The urge to merge. When corporations face competitive threats, they often turn to partnering strategies such as joint ventures, mergers, or acquisitions to improve their position. In the 1998 Handbook of Business Strategy, a book published by the Journal of Business Strategy, SMG Professor of Management Policy John Mahon and coauthor Richard McGowan explain why companies considering a partnership should evaluate their strategies with an eye to many kinds of scrutiny. Their criteria for weighing the advantages of mergers and acquisitions versus looser strategic alliances include:
Timing. "Mergers and acquisitions take a lot longer to complete than strategic alliances," says Mahon. "Because of that, there are more opportunities for them to be derailed." Timing also refers to the desired length of the partnership.
Location. Cultural as well as geographic distance can create obstacles in a merger, but may not matter as much in a simpler kind of partnership.
Government interest. "Any corporation contemplating partnership strategies needs to watch out for governmental interests and involvement," says Mahon. In the future, he adds, governments are likely to become even more intrusive.
Synergistic interest. A successful strategy will identify the concerned constituencies other than the firms involved, and communicate to them the deal's benefits. Building the Concorde allied France and England in a project beyond the capability of either country alone and one that benefited the economies of both nations.
The firm's political/social risk profile. Organizations produce goods and services considered either necessities or luxuries; over time, perceptions of these categories can change. "Tobacco wasn't always so heavily regulated," Mahon explains. "Over the past 25 years it has become more of a taboo product. The movement of tobacco firms into the food business is an example of their trying to balance their social and political risk portfolio, enhance their corporate legitimacy, and become associated with 'necessary' goods."
"Both governments and public interest groups are business watchdogs these days," says Mahon. "Choosing a form for partnerships, especially international ones, isn't just about what makes the most business sense. Companies must consider the political and social aspects as well."
Brain wave. Scientists have long sought to link areas of the brain to human behavior. In the 18th century, they used phrenology, the study of the shape of the skull based on the long discredited belief that it reveals character and mental ability. Today technologies such as functional magnetic resonance imaging (fMRI) let scientists accurately and noninvasively study how the brain functions while people are learning.
Using fMRI, Lucia Vaina, ENG professor of biomedical engineering and director of BU's Brain and Vision Research Laboratory, has discovered that the areas of the brain used in learning a visual task and those used in carrying it out are not entirely the same. The study recently appeared in the Proceedings of the National Academy of Science.
Subjects were asked to identify the predominant direction of movement in a field of dots, 80 percent of which move randomly, and 20 percent of which move only left or right. Subjects rapidly learned to discern the predominant direction -- within a few minutes they were able to go from almost chance to nearly 100 percent accuracy of response.