Collaborative Strategies - Essay Example

This also makes both the regions to have something to associate each other with, like a company having a head office in another place and operations in another place, makes people of the other country feel about the company more special, and thus it increases market share. It also gives an extra control to an origin or parent company over the collaborated company and its origin, also it plays some role in having better relations between not only two companies but also two countries and thus governments are involved in a positive manner.

The collaborative arrangements abroad are to reduce overheads and costs, as initiating the operations on the personal expenses can bring a heavy investment and capital into action, which is also not secured, as no body knows what might be the preferences of the origin where the initiation would take place. The real problem that arises when the collaboration takes places between a local and international arrangement is that at times, the international arrangement becomes more prominent and beneficial where as the local starts suffering as there might be a possibility that due to high cultural values the firm makes fair reputation abroad while having similar or even poorer reputation in the origin, this can really affect the operations and can increase the worries of the decision makers.

One of the widely most methods used for collaboration between two different companies or even parties is licensing, which after having more specialized form, known as franchising, however there are few differences between the two but they have more similarities as they both are used as a major form of collaboration. In licensing, the problem that occurs is on the side of the origin company, as if it would issue license to some other party than the party can start providing the service or products under the parent company's name, with having no concerns on following the instructions of parent company, they can also set the entire fixture and related things according to their own will, this can cause the parent company to have a poor image at times if the licenser has not taken any care of the original standards followed by the parent company.

In franchising, the problem gets opposite, as now the franchisee has to follow the instructions of the parent company in a strict manner, even the fixtures and the materials used in the product are same all around the globe in accordance to the parent company's will, in this case the franchisee gets worried as failure to maintain the real standards can lead to the cancellation of the franchise agreement. As long as we talk about business, than it automatically takes us to talk about individual objectives, which lead to problems.

There are numerous problems occurring in the collaborative arrangements such as having more concerns on the partnership rather than private operations, controlling problem as both of the parties have merely some control on each others work which can result in change views, also the personal objectives come first which can make both the parties apart and also cultural differences can occur, which are a major issue as there have been various firms