Which of the following best describes a core idea behind the informal institution-based view regarding alliances and acquisitions?
A) It is best not to jump on the alliance and acquisition bandwagon.
B) Alliances should be made with caution so that firms do not share important secrets.
C) Firms often follow one another, so if competitors begin aggressively seeking targets for alliances and acquisitions, then it is best to follow suit.
D) Firms copy one another naturally as a strategy to enhance their legitimacy, so alliances and acquisitions are a low-cost way of gaining this.

Question

Quizplus · Accepted Answer

The core idea behind the informal institution-based view is that firms copy one another naturally as a strategy to enhance their legitimacy, so alliances and acquisitions are a low-cost way of gaining this. This suggests that firms will often follow one another in pursuing alliances and acquisitions, even if there may be risks or downsides, in order to appear legitimate and keep up with their competitors. The informal institution-based view suggests that firms copy one another as a way of enhancing their legitimacy, and alliances and acquisitions are a low-cost way to achieve this. Therefore, firms tend to follow the lead of their competitors in seeking out alliances and acquisitions. Option A suggests a cautious approach, but does not address the core idea of the informal institution-based view. Option B focuses on the risk of sharing secrets, but does not address the idea of following the lead of competitors. Option C is closer to the correct answer, but does not highlight the importance of copying as a basic strategy for firms.

Which of the Following Best Describes a Core Idea Behind