integration of Mutli Criteria Decision Making (MCDM) method and Mutli Objective Decision Making (MODM) process into a single model is useful in terms of increasing the managers’ ability to decide for the best criteria in selecting for effective alliance partner and optimize several business goals all at the same time. Methodology and Data Operationalization This article adopted the delphi method in research which is referring to a systematic and interactive forecasting method that is heavily based on the decisions of expert panels including the managers and significant individuals who are experts in the way businesses are made in Auto industry. Through the use of delphi method, the research study of Shahanaghi & Yavarian (2010) applied a survey-based quantitative research method to enable the researchers to be able to put together the information gathered from training management literature and in-depth interview results. According to Brown (2005), the process of delphi method in research has three stages known as: exploration, distillation, and utilization. Specifically under th exploration stage, researchers are able to use unstructured method when investigating about certain issues, its limitations, challenges, and problems that could signficantly affect the research study results. To minimize irregularities and bias in the survey results, there is a need to establish a set of criteria when selecting research participants who will be invited to join the research study (Brown, 2005). In the case of Shahanaghi & Yavarian (2010), the authors invited seven employees, the manager of the new business development group, R&D executive, and five other people who are very much familiar with the way Auto businesses are being managed. Given that the Auto industry is too broad a subject, Shahanaghi & Yavarian (2010) decided to concentrate on using information gathered from the case of BAHMAN Group (MAZDA) in Iran. Taken from the research method used by Jarimo (2006), Shahanaghi & Yavarian (2010) decided to utilize the Lingo software to enable them to use mixed interger linear programming model in order to determine the impact of integrating the use of the Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) in terms of enabling the top management to meet several business goals at all at the same time and develop a basic criteria for selecting the best alliance partner within the Auto industry. As part of using the Lingo software, the researchers defined the limitations which includes the capacity of factory assembly with 10,000 sets annually, the total demand for the product is more than 15,000 sets annually, the average of 38 technical specification for van, and the average fuel consumption of less than 6.88 liters per 100 kilometers per van (Shahanaghi & Yavarian, 2010, p. 185). Research Findings and Conclusion The results of the research study concludes that the development of appropriate partner selection model such as the integration of the Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) (MODM-MCDM) approach is the most important part of international strategic alliance within the Auto industry in terms of enabling the top management decide for the best strategies that will make strategic alliance successful. Using the Lingo software, Shahanaghi & Yavarian (2010) revealed that Mazda in Iran should purchase a total of 1,400 CBU units and 3,600 CBU units from alternative 2 (FAW company) and 4 (Siba company) respectively whereas a total of 10,000 CKD units should be purchased from alternative 2 (FAW company). Based on the linear formulation results, the top management of Mazda Iran was able to make better decision in terms of where to buy their CBU and CKD products. To enable researchers increase the number of reliable researches with regards to the selecting process of strategic alliance partner, researchers should consider analyzing and finding ways on how they can successfully integrate other available models used in selecting competitive alliance partner. Recommendations In general, strategic questioning is highly correlated to the accuracy and validity of the survey results in the sense that the data gathered through an interview process or other data gathering techniques must always be appropriate to the research question of the study (Richards, 2003, Chapter 2; Richards, 2006). Therefore, it is necessary for Shahanaghi & Yavarian (2010) to prepare questionnaires that will be used as a guide in going through the in-depth interview with their selected research respondents. To achieve good quality questionnaires, Shahanaghi & Yavarian (2010) should have a thorough understanding about the main purpose of the research study. According to Keith Richard (2006), “understanding the research process is important when a researcher has chosen to adopt a qualitative research study in order to avoid heading into a wrong direction”. Once the questionnaire is completely done, it is essential for Shahanaghi & Yavarian to go through the questions again in order to determine the specific questions that need to be refined. Contribution of Shahanaghi & Yavarian (2010) Article in the Literature of International Business There has been a lot of research studies made in relation to the subject of strategic alliances. However, most of these available research studies does not provide the readers with useful information that could apply to the strategic alliance decision-making process of top management within the Auto industry. Because of the limited available research studies being conducted to examine the importance and signficance of the Multi Objective Decision Making (MODM) and Multi Criteria Decision Making (MCDM) (MODM-MCDM) approach in the decision-making process of the managers, th article written by Shahanaghi & Yavarian (2010) has a lot of contribution in the existing literature of international business. Globalization or the integration of human resources and products from one country to another has become a signfiicant part of the modern business strategies. Given that the researchers provided a clear description with regards to their recommended future researches, this article can be used by other researchers in terms of increasing the number of available research works that pertains to the importance of selecting the right alliance partner. There is a long list of other models used to assist corporate managers in making important decisions when selection for a reliable and competitive business partner. As a result of expanding the available literature in the proper selection of alliance partner, it is not possible for other new alliance structure models to be developed in the near future. For this reason, modern business managers will be able to have a better idea on how they can address business problems that may arise in the process of entering business alliance partnership with a foreign business organization. *** End *** References Brown, A. (2005). Proceedings of the 4th European Conference on Research Methods: In Business . Academic Conferences Limited. pp. 57 – 58. Czinkota, M. R., Ronkainen, I. A., & Moffett, M. H. (2009). Fundamentals of International Business. 2nd Edition. Wessex, Inc. Doherty, A. (2009). Market and partner selection process in international retail franchising. In Shahanaghi, K. & Yavarian, H. (eds) "MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran" International Journal of Business and Management. , 5(11), 183-189. Hacklin, F., Marxt, C., & Fahrni, F. (2006). Strategic venture partner selection for collaborative innovation in production systems: A Decision support System-based approach. In Shahanaghi, K. & Yavarian, H. (eds) "MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran" International Journal of Business and Management. , 5(11), 183-189. Jarimo, T. (2006). Partner selection and utility sharing in collaborative networks, Licentiate’s Thesis. In Shahanaghi, K. & Yavarian, H. (eds) "MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran" International Journal of Business and Management. , 5(11), 183-189. Richards, K. (2003). Qualitative Inquiry in TESOL. Hampshire, UK: Palgrave Macmillan, Ltd. Richards, K. (2006). Quality in Qualitative Research. Keith Richards IATEFL Research Sig Newsletter , 18, pp. 1 - 4. Shahanaghi, K., & Yavarian, H. (2010). MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran . International Journal of Business and Management , 5(11), 183-189. Wright, R. W., & Dana, L.-P. (2003). Changine Paradigms of International Entrepreneurship Strategy. Journal of International Entrepreneurship , 1, pp. 135-152. Yang, D., Kim, S., Nam, C., & Min, J. (2007). Developing a decision model for business process outsourcing. In Shahanaghi, K. & Yavarian, H. (eds) "MODM-MCDM Approach to Partner Selection in Auto Industry. A Case Study on Mazda of Iran" International Journal of Business and Management. , 5(11), 183-189. Read More