(Published in The Manila Times under the Managing for Society column, August 23, 2005)
FACED with pressure on all fronts to compete in this global economy characterized by lower barriers of entry, specialized and fragmented markets, and technological developments, a growing number of companies are pooling their resources to bring better products and services to the market at a faster, more flexible and more efficient manner.
Through these collaborative arrangements or partnerships, companies hope to share knowledge, skills, technologies, products, or markets with each other which would be too costly to develop alone. Partnering reflects an appreciation of the limited resources that companies have in gaining access to new markets, learning a new technology, or developing a new product.
Michael Cunningham, author of Partners.Com—How to Profit from the New DNA of Business, calls these arrangements as network partnerships—enabling a firm’s business model to form a business network of suppliers, buyers, customers, facilitators, trading centers, stores and others, resulting in more effective and efficient delivery of products and services to the market.
Naleduff and Brandenburger’s seminal book, Co-opetition, introduced the term “value net” to describe a network comprising a company, customers, suppliers, competitors and complementors, and the partnerships or interdependencies among them; and how this can create and deliver value to the entire network.
The benefits of partnerships to companies’ business performance have been well-documented in management and business literature. However, what managers perhaps fail to recognize are the indirect benefits of partnerships to society as a whole.
Through collaborative arrangements, companies are able to bring better products to consumers, thereby uplifting the quality of life of the general public. As an example, the standards that define how mobile phones “talk” to each other are defined through a collaborative arrangement among cellular phone and telecommunication equipment manufacturers; and now, people around the world enjoy the benefits of being connected.
Moreover, partnerships among companies capitalizing on each other’s strengths result in better service delivery to the general public. This is exemplified by the improvements in after-sales support activities of companies through the outsourcing of their call-center operations. This partnership between companies and call centers has lead to a far better handling of inquiry and complaint calls and, therefore, to customer satisfaction.
To be noted too is that partnerships result in cost efficiencies due to the pooling of resources among partnering firms to jointly learn new technologies and develop new products, which further leads to lower prices that obviously benefit the consumers. A clear example of this is the partnerships among top universities such as University of Melbourne, University of New South Wales, National University of Singapore, etc., that created Universitas 21 Global, which delivers online media-rich pedagogy at relatively lower prices—making world-class education available to students anywhere in the world.
Partnering firms, with their long-term relationships in collaborating for business results, can further enhance and strengthen their business partnerships by jointly engaging directly in socially responsible activities. Because one of the reasons why some companies do not invest in corporate social responsibility is limited funds, companies together with their partners can pool their resources to give something back to society, be it either a joint charitable undertaking or an environmental conservation program.
While the importance of partnerships among companies brings benefits to the partnering firms and society as a whole, companies are taking a more active role in the communities where they operate, forging partnerships not only with suppliers, customers and competitors, but also with educational institutions, nongo-vernment organizations, government agencies, religious organizations and other community-based organizations to address a wide variety of social and environmental issues.
By pooling their limited resources, community-based organizations and companies alike aim to address such pressing issues as education, environmental sustainability, poverty alleviation, and the like.
Companies can reap the benefits from community partnerships. According to the global organization, Business for Social Responsibility, “community partnerships are built on shared or complementary strengths of companies and their partners, and can involve one or more of the following activities: information exchanges, research, contributions of company personnel or resources, promotional efforts, and the development or strengthening of community services and capabilities. Benefits to companies include developing trust and goodwill in communities, securing or expanding market position, enhancing brand image, improving risk management, and attracting and retaining employees.”
The wisdom of partnerships between companies lies in the pooling of resources for business or CSR undertakings that indirectly or directly impact the society as a whole. Partnerships are not limited to companies but, more importantly, may be between companies and community-based organizations to help uplift society, while deriving business benefits as well for the partnering firms.
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Reynaldo Lugtu Jr. is a student in the Doctor of Business Administration Program and lecturer in management principles under the MBA program of the Graduate School of Business, De La Salle Professional School. He is an executive at an IT services company. He may be e-mailed at rlugtu2002@yahoo.com.
