Sharing competences in strategic alliances: a case study of the Cosan and Shell biofuel venture

In a competitive world, the way a firm establishes its organizational arrangements may determine the enhancement of its core competences and the possibility of reaching new markets. Firms that find their skills to be applicable in just one type of market encounter constraints in expanding their markets, and through alliances may find a competitive form of value capture. Hybrid forms of organization appear primarily as an alternative to capturing value and managing joint assets when the market and hierarchy modes do not present any yields for the firm's competitiveness. As a result, this form may present other challenging issues, such as the allocation of rights and principal-agent problems. The biofuel market has presented a strong pattern of changes over the last 10 years. New intra-firm arrangements have appeared as a path to participate or survive among global competition. Given the need for capital to achieve better results, there has been a consistent movement of mergers and acquisitions in the Biofuel sector, especially since the 2008 financial crisis. In 2011 there were five major groups in Brazil with a grinding capacity of more than 15 million tons per year: Raízen (joint venture formed by Cosan and Shell), Louis Dreyfus, Tereos Petrobras, ETH, and Bunge. Major oil companies have implemented the strategy of diversification as a hedge against the rising cost of oil. Using the alliance of Cosan and Shell in the Brazilian biofuel market as a case study, this paper analyses the governance mode and challenging issues raised by strategic alliances when firms aim to reach new markets through the sharing of core competences with local firms. The article is based on documentary research and interviews with Cosan's Investor Relations staff, and examines the main questions involving hybrid forms through the lens of the Transaction Cost Economics (TCE), Agency Theory, Resource Based View (RBV), and dynamic capabilities theoretical approaches. One focal point is knowledge "appropriability" and the specific assets originated by the joint venture. Once the alliance is formed, it is expected that competences will be shared and new capabilities will expand the limits of the firm. In the case studied, Cosan and Shell shared a number of strategic assets related to their competences. Raízen was formed with economizing incentives, as well to continue marshalling internal resources to enhance the company's presence in the world energy sector. Therefore, some challenges might be related to the control and monitoring agents' behavior, considering the two-part organism formed by distinctive organizational culture, tacit knowledge, and long-term incentives. The case study analyzed illustrates the hybrid arrangement as a middle form for organizing the transaction: neither in the market nor in the hierarchy mode, but rather a more flexible commitment agreement with a strategic central authority. The corporate governance devices are also a challenge, since the alignment between the parent companies in the joint ventures is far more complex. These characteristics have led to an organism with bilateral dependence, offering favorable conditions for developing dynamic capabilities. However, these conditions might rely on the partners' long-term interest in the joint venture.

Iceland's meltdown: the rise and fall of international banking in the North Atlantic

This paper shows how rapid privatization and liberalization of Iceland's small local banks around 2000, combined with well-developed crony relations among the elite, enabled a small group of financiers to leverage government-guaranteed deposits into a vast wave of mergers and acquisitions abroad, and redistribute enough of the profits back home to make the economy boom. Negative policy feedback loops were systematically undermined. The incoming left-wing government, with IMF support, has managed to protect the bulk of the population from the worst of the effects.

Avaliando os impactos microeconômicos das fusões e aquisições nas indústrias de energia no mundo: uma análise para a década de 90

Microeconomic impacts of the mergers and acquisitions of energy industries in the World: an analysis for the 1990's. The energy industries have witnessed a significant growth of global mergers and acquisitions (M&A´s) process in the 1990´s. According to Unctad statistics, the total amount of global M&A deals (domestic and cross borders) on the electric, oil and gas sectors has recorded US$ 329 billions on the 1990-1999 period. The present paper sheds light on M&A process occurred on the energy industries during this period and, based on a sample of 248 transactions carried out by 18 big energy enterprises, develops an empirical microeconomic analysis about the impacts of these transactions over the performance of the firms involved. Overall, the results show significant improvements on the firms' performance after M&A operations, regarding the following variables: sales, net profits, assets, dividends, and, to a less extent, the ratio (net profits/sales).

A Comparison of Radiation Dose Between Standard and 3D Angiography in Congenital Heart Disease

Background: The use of three-dimensional rotational angiography (3D-RA) to assess patients with congenital heart diseases appears to be a promising technique despite the scarce literature available. Objectives: The objective of this study was to describe our initial experience with 3D-RA and to compare its radiation dose to that of standard two-dimensional angiography (2D-SA). Methods: Between September 2011 and April 2012, 18 patients underwent simultaneous 3D-RA and 2D-SA during diagnostic cardiac catheterization. Radiation dose was assessed using the dose-area-product (DAP). Results: The median patient age and weight were 12.5 years and 47.5 Kg, respectively. The median DAP of each 3D-RA acquisition was 1093µGy.m2 and 190µGy.m2 for each 2D-SA acquisition (p<0.01). In patients weighing more than 45Kg (n=7), this difference was attenuated but still significant (1525 µGy.m2 vs.413µGy.m2, p=0.01). No difference was found between one 3D-RA and three 2D-SA (1525µGy.m2 vs.1238 µGy.m2, p = 0.575) in this population. This difference was significantly higher in patients weighing less than 45Kg (n=9) (713µGy.m2 vs.81µGy.m2, P = 0.008), even when comparing one 3D-RA with three 2D-SA (242µGy.m2, respectively, p<0.008). 3D-RA was extremely useful for the assessment of conduits of univentricular hearts, tortuous branches of the pulmonary artery, and aorta relative to 2D-SA acquisitions. Conclusions: The radiation dose of 3D-RA used in our institution was higher than those previously reported in the literature and this difference was more evident in children. This type of assessment is of paramount importance when starting to perform 3D-RA.

Os fluxos de IDE no Brasil nos anos 1990: uma revisão de literatura à luz das transformações em curso

The flows of foreign investments in Brazil starting from the 1990s have called attention due to the magnitude of the invested value, the prevalence of properties acquisitions as a preferential way of carrying out these investments, and for the primacy of the operations involving rivals companies. This article searches for an explanation for the cycle of foreign direct investment flows, which is happening in Brazil. Arguments were reconsidered on the existence of sole assets and the advantages of property and control as a basis for carrying out overseas investments, and to explicit their link with the M&As.