The Alliance between General Motors and PSU Peugeot Citroen Essay

The Alliance between General Motors and PSU Peugeot Citroen - Essay Example This paper illustrates that competition is forcing rival firms to join hands for developing a better position in the market and also enhance their resource base. The number of alliances, partnerships, ventures, and mergers have increased in the last decade in the corporate sector. However, Hoffmann mentioned that creating alliances is a complex process which can also result in negative outcomes if the allies do not measure the variables of the process in a proper manner. General Motors and PSU Peugeot Citroen have created a customized approach for following up with their alliance plan and created a separate committee for members by selecting key personnel of both the organizations to manage the alliance activities. The researcher is a member of the committee and hence will reflect on the plans and activities being performed within the alliance.The alliance between General Motors and PSU Peugeot Citroen was formed mainly with the view of developing a better resource base for the opera tions of both the companies on the global scale. The strategic alliance between the companies is expected to build their organizational capabilities in response to the challenges faced by the firms in the global marketplace. One of the most crucial considerations which urge firms to engage in mergers and alliances is to reduce the cost of operations. The organizational processes related to the formation of an alliance are structured by the top management of the companies. In the case of GM and PSU Peugeot Citroen, Weinmann and Thomas mentioned that this alliance will lead to the union of the American and European automobile industry and enhance the scope of a production process for the firms as well as will create more options for the customers in all the marketing zones of the concerned organizations. In the context of specific objectives, GM is focused on designing new and innovative production process whereas PSU Peugeot Citroen will utilize the market base of GM for entering the major markets of Asia and America.   The planning stage of the alliance as reported in various media means has highlighted that organizational needs of the allies have been accurately shared and balanced by the firms. This has reduced the liability of the allies and also boosted the level of trust among the partners.