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Strategic Alliance and Ethics

Firms that are partners in a strategic alliance may legitimately seek to gain knowledge from each other.

At what point does it become unethical for an organization to gain additional and competitively relevant knowledge from its partner?

Is this point different when an organization partners with a domestic firm as opposed to a foreign company? If so, why?

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Please refer to file response attached, which is also presented below. I also attached a relevant article that you might find helpful. I hope this helps and take care.

Firms that are partners in a strategic alliance may legitimately seek to gain knowledge from each other.

1 At what point does it become unethical for an organization to gain additional and competitively relevant knowledge from its partner?

Strategic Alliances are relational and based on trust with organizations in alliance working toward a common end. Over the course of a decade or more, the growth of strategic alliances has been substantial. In 1990, just 3 percent to 5 percent of all business conducted was through a strategic alliance. In 2000, the number jumped to 20 percent. In 2010, it is projected that strategic alliances will account for 40 percent of all business (source: EIU Global Executive Survey). Why strategic alliances? What is the benefit?and for whom? In today's tumultuous business environment, companies must be strategically and tactically nimble enough to correct their course based on market activity and increased competition in order to achieve a superior value-added position in the marketplace. Most would agree that this could be a difficult challenge at best. At what point though, does it become unethical for an organization to gain additional and competitively relevant knowledge from the partner. What criteria judges when an organizational crosses that invisible line, the line between ethical to unethical behavior? Because Strategic Alliances are based on trust and companies working toward a common end, anything that moves away from this end has a potential to be unethical.

A strategic alliance is preferable because it helps to achieve a superior value-added position in the marketplace by supplementing or creating a core competency. Although the potential for an alliance is unlimited, the potential for unethical conduct also lurks in the background. Although the strategic alliance can be leveraged for channel development, marketing, product development, administrative and other initiatives, the wrong information in the hands of the competitor could be the organization downfall. However, perhaps one of the most significant advantages to a company when forming an alliance is the fact that it can reduce the many financial risks associated with new product development and market entry. The benefits of strategic alliances are many. A well-organized strategic alliance can open new markets. It can leverage customer and prospect databases, improve competencies, expand market presence, and offer access to knowledge and expertise far beyond what's ...

Solution Summary

This solution explains the point it might become unethical when gaining additional and competitively relevant knowledge from its partner in a strategic alliance, and whether this differs between a domestic firm and a foreign company.

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