Which of the following statements about equity alliances is true?Multiple choice question.They are more common than contractual, non-equity alliances.They result in weak ties between the partners.They are based on full ownership.They require larger investments than non-equity alliances.
Question
Which of the following statements about equity alliances is true?Multiple choice question.They are more common than contractual, non-equity alliances.They result in weak ties between the partners.They are based on full ownership.They require larger investments than non-equity alliances.
Solution
The correct answer is: "They require larger investments than non-equity alliances."
Here's why:
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Equity alliances are not more common than contractual, non-equity alliances. In fact, non-equity alliances are more common because they are less complex and require less commitment.
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Equity alliances do not result in weak ties between the partners. On the contrary, they often result in stronger ties because they involve a higher level of commitment and investment.
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Equity alliances are not based on full ownership. They are based on shared ownership, where each partner owns a part of the alliance.
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Equity alliances do require larger investments than non-equity alliances. This is because they involve a higher level of commitment and often require partners to contribute resources to the alliance.
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