Microsoft Opportunism Case Study

Control

Level of opportunism

The decision about the scope of activities involved in alliance behaviors depends mostly on the probability and cost of opportunistic behavior by alliance partners (Oxley and Sampson, 2004). Therefore, before choosing the control mechanism for a joint venture, it is essential to analyze the level of opportunism. The level of opportunism is mainly determined by factors such as leader/laggard relationships, distribution of value (Oxley and Sampson, 2004), and repeated ties (Wang and Zajac, 2007). In this case, the level of opportunism is claimed to be low and analysis is as below.

Microsoft’s main business is to developing, manufacturing and selling software, electronic, computers and services. Its best-known products

There is no doubt that both Microsoft and Nokia are large multinational corporation and are both leaders in the technological industry. Whereas concerning the alliance would take place in the industry of mobile phone, thus it is assumed that Microsoft is the laggard and Nokia is the leader. However, Microsoft’s competence in other field such as software (in this case applications and mobile system platform) and financial power are beyond Nokia. In conclusion, in the aspect of leader/laggard relationships, the level of opportunism for both companies would be relatively

(2014), there should be greater level of board involvement when: 1) the joint venture involves R&D activities; 2) the joint venture faces great environmental uncertainty. However, when there are great national cultural differences, the board involvement should be lower. In the case of Microsoft and Nokia, the main role of it is to develop and research on mobile phone, and the market and environment are uncertain because of the fierce competition and the fact that this is the first time they ally with each other. Moreover, as mentioned before, the cultural difference between Microsoft and Nokia is claimed to be large. Therefore, to sum up, the board involvement should be kept in a medium level with the advantage of both controlling and coordinating joint venture for parents and efficiency to give authority to local management (Reuer et al.,