ABSTRACT
This chapter briefly discusses a third approach – the relational approach – which recognizes that many resources critical to an organization's success can come from outside the organization. Consequently, this approach stresses the importance of interfirm working in the form of business structures such as alliances, joint ventures, franchising arrangements and management contracts, all of which have become common in THE contexts. The decision as to which method of strategic development to adopt is critical to the success of strategy. The chapter considers internal (or organic) growth and then discusses the various mechanisms of external development: mergers and acquisitions and various forms of joint development involving differing types of collaborative arrangements. Finally, the chapter looks at ‘downsizing’ strategies such as demergers.
