Creating successful alliance Cont..(what I am understanding is..)

Anticipate most likely conflicts:

However alliances can make new value, also can be faced many conflicts. Most frequently, three issues arise:

Investment: alliances need to make investment plan through a policy (for example: joint venture can establish a budget for projected investments over a three-year period, also need to set hurdle rates and other criteria,… so on  )

Major acquisitions and alliances: Alliances should know that not collaborate with other new alliances, accepting dilution or exiting the venture at pre-agreed pricing. In addition joint ventures should clarify early on the conditions under which major alliances and acquisitions would be pursued and assess the potential financial impact. , Changing environment: Always should remember that alliance operate in a complex, shifting environment through encompassing new technologies, regulation, competitive dynamics and evolving customer demands. Environment is dynamic, so alliances need to have clear governance structure and manage it. For this, they need to respect senior executives and parent organizations with the experience.

Plan for evolution

Most successful, long lived alliances broaden substantially in scope, so it is important to build in the flexibility to grow. For that: 1. Strong focus on achieving specific objectives as well as identifying and capturing the revenue costs and capital utilization so on.. 2. It has flexible and dynamic approach to its development and membership then it has grown quickly. Good example is the “Star” volatile industry alliance. This alliance founded from 2 members and they centralized their activity and functions, expanded to 24 members.  

Establish clear metrics to track and measure success

Most organizations do not use performance measurement concepts. From this reason many alliances do not succeed.

 Thus easiest way to start is with a few objectives and metrics success.

-         What is the alliance value proposition?

-         Is it articulated clearly ?

-         How will we know if it is reaching its objective?

-         What elements of value creation are most important to alliance partners and stakeholders?

-         What outcomes are expected in terms financial and market impact, organization capability, innovative capacity and competitive advantage?

continue to reflect previous post..

the case mentioned about firms core value. Franz’s core value has  becomes  “creativity”.  also they create  like employee oriented working environment , I think that really fits that their core value. I mean that employees can innovate when they work such environment.

 

 

From guest speaker’s talking, what I understood is…through thier philosoppy they really could touched and catched their clients mind

Actually I have seen their product in Department store, I was so impressed. It is so gorgeous. And when I see the price of them I also don’t surprise and thought it should be .

I think the case is so clear and easy to understand.

The secret of success of Franz Collection company is their philosophy. For example: “China is china” , inside of this logo , They have their own proud, and it provides their products are original. They value phiposophy more than anything , and their philosophy is to express the message reprecented by their brand.  They keep reminding themself “ product is made in factory , but the brand is made in mind” .  They works with strategy ” mind to mind ” and ” man to manness” . It means that what they want to make , they should imagine  it in their mind and that imagination can be directly pass to client’s mind through their products. Ofcourse that feeling is should be like very close and warm, or make happiness to people..

Their product styles: uniqueness, friemdliness, create fashion , humane, artistic.

Style should be “Humane ”. That is intresting. It means Understand product…  That is really nice idea for me. Any kind of product first we need to understand that product then can satisfy from them.

Finally Thanks dear professor gave us opportunity that have to know manythings from each class.

 

 

 

Nonaka’s knowledge creation theory

Knowledge exists both tacit and explicit forms.(Polanyi, 1967)Tacit knowledge such as  experience based knowledge is often of greater strategic importance than explicit in form of data, scientific formulate, specifications or manuals. Japanese Theorist Nonaka examined the concept in terms of a knowledge spiral encompassing four basic patterns of interaction between tacit and explicit knowledge: socialization (tacit to tacit), externalization (tacit to explicit), combination (explicit to explicit), and internalization (explicit to tacit). His conceptualization of socialization, externalization, and combination is of particular importance in explaining the process of knowledge sharing. Through this process new knowledge is created.

Socialization yields new tacit knowledge that is built through informal interactions, that is through an exchange of tacit knowledge. It occurs by spending time together, sharing joint hand-on experience, working in an same environment, and an informal social meetings (even outside the workplace) between members of in organization or, beyond organizational boundaries, with customers, suppliers and affiliated firms.

Externalization is an act of codifying or converting tacit knowledge into explicit knowledge, characterized by more formal interactions such as expert interviews or the sharing of lessons learned in previous project.

Combination refers to the process by which sense is made of the relationships between previously unrelated knowledge domains. It involves collecting, editing, sorting, and synthesizing existing explicit knowledge and subsequently disseminating the new knowledge.

Internalization is the process of applying explicit knowledge, thereby absorbing, embodying, and converting it into individually held tacit knowledge.

 

“Creating successful alliances”, what I am understanding is ….

