Review of “An Overview of Strategic Alliances” (Elmuti, D & Kathawala, Y.)
from Management Decision
This week’s reading assignments gave us insights on how an alliance imitates a marriage,
although Kanter is careful to use the neutral designation of “setting up housekeeping”
(Kanter, 1994. p. 99). As corporate alliances are generally bound by binding legal
documents, the term matrimony is probably apt. We saw how this arrangement is
predicated on three levels of trust (weak, semi-strong and strong form) (Barney, J. &
Hansen, M., 1994) based on different levels of vulnerability.
But what happens when infidelity enters the picture? How do corporations respond when
one member seeks satisfaction outside of the bounds of that alliance wedlock?
Elmuti and Kathawala (2001) claim that the failure rate of strategic alliances might be
as much as 70%. After citing the reasons why corporations enter into alliances (growth
strategies, access to new technology, cost sharing and competitive advantages), the
authors take an unromantic look at the causes leading to the demise of the alliances. They
set ten years as the typical threshold for most corporate alliances, noting that most fail
because of one or more of the following factors (which I am here paraphrasing to fit the
marriage metaphor):
- Our chemistry doesn’t work – A clash of cultures, or perhaps the partners hail from
different social classes
- I don’t trust you – One partner is not communicating, leading to despondency and
trust issues in the other.
- We’re going in different directions – Mismatched goals for the relationship.
- You cheated on me – One company takes advantage of the partner’s commitment
and gets involved with a competitor.
- You’re not carrying your weight – One company is doing all the work.
- I can’t handle your friends – One company has business relationships that don’t
mesh with the partner.
- The sex isn’t great – One member’s performance doesn’t measure up.
- You’re just using me – One company uses the relationship for competitive
advantage over the other.
Interestingly, in their analysis of why alliances fail, the authors cite the case of Publicis
Communication and Foote, Cone and Belding (FCB), an alliance invoked as a shining
success in Kanter’s work. Kanter, of course, could not have known that three years after
her writing, the alliance would eventually succumb to the Franco-American cultural
obstacles that they’d so valiantly survived at the time of her study. “The venture
officially ended . . . after bitter and expensive divorce proceedings” (Elmuti, D. and
Kathawala, Y., 2001, p. 209).
In the end, as in marriage, it all comes down to communication. The partners must
express their wants and needs. Doubts and insecurities must be overcome, whether
through more face time or binding contracts. The partners must maintain a shared vision
of where the relationship is heading. In times of conflict, counseling is advisable (i.e. an
integrator or mediator). In the end, many alliances fail because the participants entered
into the partnership out of haste or without a clear understanding of the other’s corporate
personality.
Given the obstacles, one wonders if these corporate alliances are worth it. Marriage
rates may be falling, but the authors predict that corporate alliances will become more
the norm than the exception in the changing international economy. “Firms will need to
expand into the expanding global markets in order to economically survive.”
______________
References
Elmuti, D. & Kathawala, Y. (2001) “An Overview of Strategic Alliances.” Management
Decision, 39 (3) pp. 205-217.
Kanter, R. (1994) “Collaborative Advantage: The Art of Alliances.” Harvard Business
Review pp. 96-111.
Barney, J. & Hansen, M. (1994) “Trustworthiness as a Source of Competitive
Advantage.” Strategic Management Journal, 15. pp. 175-190.
Sunday, June 10, 2012
Saturday, June 9, 2012
Week 4 Post by Phillip Cortez
Think about prime time television viewing for a moment. A typical weekday line-up between 6 and 10 pm could include four half-hours shows and two hour-long series. Considering that different shows are broadcasted on different days, it's easy to see that in order for a network to complete a full line-up of programming, collaboration between content providers and the broadcaster is a must.
This scenario came to mind when discussing the maintaining of international alliances, as content providers for US television networks do not always stem from the continental 50 states. Much of the television content we consume comes from Canada as well as overseas (The Office, America's Got Talent, etc.). In the world of Spanish language television, the need to collaborate and maintain international alliances is even greater.
