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MOR 565

Alliances & Cooperative Strategy

SPRING 2021

 

Instructor: Kyle J. Mayer, Hoffman Hall 502

E-mail: kmayer@marshall.usc.edu

Phone (Fax): (805) 208-6564 (Cell)

Office Hours: By appointment

Class Meetings MW 2:00 – 3:20

Time & Room: Online

NOTE: Email is the best way to contact me. I check it regularly.

Course DESCRIPTION

This course is intended to improve your ability to determine whether, when, and how to execute cooperative strategies as part of your firms’ overall strategy. The last decade has seen an explosion in cooperative activity between firms. As a result, it is likely that, regardless of your chosen career path, you will at some point either work for, help to establish, or compete with cooperative ventures. Managers considering collaborative activity face a range of issues: When should an interaction be structured as a joint venture, a contractual alliance, or simply as an arm’s-length contract? When should I prefer an alliance to doing the project entirely in-house? How can I best structure and manage this alliance - and what do I do to prevent competition between my partner and me within this alliance? How do I evaluate whether a prospective partner is best for me?

A final component of the course goes on to examine the choice between an alliance or M&A. When does in make sense to acquire another firm rather than working with via contract? What are some of the major challenges in trying to integrate an acquired company?

This course introduces students to the issues and analytical arguments behind these questions, drawing on recent advances in competitive strategy, organizational economics, and organizational behavior. Of course, even though it incorporates various theoretical perspectives, the course ultimately is designed to focus on the essential issues and problems of cooperative strategy as experienced by managers. The objectives of the course are to provide analytical frameworks and tools that will sharpen your ability to:

• Recognize and evaluate collaborative opportunities;

• Evaluate potential partners;

• Anticipate problems faced by cooperative ventures and to manage these effectively;

• Develop and assess an overall cooperative strategy;

• Compare the benefits of collaboration to M&A; and

• Prepare a coherent, internally-consistent plan and structure for a given collaborative venture.

COURSE OBJECTIVES

1. Learn to think about how to consider whether to embark upon a cooperative relationship with another organization, complete the task or project internally or acquire another firm.

a. We will build these skills through class discussion of cases, articles and current alliance activity as well as the first individual assignment, and the group project.

2. Learn to consider how to chose a partner and what factors to consider in negotiating a cooperative deal with another organization.

a. We will build these skills through class discussion of cases, articles and current alliance activity as well as the first and second individual assignments, and the group project.

3. Learn to connect an organization’s strategy to its sourcing plans in uncertain environments characterized by a lot of change and innovation.

a. We will build these skills through class discussion of cases, articles and current alliance activity as well as the first and second individual assignments, and the group project.

4. Learn to maintain a cooperative relationship over time and to know when (and how) to terminate it.

a. We will build these skills through class discussion of cases, articles and current alliance activity as well as the first individual assignment, and the group project

SUGGESTED Prerequisites

• Core strategy courses. (We will build on ideas from competitive strategy as well corporate and global strategy in discussing why firms ally or do M&A and how they manage these activities.)

Required Reading Materials

• Many cases and readings are available in the online case pack from Harvard Business School Publishing. An increasing number of readings, however, are available in Blackboard. I am putting as many readings as possible in Blackboard to save costs, but some are only available from HBS Publishing. To order the case pack (reader), please go to the following web address (you need this unique address to order the case pack for this course):



You need to have a student account with HBS Publishing to get the reader. If you don’t already have one, it is quick and easy to create one.

• The rest of the course readings are in Blackboard. I use of lot of cases written by students from prior classes and take advantage of our library’s access to HBR content to get some things out of the HBS publishing course pack and into Blackboard. The schedule at the end of the syllabus indicates which readings are in Blackboard (in red text) and which are in the HBS Publishing course pack (in black text).

Individual Consultation

I am happy to meet with students to discuss progress or problems with the course materials and assignments. If you would like to meet, please contact me in advance (email is best) to arrange a mutually convenient time. I am also available by email most days.

