Advantages and Disadvantages of Strategic Alliances over the Merger and Acquisition - Assignment Example

Three Questions in the Exam Table of Contents 2 Q Advantages and Disadvantages of Strategic Alliances over the Merger and Acquisition 3 Advantages 3 Disadvantages 4 Q.2. Importance of Organizational Knowledge Creation within Organizations 5 Q.3. Critically Evaluation of Many Cases of Strategically Socially Responsible Behaviours by Organisations Focus On Environmental Activities 6 References 9 Q.1. Advantages and Disadvantages of Strategic Alliances over the Merger and Acquisition Advantages Strategic alliances as well as Merger and Acquisition (M&A) means a contract amongst two companies through which the companies can work in a collaborative manner on a global context. Strategic alliance is determined to be an effective instrument with the assistance of which companies are able to conduct operations in an allied manner. A company can achieve organizational goals by increasing market share with the help of strategic alliance and M&A, which a company cannot achieve alone. However, strategic alliances have certain advantages over other forms of external strategic association such as M&A. M&A is identified to be a procedure based on which companies combine resources for executing operations with a common purpose. Failure in M&A is recognised to be adversely affect the companies in terms of reduced profits, loss in market share and reduction in shareholders’ value among others (Zamir & et. al., 2014). From the provided case study, it can be observed that Samsung adopted strategic alliances with the Cambridge Silicon Radio in the year 2005 to develop Bluetooth as well as GPS elements to produce better mobile applications and improve the business process. In this regard, the advantages of strategic alliances can be also observed in the case of partnership between Nokia and Microsoft for building an effective operating system and to produce new handsets to increase the market share. Another advantage of strategic alliances is that the companies can attain competitive advantages and provides several opportunities to hold a good market position. With the help of strategic alliances, the companies such as Nokia and Microsoft and on the other hand, Samsung and Cambridge Silicon Radio can have the opportunities to reduce their dependency and improve their potentiality. It also helps the companies to reduce the cost of suppliers and with the help of strategic alliances, the companies can enter into new markets to expand their businesses in the global context. . With the help of strategic alliances, Nokia and Samsung are able to enhance their distribution channels and also reduced the manufacturing cost of procuring material and supplying with minimum risk factor (Zamir & et. al., 2014). Disadvantages Along with several advantages, strategic alliances have certain disadvantages. It can be due to strategic alliances that one company depends on the alliances or partners for skills and abilities to increase market share. The dependency on partners for performing certain specific tasks may negatively impact the sustainability of the business in the long run. In this regard, it can be evaluated that Samsung developed partnership with Cambridge Silicon Radio to improve Bluetooth and GPS to provide better technology based handsets to the people (Zamir & et. al., 2014). In this context, Samsung should not depend on its partners and therefore, it can be problem for Samsung and Cambridge Silicon Radio to accomplish their individual organizational goals successfully. Another disadvantage of strategic alliances is that it creates conflicts among the partners if the project cannot be managed properly. Multiple numbers of alliances can also be the problem for a company and it can also create a problem in the business process of the companies. Companies such as Nokia and Microsoft along with Apple can face the problem of selecting the business objectives due to strategic alliances. On the other hand, through M&A between Sony and Ericsson in 2001, the companies have been able to improve the design as well as the quality of the products in terms of innovation and technological capabilities (Zamir & et. al., 2014). Q.2. Importance of Organizational Knowledge Creation within Organizations Mobile phone industry provides technology as well as communication base services to the people by developing variety models of handsets. Organization knowledge creation means the process through which information can be generated and later knowledge is to be connected to the knowledge system for generating new knowledge as well as concepts for the improvement of an organization. Therefore, the mobile phone industry needs organizational knowledge creation to produce new model of mobile phones or handsets. Organizational knowledge creation is an essential theory within organizations, which can helps the managers to design and develop innovative technology based mobile phone through which expectation of the people can be accomplished (Nonaka, 1994). From the provided case study, it can also be evaluated that the managers or the people involved in producing mobile phones should have the knowledge about the software and the uses of advanced technology for the improvement of quality as well as design of the mobile phones. It can be observed that Samsung, HTC and Nokia are the mobile companies providing mobile services on a global context. In the present day scenario, mobile phone is a necessity of the people through which people can easily communicate with their family members, relatives and others anywhere in the world. Therefore, Samsung and Nokia need organizational knowledge along with creation