When looking at the 7 key issues in Alliance Management, we find that there are three strategic goals behind the logic of Collaboration: product exchange, corporate learning and market positioning (Gomes-Casseres, 2). This was applied to Rank Xerox and Fuji Photo in the reading - the 50/50 partnership between the two was a positioning strategy for Rank Xerox and a learning strategy for Fuji Photo (Gomes-Casseres, 3) - and this can easily be applied to the collaborative efforts between Telemundo Network and RTI Producciones (Productions) in Colombia.
As the second-largest producer of Spanish language content in the world, Telemundo Network has maintained strategic partnerships throughout Latin America. With the reading mind, the goals behind Telemundo's collaborative efforts is to acquire new content through product exchange and increasing its position in the global marketplace (Gomes-Casseres, 2).
According to the reading, there are alternatives to collaborating, such as "building the needed capability internally" (Gomes-Casseres, 4). In Telemundo's case, this would mean having to produce the original content itself. While Telemundo has the capability to do this for 1 or 2 telenovelas at a time, it simply would not be able to accomplish this for 4 telenovelas at a time. These hour-long programs air 5 days a week in comparison to once a week for English language television, or the general market.
Another alternative to collaboration would be for Telemundo to actually purchase the content like other networks might. Again, for hour-long programs that run 5 days a week, the network would prefer to be more involved with the content and have more control. So much rides on these programs (ratings, revenue, relevance) that collaboration is essential.
Reference
Gomes-Casseres, (1993). "Managing International Alliances: A Conceptual Framework." Harvard Business School. pp. 1-20.
This scenario came to mind when discussing the maintaining of international alliances, as content providers for US television networks do not always stem from the continental 50 states. Much of the television content we consume comes from Canada as well as overseas (The Office, America's Got Talent, etc.). In the world of Spanish language television, the need to collaborate and maintain international alliances is even greater.
When looking at the 7 key issues in Alliance Management, we find that there are three strategic goals behind the logic of Collaboration: product exchange, corporate learning and market positioning (Gomes-Casseres, 2). This was applied to Rank Xerox and Fuji Photo in the reading - the 50/50 partnership between the two was a positioning strategy for Rank Xerox and a learning strategy for Fuji Photo (Gomes-Casseres, 3) - and this can easily be applied to the collaborative efforts between Telemundo Network and RTI Producciones (Productions) in Colombia.
As the second-largest producer of Spanish language content in the world, Telemundo Network has maintained strategic partnerships throughout Latin America. With the reading mind, the goals behind Telemundo's collaborative efforts is to acquire new content through product exchange and increasing its position in the global marketplace (Gomes-Casseres, 2).
According to the reading, there are alternatives to collaborating, such as "building the needed capability internally" (Gomes-Casseres, 4). In Telemundo's case, this would mean having to produce the original content itself. While Telemundo has the capability to do this for 1 or 2 telenovelas at a time, it simply would not be able to accomplish this for 4 telenovelas at a time. These hour-long programs air 5 days a week in comparison to once a week for English language television, or the general market.
Another alternative to collaboration would be for Telemundo to actually purchase the content like other networks might. Again, for hour-long programs that run 5 days a week, the network would prefer to be more involved with the content and have more control. So much rides on these programs (ratings, revenue, relevance) that collaboration is essential.
Reference
Gomes-Casseres, (1993). "Managing International Alliances: A Conceptual Framework." Harvard Business School. pp. 1-20.
Friday, June 8, 2012
Brian Bleau - week four
Why did China Benefit from a Joint Venture Policy? A
Case Study of Shanghai
In Bishop’s (2007) case
study, he begins the article by describing ways that the Chinese government
promoted the advance of technology and business practices within the country. Government
regulations required that “technology introduced by foreign partners should be
advanced and ‘fit China’s needs,’” (Bishop, 2007, p. 93) a strategy that echoed
Gomes-Casseres’ (1993) counsel that selecting alliances that minimize risk and
maximize benefits is key to a successful alliance. An example of this point is Wal-Mart’s joint venture with Bhatri, which introduced the American
mega-corporation’s superior IT and supply chain management capabilities to India
in exchange for an opportunity to break into the country’s emerging organized retail
network (Bose, 2012).
The Chinese government also
enacted a law that required that joint ventures had to contribute to
“developing the (Chinese) economy and raising technology levels” (Bishop, 2007,
p. 93). By implementing these laws and others, the government, in effect, was
able to promote developmental, beneficial alliances while decreasing the
potential for corruption and foreign “rent seekers,” supporters who were given a chance to own a
piece of the market by crooked government officials (Bishop, 2007).