FACED with pressure on all fronts to compete in this global economy characterized by lower barriers of entry, specialized and fragmented markets, and technological developments, a growing number of companies are pooling their resources to bring better products and services to the market at a faster, more flexible and more efficient manner.
Through these collaborative arrangements or partnerships, companies hope to share knowledge, skills, technologies, products, or markets with each other which would be too costly to develop alone. Partnering reflects an appreciation of the limited resources that companies have in gaining access to new markets, learning a new technology, or developing a new product.
Michael Cunningham, author of Partners.Com—How to Profit from the New DNA of Business, calls these arrangements as network partnerships—enabling a firm’s business model to form a business network of suppliers, buyers, customers, facilitators, trading centers, stores and others, resulting in more effective and efficient delivery of products and services to the market.
Naleduff and Brandenburger’s seminal book, Co-opetition, introduced the term “value net” to describe a network comprising a company, customers, suppliers, competitors and complementors, and the partnerships or interdependencies among them; and how this can create and deliver value to the entire network.
The benefits of partnerships to companies’ business performance have been well-documented in management and business literature. However, what managers perhaps fail to recognize are the indirect benefits of partnerships to society as a whole.
Through collaborative arrangements, companies are able to bring better products to consumers, thereby uplifting the quality of life of the general public. As an example, the standards that define how mobile phones “talk” to each other are defined through a collaborative arrangement among cellular phone and telecommunication equipment manufacturers; and now, people around the world enjoy the benefits of being connected.
Moreover, partnerships among companies capitalizing on each other’s strengths result in better service delivery to the general public. This is exemplified by the improvements in after-sales support activities of companies through the outsourcing of their call-center operations. This partnership between companies and call centers has lead to a far better handling of inquiry and complaint calls and, therefore, to customer satisfaction.
To be noted too is that partnerships result in cost efficiencies due to the pooling of resources among partnering firms to jointly learn new technologies and develop new products, which further leads to lower prices that obviously benefit the consumers. A clear example of this is the partnerships among top universities such as University of Melbourne, University of New South Wales, National University of Singapore, etc., that created Universitas 21 Global, which delivers online media-rich pedagogy at relatively lower prices—making world-class education available to students anywhere in the world.
Partnering firms, with their long-term relationships in collaborating for business results, can further enhance and strengthen their business partnerships by jointly engaging directly in socially responsible activities. Because one of the reasons why some companies do not invest in corporate social responsibility is limited funds, companies together with their partners can pool their resources to give something back to society, be it either a joint charitable undertaking or an environmental conservation program.
While the importance of partnerships among companies brings benefits to the partnering firms and society as a whole, companies are taking a more active role in the communities where they operate, forging partnerships not only with suppliers, customers and competitors, but also with educational institutions, nongo-vernment organizations, government agencies, religious organizations and other community-based organizations to address a wide variety of social and environmental issues.
By pooling their limited resources, community-based organizations and companies alike aim to address such pressing issues as education, environmental sustainability, poverty alleviation, and the like.
Companies can reap the benefits from community partnerships. According to the global organization, Business for Social Responsibility, “community partnerships are built on shared or complementary strengths of companies and their partners, and can involve one or more of the following activities: information exchanges, research, contributions of company personnel or resources, promotional efforts, and the development or strengthening of community services and capabilities. Benefits to companies include developing trust and goodwill in communities, securing or expanding market position, enhancing brand image, improving risk management, and attracting and retaining employees.”
The wisdom of partnerships between companies lies in the pooling of resources for business or CSR undertakings that indirectly or directly impact the society as a whole. Partnerships are not limited to companies but, more importantly, may be between companies and community-based organizations to help uplift society, while deriving business benefits as well for the partnering firms.
----------------------
Reynaldo Lugtu Jr. is a student in the Doctor of Business Administration Program and lecturer in management principles under the MBA program of the Graduate School of Business, De La Salle Professional School. He is an executive at an IT services company. He may be e-mailed at rlugtu2002@yahoo.com.
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