ITPEC IP October 2025 Question 82
ITPEC IP October 2025 — Question 82 of 100
Only statement II is a general disadvantage of an alliance — without acquiring control, a company has limited influence over its partner's decisions about shared resources.
An alliance preserves the legal and managerial independence of both parties. It generally needs less capital and causes less integration burden than an acquisition, but coordination, commitment, decision speed, and control can be weaker.
Answer (d)
Why not others:
- I is more characteristic of acquisition integration; an alliance normally does not require wholesale reform of the partner's organization
- III describes the large investment and financial impact commonly associated with acquisition, not alliance
Therefore choices containing I or III include non-disadvantages.
Key rule: Alliances trade ownership and control for lower investment, flexibility, and easier entry or exit.
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