1 CHAPTER 1 SCOPE OF THE STUDY 1.1 INTRODUCTION ...

enable organisations access to greater resources, including specialised staff andtechnology. Joint ventures have a further attribute of being flexible, through for examplebeing established for a limited life span, or to only cover part of what the organisationdoes, thus limiting both an organisations commitment and business exposure. Thedisadvantages of Joint Ventures include not only the time and effort taken to build theright relationship, but also the fact that partnering with another business can bechallenging. Embarking on a Joint Venture can also represent a significantreconstruction to an organisation’s business. However favourable a joint venture maybe to an organisation for growth, it needs to fit with the firms overall business strategy(Emery & Associates, 2007).• Equity Strategic AllianceThe second type of strategic alliance is that of an equity strategic alliance, whereby twoor more forms own different percentages of a company they have formed, by combiningsome of their resources and capabilities (Ireland, Hoskisson & Hitt, 2009:248). Pekarand Marc (2009) state that Equity Alliances can be classified into two general types.The first involves partial acquisitions, where a company purchases a minority equitystake in another company, while the second incorporates cross-equity transactions,where each partner becomes equity alone.According to Pekar and Marc (2009) there has been a dramatic increase in equitybasedalliances. Since 2000, the numbers of acquisitions was said to have declined by65 percent, while equity alliances continued to grow. A number of forces are reported tobe driving equity-based alliance formations. These forces include the fact thatbusinesses have long blurred the boundaries between competition and cooperation. Inthe US and Europe, cartels were said to have carved up important markets for much ofthe last century, while in Asia, companies have long been bound together by crossshareholdings.72