Successful practitioners adapt these six guidelines as disciplined, common sense approaches to the creation of successful alliances:

1.      Two parties need to develop clear, common objectives and definition of success. But it is often hardest to achieve. Because usually two parties which are going to alliance, they have their own operating models, cultures and even accounting policies. That means it is rare that two parties have the same objectives, metrics and definition of success. The article says because of this reason Lucent and Bay companies alliance was dissolved.

2.      Ensure proper alliance form. It is easy to get off track with structural issues.  To be successful alliance structure must take of two forms such as have a strong structure with centralized leadership or provide clear roles for decision making. Example: PowerPC (IBM Apple, Motorola) alliance 1991, but the organization incorporated multiple start-up companies, dedicated divisions within the parent companies, and contracts and cross licensing agreements, all without centralized leadership. So the alliance dissolved 1998. The article pointed that Power PC alliance operations should be unified under a separate company with centralized governance, in other words, when clear decision rules or sharing of resources can be established alliances like those in the shipping industry require the smallest amount of structure.

3.      Determine governance for clear decision-making.

   Establishing the appropriate governance model is critical for clear decision-making and operating viability. Deciding who makes decisions and how they should be made depends on size and importance of the alliance, its objectives, whether it is a joint venture or a non equity arrangement and it’s stage in the alliance life cycle such as formation, execution and wind-down.

If the alliance have clear operating model such as TriStar(media industry) , alliance can avoid two of the most difficult aspects of many joint ventures: it linked budgets, resources and operations and it planned for infusions of capital. TriStar brought three companies together and vertically integrated their products and services.

Other 3 I am not so much undestand So I need to ask from class…

Crafting successful strategic technology partnership

The need for a new partnering framework

This study distinguished five key factors that reinforce the need for new partnering approach. Those factors are related to the scope, goals, number of partnerships, as well as change in competitive drivers and duration of alliances.

1. Scope: From peripheral activities towards strategic partnerships

In the past, companies often focused on mergers and acquisition to harness their own core business. Nowadays, we see an increasing use of strategic alliances for creating fundamentally new technologies or gain access to newly emerging markets.

1. Goals: From preset objectives towards innovating in dynamic uncertainties

Companies prepare for innovation by sharing intellectual assets. They recognize that knowledge alliances can be great use in setting the leading edge of technology and shaping the marketplace. The main goal of these knowledge intensive alliances is to swap knowledge for tangible assets or to swap knowledge for other knowledge.

1. Number: From bilateral co-operation to ambiguous multiplicity

Traditionally alliances were typically bilateral. This enabled easy alignment of strategies, setting goals and controlling performance. Nowadays, it is not unusual that alliances involve 10, 20 or maybe even 100 different partners. Where multiple partners co-operate, setting a joint strategy is far more complex. The risk of divergence is higher and network is highly sensitive since there are many interdependence between partners.

1. Competition: From one to one competition towards network competition

In today’s network alliances, there is clear tension between competition and co-operation. Today’s partners can turn out to be tomorrow’s competitors. The profound shift is that competition between networks of alliances is emerging: in the past, companies were aware of their direct competitors, nowadays they start to shape networks with competitors that compete with other similar networks.

1. Duration: From long term co-operation towards customized partnerships

In traditional views, focus is on long term strategies for partnering. However, long term partnering is not always the best way to cope with the complexity of the technological environment. In the approach to partnering there is a need to distinguish between “elephants” and “fruit flies”. This means the need to clarify the difference between key strategic partners (elephants) and partnership that only serve narrow technological objectives (fruit flies) for short term results.

                                                                     R&D Management vol 29 (4), 1999

 

 

I could get idea from the chapter 7, for individual paper of this class

According to text book leadership is art of getting things done through others. also leadership is charged with the responsibility of integrating policies and procedures such as :

1 ability to learn from others

2 ability to meet performance goals

3 ability to build trust 

From This part I get idea for my individual paper.  Trust is built throught consistency and open communication. then I can think more about if managers make like open communication environment such as give opportunity  share tacit knowledge between employees  that could positively influence organization’s innovation performance.

 

What I learned from Agency theory is …

According to Kathleen (1989) agency theory has developed developed along 2 lines. One of them is positivist have focused  almost exclussively on the special case of the principal-agent relationship between owners and manargers of large public corporations. Second one is Principal-agent line. It concerned with the general theory of principal (cheif, owner so on)- agent (managers, mediater, negotiator so on) relationship, theory that can be applied to employeer- employee, lawyer- client, buyer- suppliers.

