Final answer:
Firms collaborate in a cooperative strategy, and several competing corporations might join together due to common benefits, such as strength in numbers, shared industry issues, and favorable governmental policies. Corporate mergers, which can be lateral or involve acquisitions, also lead to firms operating under common ownership.
Step-by-step explanation:
The means by which firms collaborate to achieve a shared objective is called a cooperative strategy. When competing corporations join together in an association, it is often because:
- there is often strength in numbers.
- they often have common issues that may affect an entire industry.
- they can all benefit from governmental policies
All of the above reasons can motivate several competing corporations to collaborate. Additionally, corporate mergers are a related concept where two private firms join to become one. This can be through a merger, where firms of similar sizes combine, or through an acquisition, where one firm buys another. Antitrust laws play a role in regulating these mergers to prevent unfair competition.