Course FORMAT

this course will involve several different types of class sessions. Specifically, we will discuss cases and (occasionally HBR-style articles), engage with guest speakers from industry, and bring in current topics in alliances and joint ventures from the business press. In addition to these activities, however, I will throw in a few other types of sessions as I want to mix up the course and provide a variety of different perspectives and topics to maximize the learning opportunities over a 15-week semester.

To provide a fuller perspective on the course topics, I will utilize some guest speakers to provide a different perspective and insight from different industries about how alliances operate. I will utilize 2-4 guest speakers to provide an applied perspective of how these issues are experienced—mainly in the technology and entertainment industries.

One unique scheduling aspect of this course is that I find value in non-standard course meetings. What I mean by that is that 80 minutes per session twice a week is great for a lot of things, but for some types of immersive activities we need more time. Towards that end I have incorporated a single half-day (4.5 hour) session that will focus on alliances and M&A in the tech and entertainment sectors. To add this half-day session, I have to cancel three classes so that the contact hours for the course stay in line with the units you receive for the course (a non-negotiable university requirement). The course schedule at the end of this syllabus identifies which sessions will be cancelled for the Friday half-day session on April 24.

communication

Electronic communication for this course will take place through Blackboard, including lecture notes and information about the group project, etc. Check the Blackboard course page regularly.

Please note that when printing lectures that are posted in Blackboard, please check to see if there is any annotation in the Notes section of Powerpoint—I often use the Notes section to provide additional explanation or examples.

Statement on Academic Conduct and Support Systems

 

Academic Conduct:

Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism in SCampus in Part B, Section 11, “Behavior Violating University Standards” . Other forms of academic dishonesty are equally unacceptable. See additional information in SCampus and university policies on scientific misconduct, .

Support Systems:

Student Counseling Services (SCS) - (213) 740-7711 – 24/7 on call

Free and confidential mental health treatment for students, including short-term psychotherapy, group counseling, stress fitness workshops, and crisis intervention.

National Suicide Prevention Lifeline - 1-800-273-8255

Provides free and confidential emotional support to people in suicidal crisis or emotional distress 24 hours a day, 7 days a week.

Relationship & Sexual Violence Prevention Services (RSVP) - (213) 740-4900 - 24/7 on call

Free and confidential therapy services, workshops, and training for situations related to gender-based harm.

 

Sexual Assault Resource Center

For more information about how to get help or help a survivor, rights, reporting options, and additional resources, visit the website:

 

Office of Equity and Diversity (OED)/Title IX compliance – (213) 740-5086

Works with faculty, staff, visitors, applicants, and students around issues of protected class.

 

Bias Assessment Response and Support

Incidents of bias, hate crimes and microaggressions need to be reported allowing for appropriate investigation and response.

 

Student Support & Advocacy – (213) 821-4710

Assists students and families in resolving complex issues adversely affecting their success as a student EX: personal, financial, and academic.

 

Diversity at USC –

Tabs for Events, Programs and Training, Task Force (including representatives for each school), Chronology, Participate, Resources for Students

Course Requirements and Evaluation

Participation – 15%

Regular (virtual) attendance and class participation are critical to successfully completing this course. You are expected to participate actively in each class session. You are encouraged to prepare for class with your colleagues (after all, this is a course on collaboration). However, each member of the class should be fully conversant in the material

Given the importance of class discussion, pre-class preparation is crucial. For cases, you should be prepared to set forth the core challenge facing the case protagonist(s), offer a critical assessment of the situation, and lay out cogently and persuasively a course of action. For readings, you should be prepared to outline the topic that each reading addresses, describe its central points, and offer your critical analysis of them. When cases and readings are assigned for the same day, you should be able to draw links between the case and reading in your discussion.

Assignment questions for each session will be posted to the course page in Blackboard, typically at least a week prior to the class for which they are assigned.

