Final answer:
A functional arrangement for joint research to develop new products or services is called a Strategic Alliance, where partners share responsibilities and risks without forming a new legal entity.
Step-by-step explanation:
A functional arrangement in which the partners agree to undertake joint research to develop new products or services is known as a Strategic Alliance. This type of partnership involves sharing responsibility and risk among partners who may bring different skills to the table. Unlike a joint venture, which is usually a new entity created by two or more parties, a strategic alliance allows existing businesses to collaborate without forming a new business. This differs from a licensing agreement or a franchise agreement, where there is a specific legal framework and typically involves one party allowing another to use its brand, product, or services for a fee.