Bishop (2007) asserts that a
large number of Chinese firms engage in joint ventures to acquire technology, business
and training expertise, and tax incentives, and according to a study that included
interviews with 20 joint venture companies, that the Chinese succeeded in doing
so. But this was just the beginning of Shanghai reaping the true benefits of
joint ventures with foreign partners (Bishop, 2007).
Further-reaching benefits
are gained when the knowledge collected by local firms is dispersed throughout
the city and eventually the country. This is accomplished in a variety of ways:
·
Involving local
suppliers in joint venture operations
·
Joint venture
employees leaving for other companies/starting their own firms and bringing their experience with them
·
Local companies
learning and imitating the technology and/or processes of the joint venture
(Bishop, 2007)
In addition, the Chinese
government implemented local content rules, which required that required a specified
percentage of joint venture product components were manufactured within the
country. These requirements had a profound impact on the economy as companies
like Shanghai Volkswagen (automotive industry) and Shanghai Bell (electronics
industry) were required to use 80 and 70 percent domestic parts, respectively.
Both companies used competitive bid processes, selected one supplier to partner
with and provided intensive training to ensure high quality standards. Equipped
with a higher level of business, marketing and technological understanding, these
suppliers were able to grow their own companies through the resources provided
by the joint ventures, sometimes becoming global forces themselves. Eventually,
local content rules were abandoned, but not before the positive effects had
dissipated throughout the country (Bishop, 2007).
Bishop’s (2007) three main
reasons why Shanghai firms have been successful learning from joint venture
partners:
1.
“Shanghai has
traditionally had considerable exposure to the outside world compared to many
other parts of China” (Bishop, 2007, p. 97).
2.
In Shanghai,
foreign companies are spread throughout the city, not isolated like other
cities, and give locals the chance to observe and learn.
3.
Since Shanghai
is a “showcase for China to the rest of the world,” (Bishop, 2007, p. 97) the
government has played a large role in ensuring that the city’s infrastructure
adheres to world standards.
Although China has since
joined the World Trade Organization (WTO) and joint ventures have declined, it
has realized its goal of creating more advanced local firms (Bishop, 2007) and
achieving self-sufficiency, one of Gomes-Casseres’ (1993) alternatives to
collaboration, through heightened training and improved business practices learned
from carefully selected foreign partners. These partners serve not only as
teachers, but agents for change within the Chinese economy and others like it in
exchange for a chance to breach tightly-kept, “sleeping giant” markets capable
of transforming their businesses as well.
References
Bishop, B. (2007). Why did China benefit from a joint venture policy? A case study of Shanghai. China & World Economy, 15, 89-103.
Bose, I. (2012). Wal-Mart and Bharti: Transforming retail India. Asia
Case Research Center, 1-18.
Gomes-Casseres, B. (1993).
Managing international alliances. Harvard
Business School, 78-97.
Thursday, June 7, 2012
Tuesday, June 5, 2012
Week 3 Post By: Jayson Paretts
I apologize for my
late post this week, but as I have now explained to Dr. Pade there are
mitigating circumstances I am dealing with, so I appreciate any and all
understanding as I am going through a rough time at the moment.
Now, back to the
reason I am here and the fun stuff:
I really enjoyed the
study of Gore and Associates for this week.
I think the entire argument behind being a “team player” in this model
of business is fascinating. The
structure of the organization and the way workers are encouraged to work for
rewards is a unique system in my view and one that other companies should adopt
as a model if they had the sense to do so.
This
discussion reminds me of a friend of mine, his name is Mike and he works for
Cablevision in New York. He is a manager
in the organization and oversees a sizable tech based staff. I was talking with him the other day and I
usually discuss how I’m doing in my studies and we got to talking about the
Gore model for business and the articles I have read about it.
He
was really taken with this because he told me that at Cablevision they promote
a similar work model as the one that I was discussing from Gore. Especially, workers having autonomy and being
rewarded for a job well done.
We both
wondered if it is possible that Cablevision may have even copied its practices
from Gore because of the really unique amount of similarities.