It is important to appreciate that class discussion is itself a collaborative activity. Please listen carefully to one another and attempt to build on or constructively critique prior comments. An effective participant:

Is a good listener;

Makes points relevant to the ongoing discussion;

Makes comments that add to our understanding of the case, topic and/or article;

Is willing to challenge ideas that are being expressed; and

Integrates material from a variety of sources (e.g., past classes, other courses, and their own experience) to the discussions in class.

Class Participation—Behavioral Anchor Rating Scale:

Excellent Performance

• Initiates information relative to topics discussed

• Accurately incorporates knowledge of assignment content (cases, articles and lectures)

• Clarifies complex, nuanced points

• Shares relevant personal experiences or opinions related to topic

• Actively participates in class exercises but does not try to dominate the conversation

• Demonstrates ability to apply, analyze, evaluate & synthesize course material

• Demonstrates willingness to attempt to answer challenging questions

• Effectively builds on other students’ contributions

Average Performance

• Participates in group discussions rarely or when asked

• Demonstrates basic knowledge of course material

• Offers clear, concise, “good” information relative to class assignments

• Offers input, but tends to reiterate basic points or repeat points other have made

• Attends class regularly

Unacceptable Performance

• Fails to participate even when directly asked

• Gives no input to discussions

• Does not demonstrate knowledge from the readings or lectures

• Shows up to class: does nothing

• Distracts group / class (side conversations, entering and leaving class, etc.)

• Participation distracts from main flow of discussion

OPTIONAL: To augment your participation grade, you can post links to articles (or paste the article) in one of two Blackboard Discussion Boards (Current Alliances or Current Acquisitions) about current alliances or acquisitions (completed or proposed) with a paragraph assessment of why you think the alliance is a good or bad idea for the firms involved. You don’t need to do this—it is purely optional and you don’t need to do it if you are actively participating in class. But you can earn participation credit for posting articles yourself or responding to articles posted by me or your classmates. (You can find the Discussion Boards under the Tools tab on Blackboard.)

Individual Assignment 1 — 10% or 15%

Pick a case we will do during the term and prepare a report on what has happened since the end of the case. The report should not exceed three pages double-spaced (excluding any attachments) and should discuss not only what happened (no more than half a page) but also the lessons learned in light of the concepts discussed throughout the course—this latter topic should be the main focus of the report. The key aspects of this assignment are the takeaways from what has happened since the case and how they generalize to help us understand how to craft and manage alliances more effectively or undertake better mergers and acquisitions (depending on the topic of the case). The assignment is due (emailed to me or hardcopy) at the beginning of class on the day that we discuss the case in class—no assignments will be accepted after we have discussed a case.

Second Individual Assignment — 10% or 15%

Why do alliances fail? Drawing from course material, highlight what you see as the 2-3 biggest issues facing alliances and discuss how to address them. Include examples to illustrate your 2-3 issues (and/or how to address them). The assignment is due electronically (via Blackboard) by 5:00pm on Friday, March 26. Limit yourself to two pages (double spaced) plus any additional exhibits that may support your points.

Group Project – 40%

Term projects will be completed in teams of 5-6 students. Teams should be finalized (and emailed to me) no later than Friday, September 1. Teams are used in this course because teams play central roles in organizations (and this is a course about alliances and cooperation). Working in teams provides you with an opportunity to learn from your colleagues, and practice (and evaluate your own effectiveness) working, managing, solving problems, and making strategic decisions in a setting that approximates the management teams typically charged with such tasks.

Your group will need to select a class session (five days are reserved for this purpose on the class outline—including both of our half-day sessions on the entertainment and technology issues) and lead a 30-40 minute class discussion of an alliance or an alliance-related issue. You need to clear your selected alliance, acquisition or issue with me in advance and I will engage with each group before their scheduled day to review their plan for the class discussion. In addition, groups must distribute their reading materials (that will be the basis of the class discussion) to their classmates at least one week prior to the day they lead the discussion. Groups should email case materials to me and I can post them to Blackboard.

