Final answer:
Joint ventures and tactical alliances are effective in establishing long-term relationships and transferring tacit knowledge between firms.
Step-by-step explanation:
Joint ventures are effective in establishing long-term relationships and transferring tacit knowledge between firms. In a joint venture, two or more firms come together to form a separate entity, combining their resources, expertise, and risks to achieve a common goal.
For example, a technology company partnering with a manufacturing company to develop and market a new product is an example of a joint venture.
Tactical alliances are also effective in achieving the same purposes as joint ventures but without the formation of a separate entity. In tactical alliances, companies cooperate in specific areas, such as research and development, marketing, or distribution, to achieve mutual benefits.
Outsourcing arrangements and nonequity alliances may not be as effective in establishing long-term relationships or transferring tacit knowledge between firms as joint ventures or tactical alliances.