Final answer:
An alliance can be preferable to a merger or acquisition when companies aim to cooperate on common issues, maintain separate identities, or reduce inherent risks, benefiting from strength in numbers, shared challenges, and favorable policies.
Step-by-step explanation:
Forming an alliance can be a better way of overcoming problems associated with mergers and acquisitions in circumstances where companies aim to navigate through common issues without fully integrating their operations, wish to maintain their corporate identity, or seek to minimize risks. Alliances can be less risky than mergers and acquisitions because they often do not require a full integration of operations, thus avoiding the complexities of merging organizational cultures, systems, and personnel, as well as regulatory hurdles.
Competing corporations might join together in an association for several reasons: (a) there is often strength in numbers, (b) they often have common issues that may affect an entire industry, and (c) they can all benefit from governmental policies. The downsides of alliances include a possible lack of commitment and resources compared to the total integration of mergers and acquisitions.