for the improvement of the business process as well as organizational process (Nonaka, 1994). In the recent trends, Samsung has expanded its business in several countries by developing smartphone and tab through which people can easily do their official work and holds a good position in the global environment. It is essential for the mobile industry to have the ability to develop new design handsets in the global market, which can be different from the other mobile phones. With the help of organizational knowledge, the managers of the mobile industry can implement innovative ideas for the creation of new design mobile phones. Organisational knowledge creation is also required within the mobile industry to manage the project work properly in relation to making new model and design handsets (Nonaka, 1994). Organizational knowledge creation also helps the company to increase the knowledge about creativity, technological aspects along with leadership to improve the business process along with operating system within the organization. This theory also helps the organization to develop ideas for improvement of quality and design of mobile phones. Organizational knowledge creation also helps the organization to acquire new concepts and ideas along with strategic knowledge to maintain long-term relationship with the suppliers for the availability of mobile phones in the markets and meet the demands of the customers. Organisational knowledge creation is also identified to be effective process based on which companies are able to obtain knowledge in terms of innovation, technical aspects and resources among others (Nonaka, 1994). Q.3. Critically Evaluation of Many Cases of Strategically Socially Responsible Behaviours by Organisations Focus On Environmental Activities There are several companies, which focus on environmental activities to enhance sustainability of the organizations and to attain competitiveness. From the provided case study, it has been observed that there are several mobile companies in the case study, which not only produce only mobile phone, but they also produce tab and laptop. Environmental activities involve in reducing the problem of global warming, protection of resources as well as eco-system, which is also required to improve the sustainability of the organizations. In the recent trends, many companies also implement Corporate Social Responsibility (CSR) strategies for changing the business process and organizational process (Hohnen, 2007). Presently, companies focus on eco-friendly raw materials to produce good quality products. By implementing CSR and environmental activities, the companies can enhance the communication system along with operating system. By applying environmental activities, the companies can enhance effectiveness of the products and also can improve the performance of the organizations. Through CSR strategies and environmental activities, the companies can increase awareness about the role of the business toward the development of a community or a society (Hohnen, 2007). Moreover, many companies face high competition problems in the market, as several companies produce mobile phones, but the brand is different such as Samsung, Nokia and Apple among others. Therefore, the company focuses on the environmental activities to produce environmental-friendly products and hold a good position in the competitive market to achieve a competitive advantage. By focusing on environmental activities, the company can also provide better infrastructure and an effective workplace environment to the employees, so that the employees can perform their functions effectively and increase profitability (Hohnen, 2007). Social responsibility can be defined as the major aspects of an organization, which has an impact on the activities as well as decisions in terms of sustainable development of a society. In this regard, it can also be evaluated that many companies focus on environmental activities for the development of the society. By implementing CSR, the companies can incorporate social, economic and environment factors with effective strategies, decision-making and values of the organizations to create good practices in the organizations to achieve sustainable development. In addition, several organizations focus on environmental activities for satisfying the demands of the customers by providing them good quality and environmental-friendly products (Hohnen, 2007) From the provided case study, it can be recognised that Apple is one the leading companies, which produce better quality phones and laptops. The Apple phones provide the best services to the customers for enhanced quality as well as increased features. Apple also focuses on environmental activities for the improvement of the quality of the products and the effectiveness of the productivity. The company also implement CSR for product development and to meet the needs of the customers. By focusing on environmental activities and satisfying the demands of the customers, the company is able to maintain sustainability and also attain competitive advantages (CNN Money, 2014). References CNN Money, 2014. Apple Inc. Company Description. [Online] available at: http://money.cnn.com/quote/profile/profile.html?symb=AAPL [Accessed May 8, 2015]. Hohnen, P., 2007. Corporate Social Responsibility. An Implementation Guide for Business, pp. 1-103. Nonaka, I., 1994. A Dynamic Theory of Organizational Knowledge Creation. Institute of Business Research, Vol. 5, No. 1, pp. 14-37. Zamir, Z. & et. al., 2014. Strategic Alliances; a Comparative Analysis of Successful Alliances in Large and Medium Scale Enterprises around the World. Educational Research International, Vol. 3, No. 1, pp. 25-39. Read More