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Joint Venture Essay

Words: 3631, Paragraphs: 41, Pages: 13

Paper type: Essay

Research Limitations/laminations ? Further research might examine other examples of public-private partnerships nice the research reported here comprises only a single case study – the major limitation of this research. While utilizing the findings of this research may improve the chances of a successful venture, they cannot of their own accord guarantee success since other factors are at play. Originality/value – The paper presents a valuable Insight for both academics and practitioners who are keen to appreciate executives’ concerns that can arise In evolving a Joint venture between a public and a private sector organization.

Keywords Partnership, Joint ventures, Public sector organizations, Private sector organizations, Communication, Project planning Paper type Research paper Introduction Collaboration between different organizations enables them to compensate for gaps In their knowledge and capacity to provide goods or services (Walker and Johannes, 2003). These collaborative efforts can take the form of partnerships, alliances and joint ventures. In a public service context, a partnership is “a relationship involving the sharing of power, work, support and/or information with others for the achievement of joint goals and/or mutual benefits” (Kernighan, 1993).

Partnership arrangements between the public and private sectors illustrate how the traditional role of the government as n employer and service provider is being transformed (Cm 4310, 1999; Institute for Public Policy Research, 2001; Lowness and Squelcher, 1998; Kelly, 2000; Robinson et al. , 2000). The idea is that “boundary-less”, or “network” organizations strengthen opportunities for innovation through closer collaboration and also reduce costs through the mutual achievement of business objectives based on cooperation around respective competitive strengths.

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Unfortunately, the shift away from bureaucracy and the creation of numerous providers has itself produced problems or collaboration and co-ordination as well as making it harder to provide a unified approach to service delivery. To be effective, clarity about the role and purpose of a network is required. Without this, the participation of its individual members is constrained by the hierarchical organization to which they belong, and issues relating to accountability and autonomy may come into conflict.

Networks inevitably have to compromise and bridge the gap between action and discussion (Huzzah, Bibb). Strategically, networks are more difficult to steer in any coherent direction. Indeed, it might be argued that competition and the “contract culture” have promoted self-interested behavior rather than the public interest, and produced low trust relationships. The concept of networks and collective strategies has laid the foundation for an outbreak of writing and research on strategic alliances. Indeed, there is a vast literature on the subject.

During the sass there was significant research conducted relating to the management of public private partnerships commenting on such matters as their governance (Huzzah and Avenge, 1996; Kickers, 1997; Martin, 1998), the structure of such partnerships and why they succeed r fail (Osborne, 1998; Scott, 1998), and the potential of partnerships to promote inclusion in local communities (Geodes, 1998). In addition, there is a substantial literature on various forms of inter-organizational partnerships, both public and private (see, for example, Osborne, 2000, for a substantial review of the literature on public-private partnerships).

Alongside the development of partnerships and networks, a new type AT organization to emerge NAS Eden ten virtual organization. David and Malone (1992) defined the “virtual organization” as a co-operation teens several independent partners (companies or individuals) who share their resources, skills and knowledge in order to produce a “best” customer solution. Such cooperation can provide a basis with which to gain access to vital resources and knowledge beyond one organization’s boundaries (see Miles et al. , 2000).

Without geographical or physical constraints, networked organizations can add value through superior core competences. Significance for public-private partnerships Tony Blair (1998) argues that the days of the all-purpose authority that plans and delivers everything are gone (see also Riddle, 1988). It is in partnership with others – public agencies, private companies, community groups and voluntary organizations – that local government’s future lies. Partnership plays a key role in the government’s Modernizing Government agenda.

It recognizes that one has to approach a bewildering number of agencies simply to deal with the challenges of everyday life. Modernizing Government aims to: . Ensure that policy making is coordinated and strategic in nature; . Ensure that public service users, not providers, are the focus of attention, by matching services closely to people’s lives; and . Liver high-quality, efficient public services. The research question and its Justification Many studies have focused on Joint venture partnerships, but little empirical research has been conducted into what makes an alliance successful.

Previous research has articulated a linkage between inter-partner “fit” and venture performance. It has been suggested that the main barriers to the development of these kinds of structures are not so much technological ones as cultural ones (Manchester, 1997). However, “fit” has been postulated using different notions such as strategic symmetry (Harridan, 1985), inter- rim diversity (Parke, 1991), match of partner characteristics (Grinner, 1988), and inter-partner compatibility/complementary (Beamers, 1988; Hill and Helloing, 1994).

