Boeing's Alliance with Foreign Partners Research Paper

Boeing's Alliance with Foreign Partners - Research Paper Example Because of the divergence in cultures of the two economies, the same job is performed differently in various cultural and national settings. However, the art to survive in a new market setting is designated as adaptability. Ultimately, the need to change compels an organization to alliance with local firms because they have the cultural awareness about a particular market environment. On the other hand, firms go into partnerships to acquire a novel technology as well. International airline companies, such as Boeing, are doing business in the international setting when in other industries this practice was considered as an impractical one. Therefore, these organizations are well aware of the strategic importance of an alliance, especially in a foreign market. It is imperative to modify the organizational structure and culture according to the situation of a market in which the organization is operating. An important reason for an alliance is to outsource a practice, which an organizat ion cannot perform adequately well or economically. Various organizations outsource the hiring function in a foreign market to a local consultancy because of its lack of knowledge about the educational standards prevailing in the alien market (Elmuti & Kathawala, 2001). The purpose of Boeing’s extensive alliances is based on developing a next generation technology by partnering with various firms, thus pooling resources to expedite the developmental process. An alliance could be defined as a strategic decision of two or more firms under which they have to collaborate their resources to achieve some common objectives or goals. Main reasons of this kind of decision are the need to understand a foreign market culture or advancement in the technological capabilities of an organization. Similarly, organization commits to an alliance to gain a condition called synergy (Pyke & Johnson, 2002) which allows different organizations to benefit from various capabilities and resources of e ach other, and attain a common goal (Gomes-Casseres, 2003). Organizations develop strategic alliances to forego the extra value chain costs; therefore, they hire other firms to do these tasks. For instance, Boeing fabricated a contract with Tata companies in India to produce engines for their aircrafts, and this decision was taken to reduce the cost of production, because Indian rupee is significantly low in comparison with the US currency. Boeing, therefore, managed to gain a large scale cost advantage by this decision. Boeing established collaboration with Ford in terms of nanotechnology. Moreover, Boeing and Airbus are working to develop an aircraft with aerodynamics, which would be able to make it efficient in terms of fuel consumption, with its modified structure (Micheal, 2002). Boeing is busy in the joint struggle with Lockheed Co. to develop an advanced rocket, designed to explore the secrets of space (Beighley, 2007). Boeing is also trying to develop aerospace technology th rough working together with Japanese firms; however, the main hindrance on the way to success for this venture is the divergence between the cultures of the people working on this project (McGuire, 2007). Japanese are holding the key influence during the execution of this venture because of their technological knowledge; therefore, the Americans have to cope with the way Japanese work. It is important to note that Japanese