Someone recently bought our

students are currently browsing our notes.

X

Topic 4 Reading Langfield Smith Notes

Accounting Notes > Strategic Finance, Digitization and Extended Enterprises Notes

This is an extract of our Topic 4 Reading Langfield Smith document, which we sell as part of our Strategic Finance, Digitization and Extended Enterprises Notes collection written by the top tier of LSE students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Strategic Finance, Digitization and Extended Enterprises Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

AC310: Topic 4 - Reading: Langfield-Smith - The Relations Between Transactional Characteristics, Trust and Risk in the Start-up Phase of Collaborative Alliance

Topic 4 - Reading: The Relations Between Transactional Characteristics, Trust and Risk in the Start-up Phase of Collaborative Alliance (Langfield-Smith 2007) Introduction

*

*

*

*

One way of achieving collaboration is through the formation of strategic alliances o i.e. inter-firm cooperative arrangements
? 1) Horizontal alliances between competitors
? 2) Vertical alliances between buyers and suppliers
? 3) Diagonal alliances between firms in different industries Growing evidence of high failure rates (Gerwin 2004; de Rond 2003) o High level of relationship risk
? Different objectives and orientations o Opportunistic exploitation of the relationship (Dekker 2004) Appropriate governance structures, MCS and trust can help reduce alliance risk (Das and Teng 2001) Case studies: o Outsourcing and strategic supplier relationships (Seal and Vincent-Jones 1997, Das and Teng 2001, Dekker 2004, Cooper and Slagmulder 2004) o Joint ventures (Yan and Gray 1994, Groot and Merchant 2000) o Few empirical studies consider how managers' perceptions of trust and risk may influence the choice of governance structure and other aspects of control

Theoretical Framework

*

*

*

TCE is the most common theoretical framework used to study strategic alliances (Anderson and Sedatole 2003) Under TCE, governance structures can take 3 forms: o 1) Markets o 2) Hybrids (inc. most strategic alliances) o 3) Hierarchies 3 characteristics of transactions determine appropriate mode of governance (Williamson 1979,1991): o 1) Asset specificity
? e.g. Site of location specificity

*
Physical asset specificity

*
Human assets specificity (training, knowledge)

*
Brand name or reputational capital

*
Dedicated capacity

Buy the full version of these notes or essay plans and more in our Strategic Finance, Digitization and Extended Enterprises Notes.