The result of this operational confusion has led to a lack of consistency in empirical findings. Perhaps quite significantly, however, as Huzzah and Avenge (1996) have shown, action by the more powerful participant in a relationship is at the core of successful partnership. There seems little doubt that in the future public sector management will need to be able to possess the skills, processes, structures, genealogy and tools required for working across organizational boundaries (Huzzah and Avenge, 2000).

Partnerships create a new form of accountability between their members which rests primarily on trust. Where there is mistrust or hostility between some or all of the partners, then the effective operation of their partnership may be difficult to achieve (Bennett et al. , 2004). Huzzah (1995, AAA), in discussions on collaborative activities within and between organizations, points to the potential problems and pitfalls associated with collaboration and, by association, with partnership. These are: . As of control – the inability to take action if things seem to be going wrong or differently from expectations: shared decision-making may be problematic; . Multiple goals – stakeholders are likely to want to achieve their own particular goals which may not relate to the stated purpose of the partnership; and . Tension between autonomy and accountability – members may be accountable to their stakeholder groups, which may mean checking back before committing to a calicles. I Nils teen leads us on to quest want concertmasters cutlets or less successful Joint venture partnerships.

The partnership and the views of its members In the illustration we are using here, the City Council agreed to seek a Joint venture partner to help develop CIT and other service areas such as payroll, revenues and 119 120 benefits, a contact centre and human resource management. The aim was to achieve a level of service with a technical vision built around intelligence-led local government. This vision, it was thought, would help to achieve high service standards and help deliver enhanced levels of value for money.

The focus on customer service and quality of service were the critical drivers, and staff from the City Council and the riveter sector organization were seconded into the new Joint venture company. Those contacted in the research were asked for their personal views, attitudes, values, beliefs, experiences and motivations in relationship to the partnership. Subsequent research revealed five significant problem areas of concern or interest. These were: (1) communication; (2) openness; (3) planning; (4) ethos; and (5) direction. The study An initial pool of 30 subjects was identified for the study.

Subjects chosen for the case study were senior managers, middle managers, and operational staff employed by the City Council, the private sector organization and he Joint venture company. Subjects were identified as being part of the initial task teams who were instrumental in the formulation of the Joint venture and those senior managers and operational staff who were employed in managing the day-to- day operation of the partnerships. In total, consultation in the form of interviews or discussions was held with 13 senior managers, nine middle managers and the remainder with operational staff.

There were 14 in-depth interviews lasting 90 minutes and three group discussion sessions (16 staff in total participated in the group discussions). Five senior managers were employed by the partnership organization; four senior managers, three middle managers and three operational staff had been seconded to the partnership organization; and the remaining staff were employed by the Council. In-depth interviews were conducted during which subjects were given an overview of the background of the Joint venture partnership in preparation for discussion.

The interview discussions were guided by the use of a question pool. These questions were organized across relevant areas of inquiry and focused on developing an understanding of how the Joint venture partnership was progressing, what issues there were, if any, and what components they felt were accessory to contribute to the success and maintenance of the partnership arrangement. This, it was felt, would give both an introduction and an initial focus for discussion and was based on the common-sense reasoning of a need to explain the Docudrama Ana purpose AT ten research.

I nee data generated Trot Interviews Ana group discussions was explored without a predetermined theoretical or descriptive framework. This strategy reflected a grounded theory approach. This process was based on analysis and theoretical understanding of the substance of what was said in discussions and interviews. The rationale behind the reduction of the data elected was based on the commonality of the words, themes and concepts being produced by the respondents through the written and oral research data. From this analysis the five concepts discussed below emerged as critical themes relating to the topic of the research.

In our discussions below we examine pertinent literature relating to the five concepts that emerged from the research. Discussion of the findings Communication Many business alliances fail to meet expectations because little attention is given to nurturing the close working relationships and interpersonal connections that unite the partnering organizations (Waite and Jape, 1995). An awareness of communication processes is essential within alliances if maximum efforts are to be coordinated and directed towards the success of strategic alliances.

The comprehensive review by Mohr and Nevi (1990) concluded that the major omission in this area concerned studies of how communication relates to the overall performance of alliances. Ineffective communication can reduce the effectiveness of a strategic alliance and thus lead to conflict between partners Cain, 1987). There is an assumption that organizations will function better if communication is open, if relationships are based on mutual understanding and trust, if relationships are co-operative rather than competitive, if people work together in teams, and if decisions are reached in a participative way (Husking and Buchanan, 2001).

