1. 1 Chapter 10 Instructor Shan A. Garib, Winter 2013

2. 2 Objectives  Partner companies may have different needs and objectives  Communication difficult because of distance  Need communication plan to communicate goals and priorities  b/c of business risk, partners must monitor each other’s performance  Must have a plan to resolve any conflict as well How to manage and monitor partnerships Strategies to motivate partners and conflict resolution

3. 3 Monitoring Performance  Measurement 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

4. 4 Monitoring Performance  Measurement 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

5. 5 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

6. 6 Partner Development  Partners 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

7. 7 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

8. 8 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

9. 9 Partner Development  A 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 Motivation  Rewards and incentives easiest and effective way to develop a sense of loyalty to partnership

10. 10 Motivation  Inlcudes financial and non financial rewards  Recognized individual success leads to company success  When individual success is rewarded company goals become personal goals  Key is to be clear on responsibilities and expectations accompanied by evaluation procedures and unambiguous milestones  Employees have input on realistic targets  Motivational 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

11. 11 Conflict Resolution  willingness to be flexible important to CR  Conflict avoided with clear list of responsibilities Early recognition of conflicts  Resolve at earliest, least formal stage  During partnership phase all conflicts should be anticipated  Type 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 larger Internal Resolution ◦ Establish solid lines of communication first ◦ More success if flxible, tolerant, patient and aware of dicision making process of the country operating in

12. 12 Conflict Resolution  Internal 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 3 rd 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