Even
if it is a unique business structure unto itself at Cablevision with it not
having anything to do with Gore at all, I still think it is relevant to point
out in our discussion of this week’s topic because of the compelling nature of
it.
Mike
and I both agreed this type of business model really works very well, and he
has the happy employees to prove it. So,
all in all, it was a nice opportunity to talk to someone who is a high ranking
manager at a large company located in New York City who not only could relate
to what I am studying but he was able to provide first hand insight into it as
well.
Monday, June 4, 2012
Sunday, June 3, 2012
Week 3 post by Leslie - Interview with Citrix Systems UX Designer
For this week's application assignment, I interviewed Patrick Kovacich, a lead user experience designer at Citrix Systems. I wanted to investigate his company's organizational structure to determine whether the realities of that structure reflect the expectations established in our readings.
LW: Please tell us where you work and what you do. How do you fit in to your company’s organizational structure?
LW: How is Citrix structured, generally speaking? Are org charts used to define relationships, or is there a less formal approach?
LW: And how is workflow managed from a structural perspective? What divisions are used to organize people or the tasks they perform?
LW: What’s your impression of the success (or shortcomings) of the structure you've just described?
LW: Can you provide a specific example of one of the problems you just described?
LW: Has Citrix's organizational structure always been what it is today, or has it evolved in your time with the company?
LW: What information systems facilitate communication and coordination at Citrix?
[Patrick had to limit our interview to these six questions, which he took while catching a connecting flight at O'Hare.]
I've visited Citrix Online's offices in Santa Barbara, which exude an undeniable "West Coast" vibe. Flip flops seem to be the only dress code requirement, folks bring their dogs to work, and a quick foosball tournament between friends can occur at any hour of the day. This laid-back atmosphere, along with the company's penchant for hiring the young, creative, and tech-savvy, had me convinced that Citrix's structure would more closely resemble the horizontal plateau of W. L. Gore & Associates (Townsend, 2000) than the strict, centralized hierarchy of Oracle Corporation (Daft, 2007). It seems the truth is actually somewhere in the middle.
Mr. Kovacich describes a "hybrid structure" that "combines characteristics of various approaches tailored to specific strategic needs" (Daft, 2007, p. 120). For instance, he explains that the production-level engineering associates near the bottom of the organizational structure operate in a fairly horizontal environment with a high level of autonomy. Yet the company's leadership follows a much stricter hierarchical pattern, and other departments -- Mr. Kovacich cites marketing as an example -- are vertically organized from top to bottom. Daft observes that this marriage of functional and horizontal structures is a "hybrid approach that is increasingly used today" (2007, p. 122).
A hybrid structure is subject to the relative weaknesses and advantages of each component structure (Nohria, 1995). For instance, the horizontal structure of Mr. Kovacich's production group engenders high employee morale, nurtures innovation, and increases agility, but it also creates an environment that limits "in-depth skill development" (Daft, 2007, p. 116) because everyone wants to grow and develop across multiple competencies. Kovacich suggests that the introduction of some more vertical decision-making processes might help his colleagues focus on "meeting organizational goals," (Daft, 2007, p. 102) a critical advantage of functional structure.
Citrix employs a number of vertical and horizontal linkages. While Authoria allows line-of-sight performance management, the company's "Wiki" pages and project tracking tools are information systems that facilitate easier horizontal collaboration (Daft, 2007). Mr. Kovacich also describes the ways in which Citrix uses both teams and task forces. Citrix prefers permanent project teams, perhaps because they "provide more horizontal information capacity" than other horizontal linkages (Daft, 2007, p. 99).
My interview with Mr. Kovacich crystallized the overall theme of the week's readings: no single organizational structure is free of flaws; instead, each has inherent advantages and disadvantages. Even if a structure seems ideal to support a particular company's organizational strategy, this evaluation should be revisited regularly and tested for "systems of structural deficiency" (Daft, 2007, p. 123).
References
Daft, R. (2007). Fundamentals of organizational structure. In Organization Theory and Design (9th Ed., pp. 88-125).
Nohria, N. (1995, June 30). Note on organizational structure [Case no. 9-491-083]. Boston, MA: Harvard Business School Publishing.
