12 strategic alliance
TRANSCRIPT
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AZRIN BIN MOHD DINQUANTITY SURVEYING DEPARTMENTKAED, IIUM
STRATEGIC ALLIANCE
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DEFINITION
An agreementbetween two or moreindividualsor entitiesstating that the
involved partieswill actin a certainway in orderto achievea common
goal. Strategic alliances usually makesense when the parties involved have
complementary strengths.
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TERMINOLOGY
Alliance In the private sector, these areLong-term purposefularrangements among distinct but
related organizations thatallow those firms to gain or sustaincompetitive advantage.An adoption of the private sector
model by civil societyorganizations would involve realvalue appropriation (money,time and influence) among theparties in the alliance.
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TERMINOLOGY
Coalition An umbrella termused to describe a
group of people ororganizationscoming together toachieve a specificgoal,usually of a politicalnature.
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TERMINOLOGY
Formal KnowledgeNetwork
A time-bound andpurpose-driven groupof expert institutionsworking together, tobuild each otherscapacity and develop
solutions for useoutside of thenetwork.
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ALLIANCE
It involves linked and commonprocesses necessary to ensure the
achievement of objectives; and
Real value appropriation (sharing offinances, time and channels ofinfluence) among the participatinginstitutions.
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ALLIANCE
Three key drivers
The need to bring more capacityto bear on its work
The need for critical mass in
order to have greater influence The need for new financing
models
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ALLIANCE: Features
Corporate management
real vested interest of the CEOs:
each hopes to gain strategicallyfrom the relationship;
joint ownership and co-managementof the relationship; and
risks and benefits identified,recognized and shared by all parties
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ALLIANCE: Features
Financial management
mechanisms put in placefor managing andreporting on the shared
investments and costs ofthe work.
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ALLIANCE: Features
Project management
greater scope and scale of
projects carried out incollaboration by the parties; and
planned interaction leading to
greater depth and intensity ofknowledge exchange andactions.
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ALLIANCE: Features
Communications management
common language todescribe the relationship;and
protocols for managingdelivery of knowledgeproducts and services of thealliance.
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ALLIANCE: Features
Staff management
incentives and rewardsystems for staff makingthe alliance work
(ensuring that allianceactivities are a priorityamong all parties).
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ALLIANCE: Features
Results management
ensuring common understanding
and ownership of the alliancesgoals and objectives; and
planning and monitoring the fullrange of projects and actions to
determine whether outcomes fromthe alliance activities have broaderreach and impact.
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SETTING-UP
Analyze history of inter-institutionalrelationships
Review organizational mandates and cultures
Define roles within the individualorganizations
Address potential operational challenges
Implement a monitoring framework to assessalliance performance
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RISKS
Two primary types
relational risk in partner cooperation
and performance risk in alliance
performance
Trust and control jointly determine one'sperceived total risk
Goodwill trust and competence trust
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FAILURES
Richard J. Chernesky Strategic alliances,Chernesky, Heyman & Kress PLL, 1996-2006
Poor project management executivesunderestimate how much time andenergy must be committed tomanaging multiple partner alliances
Strategic gridlock - unanticipatedconflicts in objectives, business plansand operations
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FAILURES
Richard J. Chernesky
Losing control of basic strategy -
partner ends up creating acompetitor
Focus on benefits to partners - whatthe other participant is obtaining
from the alliance
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FAILURES
Richard J. Chernesky
Poorly defined goals - failure to
agree upon specific goals andobjectives such as return oninvestment, market share, marketexpansion, cost containment, etc.
Poor partner choice - failure toselect the right partner
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