Question

agree or not?

Conducting businesses across borders can be complex and highly sensitive due to the political, cultural and ideological consideration involved. Furthermore, as many of us may already know, dealing across borders can be cooperative alliance or competitive and each of those aspects brings its own advantages and complications. That said, some of the common sources of incompatibility with cross border alliances include; issues such as culture differences, language barriers, as well as complications related to the ideological and political conditions on the ground can further complicate the situation already highly sensitive. According to Pieter, K. J. (2005), “Given the inherent cultural, economic, and political difficulties associated with cross-border alliances, designing and managing any cross-border alliance is an extremely challenging task. Most cross-border alliance failures stem from strategic flaws. While many companies announce strategic alliances, many lack alliance strategies” (Pieter, K. J. (2005). Cross-border alliances: Advice from the executive suite. The Journal of Business Strategy, 26(1), 41-50) However, despite the challenges, cross-borders alliances provide many advantages, it helps mitigate the risks, reduce costs and bypass political and legal barriers. According to Deresky, H. (2017), “cross-borders alliances help avoid import barriers, licensing requirements, and protectionist legislations. In addition, it facilitates the share of the costs of research and development of new products and processes,” Furthermore, cross border alliances facilitate companies seeking to do business in countries where regulations are against foreign investments. Therefore, the synergy between cross border allies helps alleviate those burdens. It’s a proven fact that new communication technologies and cross border alliances have created a borderless world. Lastly, it is also important to mention that cross border alliances represent a very efficient way for MNC’s to remain sustainable and minimize costs as mentioned above.

Answer 1

I completely agree with the pros and cons mentioned for the cross border alliances. It does provide accessibility to companies at new country with getting in to legislative companies, take the advantage of company already having the business network, reduce cost of operation etc. However, the challenges highlight related to cultural and ideological differences are also true. So, the companies looking to have alliances must balance both the aspects and take decision which is best for the organizational success. Moreover, the strategy formation is very critical for successful cross border alliances which lists down all the steps and actions required to be taken in due course of time.