These conditions, however, are not observed in many organizational situations. Some of the main barriers to communication concern: . Power differences; . Gender differences; . Physical surroundings; . Language; and . Cultural diversity. Canter (1999) examines how, in the course of communication, the proactive exchange of information can strengthen co-operative relationships. However, in the case study under examination here, there was no Achaeans in place to facilitate discussion on issues between the partners.

An awareness of communication processes is essential within alliances if maximum efforts are to be coordinated and directed towards the success of strategic alliances (Mohr and Nevi, 1990). In our research, we identified that motives were often misunderstood and that people had a tendency to assume the Joint venture partners’ motives. Clearly, good communication between different levels of management and units is essential in order to foster shared purpose and common understandings.

In a related context, Jobber (1995) suggests that internal marketing is an important implementation” tool. It aids communication by informing and involving all staff in new initiatives and strategies. Our research uncovered that information which was necessary for the accurate understanding of reasons for the partnership was not available to all parties. Communication and a level of interpersonal understanding appeared to occur only among a small group of people. Others outside the immediate circle did not share this.

Puddle-private partnerships 121 According to Canter (1999), effective collaboration requires connections at three levels across collaborating organizations, represented by continuing contact among: 1) top management to develop broad goals and monitor progress; (2) middle managers to develop plans for Joint activities; and (3) operational personnel, who carry out the day-to-day work of the alliance. Openness Trust is considered a prerequisite for alliance success (Byrne, 1993) and lack of trust is a major reason for alliance failures (Penn and Sheehan, 2002).

There is evidence to point to the fact that strategic alliances may be unstable and their success rate poor (Gang, 1995). The implication is that there is a need to appreciate that trust and control are inextricably interlinked with risk in strategic alliances. Partner firms need to manage this risk adequately by understanding the conjoint roles of trust and control. The establishment of a new relationship between members of the organization at all levels – a relationship based on trust – is an issue that is becoming increasingly important to organizations (Handy, 1995).

An “inward focus” seemed to be pervasive within the organizations we studied. There was a distinct lack of openness and trust between the partners. In fact, the indications were that a “blame” culture (biz. Handy, 1995) existed. The establishment of a new relationship between members of the organization at all levels – a relationship based on trust – is an issue that is becoming increasingly important to organizations. Planning Many “strategic alliances” lack “alliance strategies”.

A coherent alliance strategy has four elements: (1) a business strategy to shape the logic and design of the alliance; (2) a dynamic view to guide the management and evolution of the alliance; (3) a portfolio approach to enable co- ordination among the alliance to enhance flexibility; and (4) an internal infrastructure that supports and strives to maximize the value of external collaboration (Gomes- Caresser, 2000). When managed well, the above elements can create tremendous value. At the wrong time and when managed poorly, they can be costly distractions (Gomes-Caresser, 2000).

The good intentions and rational motives behind alliances are not congruent with the strategic direction of either firm on its own, let alone the strategic direction of both in unison. Consequently, Joint venture companies are frequently plagued with high degrees of instability and poor performance (Parke, 1993; Gout, 1991). A lack of coherent strategies existed in our case study organization. A coherent alliance strategy should possess the four elements listed above. In the organization we examined, there was no apparent plan or method to identify success or failure in terms of attaining objectives.

Parke (1993) and Gout (1991) observe that often the good intentions and rational motives behind these alliances are not congruent with the strategic direction of either firm on its own, let alone the strategic direction of both in unison. Our findings seemed to provide some evidence as to why this might be the case. In particular, the priorities of the organization were not obvious. According to Hill and Jones (2001), the strategic planning process can be Rosen down into five main steps: (1) mission and objectives; (2) environmental scanning; (3) strategy formation; (4) strategy implementation; and (5) evaluation and control.

In the organization we studied there was no evidence of these steps being followed. Ethos Ethos is the characteristic spirit or attitudes of a community, or people (Webster, 1992). It comes very much to the fore in strategic alliances when the co-operating firms continue to be independent organizations and a new situation appears in which an interaction is established between two firms with different organizational cultures. This usually implies different leadership styles and different objectives, which may lead to lack of trust between the parties and to conflicts which may arise when the time comes to make decisions (Bono, 1991).

Similarly, cultural conflicts are more common in Joint ventures, where a closer contact between the partners is required, than in contractual alliances (Schultz, 1998). Employees were seconded from the private sector organization and from the City Council into the newly formed organization of the Joint venture company. These people came from a variety of backgrounds and had very different experiences, and this was reflected in heir different social ways and beliefs.

