Question

Firms with a reputation for ethical behavior in strategic alliances are likely to have more opportunities to form cooperative strategies than will companies that have not earned this reputation. What actions can firms take to earn a reputation for behaving ethically as a strategic alliance partner?

Answer 1

The firms can earn a reputation for behaving ethically by developing a trustworthy relationship with the partner. Though there would be a contract that explains the terms and conditions of partnership, the contract may not cover all the situations. The lack of terms may lead to uncertainty in certain situations, but the firm should act in the best interest of the partnership and help in opportunity maximization. The partners should help each other in utilizing value creation opportunities by sharing the resources and capabilities. The firms should show positive behavior in all the circumstances to develop trust and earn reputation for ethical behavior. They should avoid acting for own interests even if their actions are not monitored. There are more chances of gaps in the international contracts in terms of cultural, political, trade policies etc. The firms should help each other to overcome these differences and create maximum value for the partnership.