From those two line of approach , positive agency approach can be applied future work . If there is only one company still principal- agent problem can be emerge. Principal should be shareholders or owners, and agents are managers.  The problem and conflict between this 2 part should be solved immediately. So I think that this theory very helpful for our future work. SHould learn it….

lets learn more about agency theory which mentioned in the class…

Agency theory has been used by scholars in accounting, economics, Finance, Marketing, Political Science, organizational behaviour and Socialogy. That is an important theory. Most public corporations are large enough that it is neither efficient nor feasible for the owners of the firm to actually manage the business. Under such circumstances, the owners of the corporation must contract with an agent to make both short-term and long-term operating, financial, and strategic decisions. It can be expected that, at many times, the agent’s priorities and objectives may be different from those of the owners. An agent may likely pursue his or her own interests if such a divergence in priorities and objectives develops since the agent exercises control over the firm’s activities.  In other words Agency theory is directed at the ubiquitous agency relationship, in which one party (the principal), delegates work to an other (the agent) who performs that work.   Most frequently, agency theory has been applied to organizational phenomena such as compensation, acquisition and diversification strategies., board relationships, ownership and financing structures, vertical integration,  and INNOVATION. Agency theory has developed along two lines positivist and principal.

Positivist researchers have focused on identifying situations which the principal and agent are likely to have conflicting goals and then describing the governance mechanizms that limit agents self serving behaviour. Then they focus focused almost exclusively on the special case of the principal agent relationship between owners and managers of large, public corporations.         will be continue …..

 

High tech production ( Betz, 2003 chapter 16 summary)

Technological innovation must occur not only in new products, but also in new production processes to produce products quickly, cheaply, and high quality. Over time, the number of innovations of production exceeds the number of innovations in products. Accordingly, innovation strategy should focus not only in high-tech products but also on high tech production.

 

Production has been called by different names in different industries. Example: In the hardware industries production is called manufacturing, in the civil structures industry it called construction, in service industry it is called service delivery. Software production is either named hard goods production.

                                                                                               Production systems,  Materials must thus be transported to the production site, moved to and between unit production processes, packaged, stored in finished product inventory, and shipped into distribution channels. The system of coordinating all this is called production system. Technological change in production system can occur in any aspect and any part of the production system.  

Innovation in production systems can provide competitive edges of two economic types: economies of scale or economies of scope. An economy of scale is a unit cost advantage in production that arises from technical efficiencies in the volume of the production scale. An economy of scope is a production flexibility that allows a producer to market a broad range of products.

 

Technological Innovation can be implemented in both unit processes and the control of the unit processes of a manufacturing system. Research and technological innovation can improve unit process control in two ways: by real time control through intelligent sensing and control, 2) through experimental design for processes that one cannot presently model

Production learning curve

Production innovation is critical to the beginning of the production of any new product, as improvements in production to improve product quality and lower product costs are essential to competition. When a new production system is innovated, the initial production of the system always be more costly and of lower quality and less safe that later production. Learning better how to produce is the common experience of successful producers. This has been expressed in the production learning curve. Plotting the unit cost of production over time shows how unit production costs can decline as technologies and skills of production are improved.

  

Design for manufacturing

Not only of product performance have been termed DFM, lower manufacturing costs and improve manufacturing quality have been termed DFM either.

 Quality in manufacturing

Technological Innovation can improve product quality in three ways: through improving performance(how well does it do the job for customer?) or dependability (Does it do the job dependably), or through lowering product variability (does it produce the product in volume without defective copies?)

When a product fails, you must replace it or fix it. In either case, you must track it, transport it, and apologize for it. Losses will be much greater than the costs of manufacture, and none of this expense will necessarily recoup the loss to your reputation…(Taguchi and Clausing, 1990.p.65).

 

Evaluating the benefits of innovations in manufacturing requires following criteria:

- Improvement in production precision, production flexibility, production control and scheduling,

- Reduction of material waste, throughput time, work-in-process inventories and indirect product costs.

Financial evaluation of technical innovation in manufacturing solely on a direct cost return-on-investment criterion misses the impact of quality on competitiveness and profitability.

 Hard goods production technology audit

A systematic list of all technologies involved in production is called production technology audit. Example: Hard goods production technology audit 1) unit-production processes 2) materials-handling processes 3) production control processes 4) environmental control processes 5) product distribution processes. In each of those processes, there will be physical equipment and phenomena and control equipment and algorithms.

 Service delivery technology audit

  Necessary infrastructure : 1) Major device system 2) Facility system 3) Sales system

  Parallel operating systems: 1) professional personnel system 2) Support system 3) Scheduling system 4) Maintenance/ resources systems