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Strategic HR and Contract Management for Partnerships

Laurita M. JonesPowerPoint Presentation for Weeks 4-5 Assignment

January 25, 2016

The New HR: The Savvy Strategic Partner (DDBA – 8580 – 1)

Presentation Outline

Alliance as a Strategic Partnership Managing Strategic Alliance Partnerships Contract Management for Strategic Alliance Partnerships (Two

Slides) Strategic HR’s Role in Supporting Strategic Partnerships Key Elements for Strategic Partnership Contracts Learning Objectives Reference List

Alliance as a Strategic Partnership

An alliance is a long-term voluntary contractual agreement between organizations.

Strategic alliances, a form of strategic partnerships, have become the foundation for competitive strategy for many business entities (Tjemkes, Vos & Burgers, 2012).

Developing strategic relationships can enable corporations to achieve set goals that would otherwise be difficult to realize.

Although alliances are beneficial, many of the relationships fail due to corporation’s inability to effectively manage them (Sluyts, Matthyssens, Martens & Streukens, 2011).

To enhance alliance capabilities, corporations need to establish a good strategic model to effectively mange their alliance portfolio.

Managing Strategic Alliance Partnerships

The success rates of alliances are significantly low because managers are not sufficiently prepared to manage strategic partnerships (Tjemkes, Vos & Burgers, 2012).

Due to the high failure rates of strategic alliance partnerships, Tjemkes et al. (2012) created an Alliance Development Framework to help firms manage better their strategic partnerships and to realize alliance capability.

This framework provides a intelligible comprehension of the distinctive nature of strategic alliance management.

Through alliance capability, corporations can control knowledge on the alliance management process (Sluyts et al., 2011).

Alliance capability is the firms ability to manage its portfolio of alliances. Human resources as a strategic partner acquires the knowledge and skills needed to

help senior leaders of corporations achieve alliance capability through resource management capitalization (Lengnick-Hall, Lengnick-Hall, Andrade, & Drake, 2009).

Contract Management for Strategic Alliance Partnerships

Alliance contracts require the parties involved to work together in good faith, act with integrity, and to make best-for-project decisions (Malhotra & Lumineau, 2011).

As stipulated by the contract terms, the alliance participants work as a cohesive and collaborative team to address key project delivery matters.

The risk of project delivery are mostly managed jointly by each partnership member.

The decision for partnership contracting should be determinate on a strategic procurement analysis and the governance structure (Nielsen, 2010).

Contract Management for Strategic Alliance

Partnerships,Continued

Contracts provide the parties of a partnership with a way to coordinate expectations and efforts.

The coordination process can help alliance participants facilitate competence-based trust development (Malhotra & Lumineau, 2011).

A contractual strategic partnership agreement should involve trust judgments.

Trust judgments are two dimensional to include goodwill and competence.

Strategic HR’s Role in Supporting Strategic Partnerships

HR practitioners are well-versed with business strategy, and are integral partners in the strategic management process.

HR as a strategic partner can positively affect organizational performance and help firms establish and sustain superior performance through human and social capital (Buller & McEvoy, 2012).

Strategic human resources is essential to effective implementation of change efforts, such as forming and managing strategic alliances.

HR and HR activities are strategically important, because they are potentially valuable, atypical, difficult to replicate and replace, and they are vital to companies creating organizational capability through strategic partnerships to help ratify the corporations strategic goals (Buller & McEvoy, 2012).

HR professionals have the ability to help organizations enhance their strategic value and the value of HR practices by refining business competencies.

Key Elements for Contracts &

Contract Management

• Contracts for strategic partnerships should clearly state the governance structure (Nielsen, 2010).

• It is necessary for the procedural coordination mechanisms to align with stipulations of the contractual agreement.

• Formal contractual elements (both relational and contractual), such as goal and activity expectations, trust, information exchange, etc., are legally essential when forming strategic partnerships (Rai, Keil, Hornyak & Wullenweber, 2012).

• Strategic partnerships should be governed using strategies that substitutes relational governance for certain contractual governance mechanisms (Rai et al., 2012).

Learning Objectives

Alliances are a type of strategic partnership. Effective management of strategic partnerships is vital to the

success of the business venture. To enhance the success rates of an alliance or strategic

partnership, participants should enter into a contractual agreement that outlines specific governance factors.

Strategic HR practitioners possess the knowledge, skills, and ability to help firms enhance their overall performance and competitive advantage position, and build organizational capability by establishing strategic partnerships.

References

Buller, P., & McEvoy, G. (2012). Strategy, human resource management and performance: Sharpening line of sight. Human Resource Management, 22, 43-56. doi:10.1016/j.hrmr.2011.11.002 Lengnick-Hall. M., Lengnick-Hall, C., Andrade, L., & Drake, B. (2009). Strategic human resource management: The evolution of the field. Human Resource Management Review, 19, 64-85. doi:10.1016/j.hrmr.2009.01.002 Malhotra, D., & Lumineau, F. (2011). Trust and collaboration in the aftermath of conflict: The effects of contract structure. Academy of Management Journal, 54, 981-998. doi.org/10.5465/amj.2009.0683 Nielsen, B. (2010). Strategic fit, contractual, and procedural governance in alliances. Journal of Business Research, 63, 682-689. doi:10.1016/j.jbusres.2009.05.001 Rai, A., Keil, M., Hornyak, R., & Wullenweber, K. (2012). Hybrid relational-contractual governance for business process outsourcing. Journal of Management Information Systems, 29, 213-256. doi:10.2753/MIS0742-1222290208 Sluyts, K., Matthyssens, P., Martens, R., & Streukens, S. (2011). Building capabilities to manage strategic alliances. Industrial Marketing Management, 40, 875-886. doi:10.1016/j.indmarman.2011.06.022

 Tjemkes, B., Vos, P., & Burgers, K. (2012). Strategic alliance management. New York, NY: Routledge.