Townsend, D. R., & Harder, J. (2000). W. L. Gore & Associates [Case no. UVA-OB-0700]. Charlottesville, VA: Darden Business Publishing.
LW: Please tell us where you work and what you do. How do you fit in to your company’s organizational structure?
PK: I work for Citrix Systems, Online Services Division (formerly known as Citrix Online) as a user experience designer for our collaboration product offerings. [LW: Many of you are familiar with these products, which include GoToMeeting, GoToMyPC, GoToTraining, and GoToWebinar.] I am a design lead, meaning I bridge communications and planning between our engineering department and our product department, merging product market requirements with engineering realities in order to create the best possible experience for the end user.
Within the organizational structure, I am a production-level team member, but I also work on roadmaps and planning with stakeholders throughout the hierarchy.
Within the organizational structure, I am a production-level team member, but I also work on roadmaps and planning with stakeholders throughout the hierarchy.
LW: How is Citrix structured, generally speaking? Are org charts used to define relationships, or is there a less formal approach?
PK: Org charts do exist for HR reporting, but in practice production teams work in a fairly flat manner and each individual has a large amount of autonomy. As you go up the chain to executives, the hierarchy becomes more rigid.
LW: And how is workflow managed from a structural perspective? What divisions are used to organize people or the tasks they perform?
PK: Most of the labor is distributed to departments according to skill set. Many of those departments are related; for example, the UX [user experience] and QA [quality assurance] departments are part of the blanket engineering group.
There are some ad hoc skunkworks-type teams, but these are usually created to pilot processes or ideas and then hand their work over to a larger team when it proves viable. On the other hand, many multi-disciplinary teams remain together for extended periods, from inception to release and even into legacy support.
There are some ad hoc skunkworks-type teams, but these are usually created to pilot processes or ideas and then hand their work over to a larger team when it proves viable. On the other hand, many multi-disciplinary teams remain together for extended periods, from inception to release and even into legacy support.
LW: What’s your impression of the success (or shortcomings) of the structure you've just described?
PK: Autonomy is great for employee morale and allows for innovation to be nurtured, but can also lead to "pet projects" or conflicts among horizontal roles that drag out projects or waste vast tracts of time.
Learning as much as you can about different tasks and roles can lead to more resilience and flexibility within a team, but also often leads to decreased overall value in my experience. A preference for strong stables of specialized SMEs [subject matter experts] has served us quite well.
Learning as much as you can about different tasks and roles can lead to more resilience and flexibility within a team, but also often leads to decreased overall value in my experience. A preference for strong stables of specialized SMEs [subject matter experts] has served us quite well.
LW: Can you provide a specific example of one of the problems you just described?
PK: Sure. We have some people who have been with the GoToTraining team since the product was approved in about 2007. Version 1.0 was released in February 2010. It lacked some key features at release, and customer adoption has been slow-- which in turn makes prioritizing the addition of those features fiscally tough. It's a vicious chicken/egg problem.
Meanwhile, we have a team that sees GoToTraining as their "baby" but is really not providing the most value they could to the company with their time and prodigious talent. Disbanding that team and making a hierarchical decision about whether to support the product or not are two things our current structure has not allowed to happen, at our peril.
Meanwhile, we have a team that sees GoToTraining as their "baby" but is really not providing the most value they could to the company with their time and prodigious talent. Disbanding that team and making a hierarchical decision about whether to support the product or not are two things our current structure has not allowed to happen, at our peril.
LW: Has Citrix's organizational structure always been what it is today, or has it evolved in your time with the company?
PK: My experience has always been within the product and engineering side of the company. There has been a major shift toward a more horizontal structure that followed our adoption of the Agile software development processes. Horizontal collaboration is a key tenet of scrum/Agile.
In other areas of the company, there are still some well-established hierarchies that have become more rigid rather than less -- marketing, for example. The marketing hierarchy tightening is probably the result of new blood in key areas and an executive-level focus on short-term financial goals versus internal product diversification. Our finance and accounting departments operate roughly as they always have, as there have been no business drivers for them to change.
In other areas of the company, there are still some well-established hierarchies that have become more rigid rather than less -- marketing, for example. The marketing hierarchy tightening is probably the result of new blood in key areas and an executive-level focus on short-term financial goals versus internal product diversification. Our finance and accounting departments operate roughly as they always have, as there have been no business drivers for them to change.
