Mergers & Aquistions

Competition in the world of work is increasing. One method of developing competitive advantage is to develop dedicated alliance function. Even though alliances are risky and almost half fail, if they are organized and managed effectively, it can result in an increase of market value. Some companies have shown that they can generate more market value than others because of alliances. This is accomplished by organization from within the company.

Strategic alliance can become an important tool for achieving sustainable competitive advantage. It is a fast and flexible way to access complimentary resources and skills of other companies. An effective dedicated strategic alliance function performs four key roles. They are: improves knowledge-management efforts, increases external visibility, provides internal coordination, and eliminates accountability problems and intervention problems. (Dyer, Kale, Singh).

Even though there is not much known about mergers and acquisition, M&A, acquirers usually pay too much (Bower). Having dedicated alliance functions can result in learning more about companies and the ones that will generate greater stock-market wealth through their alliances. Companies that have worked together for a period of time and get to know each other’s strengths, weaknesses, and synergistic possibilities can sometimes lead to a merger or acquisition. Alliance functions are an advantage to mergers and acquisitions. Companies use guidelines and manuals to help them manage such things as partner selection and alliance negotiation, and contracting. Some companies have found that tools, templates, and processes are valuable. Tools can be helpful in identifying potential partners, companies will need to assess whether they will be able to work together effectively.

Alliances can sometimes lead to mergers and acquisitions. During mergers the companies blend their strengths and weaknesses, that have been identified through alliances, with the hope of...