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There here has been a steady move away from traditional rigid organizational structures and trend towards models that fit the business or market. This more flexible approach to organizational management allows the enterprise to innovate quicker and adapt more swiftly. A large part of this organizational malleability has been made possible due to strategic alliances and network structures. With strategic alliances, organizations can focus on their core strengths while relying on a trusted partner to carry out complementary operations. Organizations can also use a network operational structure to split their administration up into distinct operational units to promote maximum efficiency.
Strategic alliances involve two or more businesses coming together to benefit from their collective competencies but still remain independent. By coming together, these firms understand that they will benefit more jointly than separately. These alliances are important in the firm’s achievement of core objectives. For instance, the company’s core objective would be to increase their revenues, in this case a joint venture with another firm may guarantee achievement of this objective leading to the establishment of a strategic alliance. The strategic alliance will introduce new skills in the area of importance through learning. Teams within the new organizational structure are allowed to learn from each other and develop better technical abilities. Participating firms have access to a pool of resources and this may enhance the quality of their products and services if these resources are utilized appropriately. Strategic alliances provide an opportunity to fend off competition for the participating firms given the available knowledge and expertise.
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