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Chapter 10 Instructor Shan A. Garib, Winter 2013

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Objectives Partner companies may have different needs and objectivesCommunication difficult because of distanceNeed communication plan to communicate goals and priorities b/c of business risk, partners must monitor each other’s performanceMust have a plan to resolve any conflict as well

• How to manage and monitor partnerships• Strategies to motivate partners and conflict resolution

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Monitoring PerformanceMeasurement criteria

◦ To determine success you have to measure your partners performance

◦ Need to know the value of the partner, what they bring to table◦ When establishing a partnership you must agree what partners should

achieve, define performance criteria and develop a plan for measuring the criteria

◦ Quantitative performance criteria Sales at certain levels Profits over time Productivity increases/decreases Sales growth % mkt share ROI Levels of capital

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Monitoring PerformanceMeasurement criteria

◦ Qualitative performance criteria Customer loyalty to a product Company’s strategic position Perceived level of product quality Product recognition

◦ Performance measurement systems Consider:

Frequency of evaluations Who will perform the assessment Need plan to communicate results

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Partnership Communication◦ A communication plan contains:

Objectives – what will communication achieve? Messages – what info will be communicated? Audience - who will be communicated with? Schedule – when will communication take place? Method – what method will be used to communicate? EDI? Phone, web?

◦ Other plans Documentation plan – what docs are needed? Storage, format? Shared information plan – what info to be shared, how often? Reporting plan – how and when partners should report to each other

◦ Conferences Regular interaction is needed to monitor progress

ID potential problems Build team spirit

Most cost-effective way is conference calls

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Partner DevelopmentPartners must have:

◦ Understand the product/service◦ Ability to operate special equipment/technology used in the

production of goods and services◦ Ability to prepare required documentation

A partner development strategy must have the following stages:

◦ Orientation◦ Training◦ Mentoring◦ Performance Appraisal

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Partner Development

A partner development strategy must have the following stages:

◦ Orientation Process where partners understand the mission, purpose and vision of the

partnership Helps understand roles and tools used for responsibilities Ensures employees become motived and productive quickly Important in a JV b/c of different missions of each

Process that provides new employees with: Overview of venture’s mission and organizational structure Details of its operation Description of own responsibilities

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Partner Development

A partner development strategy must have the following stages:

◦ Training Learner must see immediate use of new skills acquired Training depends on:

# of locations where training is delivered # of employees to train The equipment/software for which training must be developed Training budget

◦ Mentoring Support for questions Use on-line forums as communication between partners

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Partner DevelopmentA partner development strategy must have the following stages:

◦ Performance Appraisal Effective way to improve performance Used to determine compensation and encourage professional

development Each company will have different criteria Used to ID strength and weaknesses and to guide personal and

organizational development Goals set should be ST and LT

MotivationRewards and incentives easiest and effective way to develop a sense of loyalty to partnership

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MotivationInlcudes financial and non financial rewardsRecognized individual success leads to company successWhen individual success is rewarded company goals become personal goalsKey is to be clear on responsibilities and expectations accompanied by evaluation procedures and unambiguous milestonesEmployees have input on realistic targetsMotivational strategies:

◦ Provide healthcare for poor◦ Offer larger shares of business for success◦ Provide employee housing◦ Free travel◦ Update offices of partner◦ Invest in local environment◦ Provide childcare facilitites◦ Offer flexible working schedules/ gym/ snacks

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Conflict Resolutionwillingness to be flexible important to CRConflict avoided with clear list of responsibilities

Early recognition of conflicts Resolve at earliest, least formal stage During partnership phase all conflicts should be anticipatedType of conflict depends on size of company

◦ Large – internal conflict eg co-ordinating daily activities - underestimating what smaller companies can do

◦ Smaller – strategy not consistent with largerInternal Resolution

◦ Establish solid lines of communication first◦ More success if flxible, tolerant, patient and aware of dicision making

process of the country operating in

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Conflict ResolutionInternal Resolution

◦ Establish solid lines of communication first◦ More success if flexible, tolerant, patient and aware of decision

making process of the country operating in◦ No resolution then recourse in next step◦ Or set up CR board

Third Party dispute Resolution◦ Neutral third party to negotiate in serious disagreements◦ Problems with 3rd parties:

Have nothing at stake in partnership, might impose something not feasible or acceptable to either

Can alert competing firms there is a problem, negative publicity