Network level strategy has to do with the issue of inter-organizational relationships. According to De Wit & Meyer (2010), this issue has four different aspects. Besides relational actors, there are three more aspects. Which of the following ones is NOT one of them?
Relational interdependence
Relational objectives
Relational arrangements
Relational factors.
De Wit & Meyer (2010) distinguish several categories of contextual actors. Which of the following groups is NOT identified?
Environmental
Social-cultural
Economic
Technological.
Following De Wit & Meyer (2010), sharing operations, sales infrastructure, logistics systems or payment facilities are clear examples of:
Linking
Lumping
Lending
Learning.
According to De Wit & Meyer (2010), when two or more firms merge together in order to improve their bargaining position, vis-à-vis other industry actors, this can be characterized as:
Lobbying
Linking
Lumping
Leaning.
Ruigrok and Van Tulder (1995) categorize four specific types of inter-firm relationships. They define them from the perspective of power position. How can the power position be characterized when the relationship is balanced and loose?
Mutual independence
Mutual dependence
Leveled independence
Leveled dependence.
Ruigrok and van Tulder (1995) categorize four specific types of inter-firm relationships. They define them from the perspective of the power position. How can the power position be characterized when the relationship is unbalanced and tight?
Mutual independence
Mutual dependence
Unbalanced independence
Unbalanced dependence.
De Wit & Meyer (2010) outline various examples of collaborative arrangements. They make two major distinctions in their overview. The first one is between bilateral and multilateral arrangements. Which of the following does NOT belong to the second distinction?
Equity-based arrangements
Learning arrangements
Contractual arrangements
Non-contractual arrangement.
How does a proponent of the discrete organization perspective view collaboration?
It is a method of breaking out of the zero-sum game that is competition
It is a conspiracy of the weak against the strong
It is primarily a tactical maneuver
It pushes firms towards competitive fitness.
Merck (Exhibit 7.1, short case p. 377) is a large pharmaceutical company, confronted with increasing pressures to lower the price of its drugs. After years of unchallenged price hikes, governments now look at the drug firms as partially responsible for the soaring cost of health care. In the US, the rise of ‘managed care’ organizations has further enhanced the bargaining power of buyers, placing more pressure on prices. How would proponents of the discrete organization perspective respond to these developments?
They would argue that drug firms, like Merck, should improve their bargaining position towards industry players, for instance by developing new unique drugs
They would argue that drug firms, like Merck, should try to build long term relationships with governments and managed care organizations, to avoid tough price negotiations
They would argue that drug firms, like Merck, should diversify into related products, to spread their risk over a broader portfolio of businesses
They would argue that drug firms, like Merck, should not do business with customers that have more power than they do, to avoid the threat of becoming interdependent with other organizations.
Merck (Exhibit 7.1, short case p. 377) is a large pharmaceutical company, confronted with the competitive pressure caused by new drug development by a growing number of small, highly specialized biotech firms. What Merck has consciously not done, however, is to follow the industry trend towards more alliances with small biotech firms. Merck’s philosophy towards R&D is decidedly do-it-yourself. No more than 5% of Merck’s total research spending ends up outside of its own laboratories. Merck’s preference for vertical integration suggests a strong tendency towards:
The core competence perspective
The inside-out perspective
The discrete organization perspective
The embedded organization perspective.
Merck (Exhibit 7.1, short case p. 377) is a large pharmaceutical company, confronted with the competitive pressure caused by new drugs development by a growing number of small, highly specialized biotech firms. What Merck has consciously not done, however, is to follow the industry trend towards more alliances with small biotech firms. The enthusiasm, of Merck’s competitors, for alliances with the creative independents is based on the view ‘if you can’t beat them, join them’. What would advocates of the discrete organization perspective probably advise Merck’s competitors to do?
To make sure that both sides of the alliance have the same objectives and fully trust each other, before moving forward
To build in conflict resolution mechanisms, because a lack of harmony will eventually kill the collaboration
To make sure that they have plenty of negotiation power, to pressure the creative independents into a deal in which the big drug firm gets a large cut of the future profits
To show commitment to one another, whereby the big drug firm takes an equity share in the creative independent, while the independent gives the big drug firm a formal position on its board of directors.
McCain is a leading Canadian multinational in the potato industry. De Wit & Meyer (2010) mention that this company succeeds in having control over the total value chain (Exhibit 7.2, p. 381). This is a proof that McCain has:
An embedded organization perspective
A discrete organization perspective
No perspective at all
Adapted both perspectives.
What would be a typical statement for a proponent of the embedded organization perspective?
Cooperating firms should emphasize the opportunity for a win-win, positive-sum game
Networks will put the competition out of business
To make alliances work, firms need to create pure amicable relationships