You can use a recent or current alliance or acquisition as a vehicle for case discussion (as long as you can collect enough information to have a meaningful class discussion). Another possibility is to examine some current trend(s) in alliances or a recent change in policy that may impact alliance formation or structure, and see what impact it is likely to have going forward. I am also open to other ideas, but every group must clear their topic with me at least three weeks before their scheduled date to lead the class discussion.

You must submit a 1-2 page outline of your case and the learning points that should arise from discussing it by Friday, January 31. Submit your outline by email. I encourage you do this earlier than the 31st and to just send me an email with early stage ideas to get feedback well before the 31st.

Rather than lumping all these group-led discussions together at the end of the semester, we will spread them over the second half of the semester in order to create the best possible flow over a 15 week semester.

There will be two components to the first group project:

1. Leadership of the Discussion: I will evaluate how effectively you led the class discussion. Remember that this is NOT a presentation! You are leading a case discussion and need to facilitate the participation of your peers in the room. The entire team needs to be at the front of the room for the case discussion. 25% of the course grade.

2. Written case/teaching plan. On the day your group is to lead the discussion, you will turn in a 2-5 page write-up of your plan for leading the discussion. Sometimes discussions go a bit off course (not a surprise, I know), and in some instances this can be a good thing, so I want to see what your plan was and how you balanced sticking with the plan and adapting to class comments. Having a plan is a key component of generating a good discussion. Remember, cases are designed to create discussions that lead to a point that is more than the facts of the case; and your teaching plan should include clear learning points that the class will take away after the case. The teaching plan should be emailed to me before class AND bring me a hardcopy at the beginning of class the day you will lead the discussion. 15% of the course grade.

3. Peer assessment. Each team member will do a peer assessment for every other member of the team. The results of the overall peer evaluation, of which the peer assessment is a significant component, will be used to adjust the overall group grade—students doing more than their share of the work will get a bump while students not doing their share of the work will receive a lower grade.

Final Assignment — 20%

TBA

Weekly Schedule

(SESSION DATES & SPECIFIC CASES SUBJECT TO CHANGE)

|Session |Topics |Case |Additional |

| | | |Readings |

|January 18 |NO CLASS—Martin Luther King Jr Holiday | | |

|#1 January 20 |Set expectations, explain flow of class, begin discussing |None. |None |

| |alliance concepts we will cover. | | |

| |Discuss your expectations for the class. | | |

| |

|Module 1: The Basics of Collaboration: When to Ally and with Whom? |

|#2 January 25 |What are some of the main challenges alliances face? |Tata Starbucks |Hoang & Rothaermel (2016) |

| |How do firms assess the potential and risks of different possible| | |

| |alliance partners? | | |

| |How do firms plan for execution of the alliance? | | |

|#3 January 27 |What elements are important to consider when determining whether |Share Our Strength & |Hughes & Weiss (2007) |

| |two firms are a good fit? |American Express: Developing| |

| |How does this vary based on industry context and the mission of |Marketing Alliances (A) | |

| |the organization? | | |

| |When has an organization “outgrown” an alliance? Is this | | |

| |necessarily a bad thing? How do you handle it? | | |

|Friday, January 29 |TEAMS FINALIZED | | |

|#4 February 1 |The value-logic of collaboration |Google – Samsung Alliance |Capron & Mitchell (Contract |

| |When is collaboration better than doing it yourself? |(Two separate cases—both in |vs. Ally) |

| |We will compare two different approaches in the same industry as |Blackboard) | |

| |we look at Google’s relationship with Samsung and Microsoft’s |Microsoft/Nokia Alliance | |

| |relationship with Nokia. | | |

| |

|Module 2: Alliance Negotiation and Design |

|#5 February 3 |What role do contracts play in alliances and other |Discuss Mayer & Argyres |Mayer & Argyres (2004) |

| |inter-organizational relationships? |article. | |

|Friday, February 5 |CASE PROPOSALS DUE | | |

|#6 February 8 |How do we negotiate and structure an alliance? |Honda Rover (A) |Gomes-Casseres (2016) |

