Which of the following best enables firms to effectively manage both strategic alliances and mergers and acquisitions?

• A. Strong organizational capabilities and effective integration processes
• B. Focusing exclusively on short-term financial gains
• C. Avoiding collaboration with other firms entirely
• D. Relying solely on external consultants for decision-making

Answer: (A)

Verified step by step guidance

1. Understand the context: Firms engage in strategic alliances and mergers and acquisitions (M&A) to grow, access new markets, or acquire resources. Managing these complex relationships requires more than just financial considerations.
2. Identify key factors for success: Effective management of alliances and M&A involves coordinating different organizational cultures, systems, and goals. This requires strong internal capabilities within the firm.
3. Recognize the role of organizational capabilities: These include skills in communication, negotiation, integration of processes, and change management that help align the partners or merged entities toward common objectives.
4. Consider integration processes: Successful M&A and alliances depend on how well the firms integrate operations, share knowledge, and manage conflicts, which cannot be achieved by focusing only on short-term financial gains or external advice alone.
5. Conclude that the best approach combines strong organizational capabilities with effective integration processes, enabling firms to handle the complexities and maximize the benefits of alliances and M&A.