LW: What information systems facilitate communication and coordination at Citrix?
PK: We use a tool called Authoria for tracking bonuses/goals and performance evaluations, but it is used maybe four times a year, even by managers. Almost all the rest of our tools are very flat, collaborative project management/progress monitoring tools.
Large blast email is still our common language, but more and more these communications contain links to JIRA tickets, Confluence wiki pages, or in the case of HR or marketing, SharePoint sites.
We used to use a tool called Version 1 which tracked all our projects company-wide and allowed deep visibility into individual team progress and project progress. This functionality has now been shifted over to JIRA, which also replaced our bug tracking system. One less thing to log into. This is a very open and transparent system, though I imagine it is not peered into all that often outside engineering.
Large blast email is still our common language, but more and more these communications contain links to JIRA tickets, Confluence wiki pages, or in the case of HR or marketing, SharePoint sites.
We used to use a tool called Version 1 which tracked all our projects company-wide and allowed deep visibility into individual team progress and project progress. This functionality has now been shifted over to JIRA, which also replaced our bug tracking system. One less thing to log into. This is a very open and transparent system, though I imagine it is not peered into all that often outside engineering.
[Patrick had to limit our interview to these six questions, which he took while catching a connecting flight at O'Hare.]
I've visited Citrix Online's offices in Santa Barbara, which exude an undeniable "West Coast" vibe. Flip flops seem to be the only dress code requirement, folks bring their dogs to work, and a quick foosball tournament between friends can occur at any hour of the day. This laid-back atmosphere, along with the company's penchant for hiring the young, creative, and tech-savvy, had me convinced that Citrix's structure would more closely resemble the horizontal plateau of W. L. Gore & Associates (Townsend, 2000) than the strict, centralized hierarchy of Oracle Corporation (Daft, 2007). It seems the truth is actually somewhere in the middle.
Mr. Kovacich describes a "hybrid structure" that "combines characteristics of various approaches tailored to specific strategic needs" (Daft, 2007, p. 120). For instance, he explains that the production-level engineering associates near the bottom of the organizational structure operate in a fairly horizontal environment with a high level of autonomy. Yet the company's leadership follows a much stricter hierarchical pattern, and other departments -- Mr. Kovacich cites marketing as an example -- are vertically organized from top to bottom. Daft observes that this marriage of functional and horizontal structures is a "hybrid approach that is increasingly used today" (2007, p. 122).
A hybrid structure is subject to the relative weaknesses and advantages of each component structure (Nohria, 1995). For instance, the horizontal structure of Mr. Kovacich's production group engenders high employee morale, nurtures innovation, and increases agility, but it also creates an environment that limits "in-depth skill development" (Daft, 2007, p. 116) because everyone wants to grow and develop across multiple competencies. Kovacich suggests that the introduction of some more vertical decision-making processes might help his colleagues focus on "meeting organizational goals," (Daft, 2007, p. 102) a critical advantage of functional structure.
Citrix employs a number of vertical and horizontal linkages. While Authoria allows line-of-sight performance management, the company's "Wiki" pages and project tracking tools are information systems that facilitate easier horizontal collaboration (Daft, 2007). Mr. Kovacich also describes the ways in which Citrix uses both teams and task forces. Citrix prefers permanent project teams, perhaps because they "provide more horizontal information capacity" than other horizontal linkages (Daft, 2007, p. 99).
My interview with Mr. Kovacich crystallized the overall theme of the week's readings: no single organizational structure is free of flaws; instead, each has inherent advantages and disadvantages. Even if a structure seems ideal to support a particular company's organizational strategy, this evaluation should be revisited regularly and tested for "systems of structural deficiency" (Daft, 2007, p. 123).
References
Daft, R. (2007). Fundamentals of organizational structure. In Organization Theory and Design (9th Ed., pp. 88-125).
Nohria, N. (1995, June 30). Note on organizational structure [Case no. 9-491-083]. Boston, MA: Harvard Business School Publishing.
Townsend, D. R., & Harder, J. (2000). W. L. Gore & Associates [Case no. UVA-OB-0700]. Charlottesville, VA: Darden Business Publishing.
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