| |How do we deal with competition and cooperation, especially in an| | |

| |international context? | | |

| |ASSIGN DATES FOR STUDENT-LED CASES | | |

| |

|Module 3: Collaboration & Competition in Alliances |

|#7 February 10 |Collaboration and competition in the race for the autonomous car |GM & Lyft | |

| | |Google & Fiat | |

|February 15 |NO CLASS—President’s Day Holiday | | |

|#8 February 17 |How do we govern alliances over time? |Wintel (A) | |

| |How do we balance incentives that don’t always align? | | |

|#9 February 22 |What is an alliance capability and how can a firm develop it? |Discuss Dyer et al and |Dyer, Kale and Singh (2001) |

| |Why do so many alliances fail? What can firms do get better at |Kanter articles. |in SMR |

| |them? | |Kanter (1994) in HBR |

| |

|Module 4: Corporate Alliances with NGOs & PPPs |

|#10 February 24 |How should NGOs and other non-profit organizations influence |Starbucks and Conservation |Peloza & Falkenberg (2009) |

| |corporation behaviour? |International | |

| |What are some of the main issues facing corporate - non-profit | | |

| |alliances or JVs? | | |

|#11 March 1 |Public-Private Partnerships. How can corporations work |GlaxoSmithKline in Brazil: | |

| |effectively with government partners in ways that can provide |Public-Private Vaccine |Berrone et al (2017) |

| |mutual benefit? How much of what we know about alliances needs |Partnership | |

| |to be tweaked when your partner is a government agency? | | |

| |

|Module 5: Different Types of Collaboration |

|#12 March 3 |Crowdsourcing: A different kind of collaboration |TopCoder (A) | |

| |Ecosystems are getting a lot of attention and rightfully so as | | |

| |they are a particular kind of market and crowdsourcing the way | | |

| |TopCoder does it is a particular kind of collaborative challenge.| | |

|#13 March 8 |Guest Speaker: | | |

| |Morgan McKeown, Edwards Life Sciences and Key in Strategies LLC | | |

|#14 March 10 |VC – Start-up relationships: |Google – Uber | |

| |- Managing different incentives over time | | |

| |- Power dynamics | | |

|#15 March 15 |Dividing tasks among partners |General Electric and SNECMA |Mayer & Teece (2008) |

| |Problems of downstream conflict |(A) | |

| |Designing alliances in the aerospace industry | | |

| |What does it take to design effective collaboration? | | |

| |What role does the contract play in collaboration? | | |

|16 March 17 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

|#17 March 22 |Joint ventures as a vehicle for foreign expansion: opportunities |Shanghai General Motors: The|Bamford, Ernst & Fubini |

| |and challenges |Rise of a Late-Comer |(2004) |

| March 24 |NO CLASS—Cancelled to create Friday session | | |

|Friday, March 26 |INDIVIDUAL ASSIGNMENT #2 DUE |(No class—just assignment | |

| |(Submit via Blackboard by 5:00pm) |due) | |

|#18 March 29 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

| |

|Module 6: Alliances vs. Mergers & Acquisitions |

|#19 March 31 |When to acquire versus ally? |The Walt Disney Company and |Capron & Mitchell (Ally vs. |

| |Balancing the challenges of cooperation across firm boundaries |Pixar: To Acquire or Not to |Acquire) |

| |with post-merger integration issues and the challenges of running|Acquire | |

| |multi-business enterprises. | | |

|#20 April 5 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

|#21 April 7 |Why is post-merger integration so difficult? |Post Merger Integration at |Bourgeois & Patel (2009) |

| |A more detailed look at the challenges of determining how much to|Northrop Grumman IT | |

| |integrate and how to do it. | | |

|#22 April 12 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

|#23 April 14 |Acquisition rationale and post-merger integration |Amazon & Whole Foods |Amazon – WF HBR Article |