There was a feeling of “lack of identity’ amongst staff working for the Joint venture company, in accord with the comments put forward and discussed by Czarinas (1997). Indeed, the identity of the organization should allow members to speak about themselves as an organization not only to themselves but also to others, but this did not seem possible in this case. There was a failure to learn and understand about the cultural differences of the two organizations that had come together to form the Joint venture company.

Not only id cultural differences exist, but the corporate cultures were also different. Dimension (1990) observed that “organizational culture” can be defined as an organization’s values, beliefs, principles, practices, and behaviors. Direction The public sector is under pressure to improve service delivery and cooperate more effectively (Cabinet Office, 2003). There is a growing demand for leaders able to carry out these tasks, and to see through fundamental processes of change. However, the public sector does not have a clear idea of what constitutes good leadership.

The analysis that goes exist suggests that good leadership remains too rare a quality. The implication is that we need to take careful notice of the precise environment within which leadership is constructed and deployed. The appointment, monitoring, reward and accountability structures and processes all play some part in inhibiting and/or encouraging certain forms of leadership. Multiple and often conflicting accountabilities that prevail upon public sector 123 leaders necessitate greater training, support and skill than that required in most private-sector positions Cabinet Office (2003).

In the case of the organization searched here, there was a lack of iron-clad commitment to succeed. According to Hoffmann and Closer (2001) and Ninepin and Ross (2001), the participation of senior managers should go beyond the formulation of a strategy based on alliances. These managers should personally take part in the co-operative management process and show their commitment and enthusiasm both to and in the operation of the alliance. Weak organizational leadership has helped to contribute to lack of clear vision and direction.

Slater (2003) observes that tomorrow’s leaders must raise issues, debate them, and resolve them. They must rally around a vision of what a business can become. Leaders had not set the “tone” of the organization in this case. Strategic leadership refers to the ability to articulate a strategic vision for the organization, or a part of it, and to motivate others to buy into that vision (Hill and Jones, 2001). Research has shown that the partners must work extremely hard at understanding each other, developing common objectives, and being truly committed to achieving a mutually desired and acceptable outcome.

Otherwise, the relationship will never truly succeed. The key to making partnerships work comprises common sense, trust, pen communication, the right environment, and a good plan and strong leadership. Table I outlines some of the statements obtained from in-depth interviews in the course of the research. The statements are grouped according to the COPED element identified and indicate some of the problems, inadequacies and concerns faced by the partnership organization.

While most of these elements were identified as requiring attention in some way or another, arguably they may not be all the factors that guarantee a successful partnership. Nevertheless, they could be regarded as important factors in enabling partnerships to be successful. We suggest that the success of a Joint venture may be influenced by five important characteristics. These characteristics are illustrated as building blocks in a model which we have termed “the ‘COPED’ model”.

This model reflects a collection of underpinning factors (see Figure 1). Conclusion Results from the research indicate the existence of five helpful characteristics identified under the heading of Communication, Openness, Planning, Ethos and Direction, which may be present in a successful partnership venture. It proposes a theoretical framework model, the “COPED” model, for building more impressive and productive relationships between public sector organizations and private sector companies.

The elements of the COPED model emerged from the analysis of data and lent support for the various pointers for successful partnerships and networks. The elements, in fact, could be identified as ways in which the older bureaucratic sector organizations failed to accomplish their mission to serve their stakeholders. It is contended that the elements of the COPED model are required to ensure some degree of success, and in the organization studied here they were often found often to be lacking in many respects.

COPE element Communication statements we are crap at communications we nave not allowed ourselves time to promote the partnership organization We need to improve upon communication We have a weakness which manifests a lack of understanding I think it’s strange that we don’t have briefings on the progress of partnership organization There seems to be a lack of discussion around future financial planning I think there is a lack of understanding around the political regulatory We need to market the partnership organization We need to have a firm understanding of the Council’s vision We need to remote the branding of the partnership organization No clear understanding of the contract There is a distinct lack of communication There is a blockage, not enough information on budgets I think there is a flaw in communications There Just seems to be a real lack of communication It’s difficult to know if the partnership organization staff understands the requirements of the Council We need to be briefed on a regular basis regarding progress of the partnership organization’s projects I don’t think the partner organization’s staff really understands the history of the Council

About the author

This academic paper is composed by Samuel. He studies Biological Sciences at Ohio State University. All the content of this work reflects his personal knowledge about Joint Venture and can be used only as a source for writing a similar paper.

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