A key factor in the success of both alliances and acquisitions is relational cap

Question

A key factor in the success of both alliances and acquisitions is relational capabilities, the ability to work together in an alliance, or the ability to have two organizations blend seamlessly into one. The relational difficulties between two organizations are exacerbated in cases of global alliances/acquisitions due to the potential for extensive cultural, political, and moral differences. In a relationship between two U.S. firms, what relational traits do you think would be important to ensure success? What steps would you take to make sure that both your firm and the partner firm had the required skills?

Explanation / Answer

Answer 1:

Please refer below the relational traits that are important for succesful alliance or aquisition or parternering.

1. Informaiton Flows:

This relational trait reflects the extent of sharing information within two firms. Inter firm relationships (IFR) are highly influenced by the information flows within them. A firm with greater levels of information flows communicates extensively with its ally or partners, essentially acting as an information hub for its Inter firm Relationship partner network. This role is especially important in relation to a firm’s control and collection of pools of strategically important information from its bilateral communication with IFR.

2. Relational Embeddness

This relational trait reflects the extent of closenes and strength of interaction between two firms.

Answers 2:

To have successful alliance or acqisition or parternship I think both the firms should focus on following series of actions.

1. Develop sustainable relational strategies: Both the firms should focus on developing strategies such as Relational proclivity and Realtional Capability. Relational procilivity refers to willingness to forge in or engage with ally or partner firm. Relational Capabilty reflects firm's ability to forge in, develop or engage in with partner firm or ally.

2. Developing New Entity

This step helps both the firms to understand that a merger will transform two or more organizations into a new, single entity. This new entity will have an organizational culture that is different from either company—whether it is a joining of equals or an acquiring company and an acquired company. It will be a unique culture shaped from the previously independent organizations.

3. Develop New Vision

When two firms intend to become partner or to develop alliance then a new entity formed through alliance or acquisition should develop a new vision, or a statement of what the new organization intends to become. It is a broad, forward-thinking image that the company must have before it sets out to reach its goals. It is a concept of what it intends to deliver over time to customers, shareholders. and employees

4. Develop Leadership characteristics and develop the culture to align the vision with strategic objectives of alliance or merger.

5.Measure success:

This will help employees feel confident that leadership characteristics identified and leaderships are on board to make the new company everything it can be. Te purppose of this type of survey is to measure the climate in an organization which will reveal if its culture is producing the desired outcomes for employees, management and the organization. Such a type of analysis bring to light the organization’s strong points, as well as its developmental needs.

Note: I would like to have your opinion and if you have any doubt in specific. I will be glad to help you.

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