| |Must understand corporate goals for acquisition | | |

| |Considering how to integrate when the cultures of the acquirer | | |

| |and target are completely different | | |

|#24 April 19 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

|#25 April 21 |Student led case discussions (2): | |Readings to be distributed |

| | | |via Blackboard one week |

| | | |before class. |

|#26 April 23 |EXTRA THREE-HOUR FRIDAY SESSION: Alliances and M&A in the | |Readings to be distributed |

|FRIDAY |entertainment & technology sectors: | |via Blackboard one week |

|8:00-11:00 |(1) Student led cases (1-2) | |before class. |

| |(2) Comments on M&A and alliances in tech & entertainment | | |

| |(3) Guest speakers | | |

| |Kim Storin, CMO for RapidDeploy (recently VP of Worldwide | | |

| |Cognitive Systems for IBM) (Marshall MBA Class of 2006) | | |

| |Candice Lu, Founding Partner at OnPrem Solution Partners | | |

| |(Formerly of Cognizant, SVC, and CBS) (Marshall MBA Class of | | |

| |2003) | | |

| |Delaney Voogd, OnPrem (Marshall MBA Class of 2018) | | |

| |

|Wrap up |

| #27 April 26 |Putting it all together – the course, Marshall and the MBA |Discussion and course |None |

| |experience. (optional) |review. | |

| April 28 |NO CLASS—Cancelled to create Friday session | | |

|Final Exam Date |Individual Final Paper Due (To be submitted via Blackboard) | | |

|Mon, 5/10, 4pm | | | |

Readings in red text indicate that the article or case will be posted to Blackboard and is NOT in the course reader that is available from Harvard Business School Publishing.

Appendix I. MARSHALL GRADUATE PROGRAMS LEARNING GOALS

How MOR 565 Contributes to Marshall Graduate Program Learning Goals

|Marshall Graduate Program Learning Goals |MOR565 Objectives that|Assessment Method* |

| |support this goal | |

| | | |

|Learning Goal #1: Develop Personal Strengths. | | |

|Our graduates will develop a global and entrepreneurial mindset, lead with integrity, purpose and ethical | | |

|perspective, and draw value from diversity and inclusion. | | |

|1.1 Possess personal integrity and a commitment to an organization’s purpose and core values. | | |

|1.2 Expand awareness with a global and entrepreneurial mindset, drawing value from diversity and inclusion.| | |

|1.3 Exhibit awareness of ethical dimensions and professional standards in decision making. | | |

| | | |

|Learning Goal #2: Gain Knowledge and Skills. | | |

|Our graduates will develop a deep understanding of the key functions of business enterprises and will be | | |

|able to identify and take advantage of opportunities in a complex, uncertain and dynamic business | | |

|environment using critical and analytical thinking skills. | | |

|2.1 Gain knowledge of the key functions of business enterprises. |1, 2 |Individual |

| | |Assignments, Group |

| | |Project & Final Paper |

|2.2 Acquire advanced skills to understand and analyze significant business opportunities, which can be |1 – 4 |Participation, |

|complex, uncertain and dynamic. | |Individual |

| | |Assignments, Final |

| | |Paper |

|2.3 Use critical and analytical thinking to identify viable options that can create short-term and |1 - 4 |Participation, |

|long-term value for organizations and their stakeholders. | |Individual |

| | |Assignments, Final |

| | |Paper |

| | | |

|Learning Goal #3: Motivate and Build High Performing Teams. | | |

|Our graduates will achieve results by fostering collaboration, communication and adaptability on | | |

|individual, team, and organization levels. | | |

|3.1 Motivate and work with colleagues, partners, and other stakeholders to achieve organizational purposes.| | |

|3.2 Help build and sustain high-performing teams by infusing teams with a variety of perspectives, talents,| | |

|and skills and aligning individual success with team success and with overall organizational success. | | |

|3.3 Foster collaboration, communication and adaptability in helping organizations excel in a changing | | |

|business landscape. | | |

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