Business partnering

From Wikipedia, the free encyclopedia

Business partnering is the development of successful, long term, strategic relationships between customers and suppliers, based on achieving best practice and sustainable competitive advantage.[1] In the business partner model, HR professionals work closely with business leaders and line managers to achieve shared organisational objectives.[2] In practice, the business partner model can be broadened to include members of any business function, for example, Finance, IT, HR, Legal, External Relations, who act as a connector, linking their function with business units to ensure that the technical, or functional, expertise they have to offer is placed within the real and current concerns of the business to create value.[3]

Mission[]

The mission of business partnering and the key-aspects of the discipline have been developed recently in the tourism field. The mission of business partnering (for tourism) consists in "creating, organizing, developing and enforcing operative (short-term), tactical (medium-term) and strategic (long-term) partnerships" (Droli, 2007). "Partnering is the process of two or more entities creating synergistic solutions to their challenges."[4]

Examples[]

Joint selling is an example of operative partnering activity. Account intelligence sharing or "value chain integration" (Child, Faulkner, 1998) are examples of tactical partnering initiatives. Joint product development is a typical strategic partnering activity. Partnering agreements are commonly used in the different kind of partnerships.

One example is the strategic partnering arrangement in the aviation sector which was put together by the UK Ministry of Defence and AgustaWestland.[citation needed] Both partners share an agreed common objective to improve helicopter services and support to the front line. The MOD also wishes to provide the best value for money to the taxpayer while AgustaWestland seeks to provide the best returns to its shareholders via a stable, long-term income stream.

Benefits[]

Reduction of general costs: business partnering can be cheaper and more flexible than a merger or acquisition, and can be employed when a merger or acquisition is not feasible.

Business partnering increases "competitive advantage" (Porter, 1985). The direct benefits of business partnering consist in greater competitive advantage through cooperation (the co-opetitive advantage) and even better opportunities of revenue, occupation and investment in the sector of application.

Business partnering creates a no more traditionally-based solidarity or "organic", but a rationale form of "mechanic solidarity" (Durkheim, 1893). Partnering takes a new approach to achieving business objectives. It replaces the traditional customer-supplier model with a collaborative approach to achieving a shared objective; this may be to build a hospital, improve an existing service contract or launch an entirely new programme of work. Essentially, the Partners work together to achieve an agreed common aim whilst each participant may still retain different reasons for achieving that common aim.

Formation of business partnering[]

Business partnering can take the form of a strategic alliance, a buyer-supplier relationship, a joint venture, or a consortium. Firms should pay particular attention to the mechanisms of governance used to organize their partnership. They can rely on a combination of contractual and relational mechanisms.[5][6]

Firms usually need to form partnerships with other firms to enable their business model (Teece, 2010).[7] To become attractive to other businesses firms need to align their internal features, such as management style and products with the market situation. In their 2013 study, Kask and Linton develop two ideal profiles, or also known as configurations or archetypes, for startups commercializing inventions. The Inheritor profile calls for management style that is not too entrepreneurial (more conservative) and the startup should have an incremental invention (building on a previous standard). This profile is set out to be more successful (in finding a business partner) in a market that has a dominant design (a clear standard is applied in this market). In contrast to this profile is the Originator which has a management style that is highly entrepreneurial and have a radical invention (totally new standard). This profile is set out to be more successful (in finding a business partner) in a market that does not have an dominant design (established standard). New startups should align themselves to one of the profiles when commercializing an invention to be able to find and be attractive to a business partner. By finding a business partner a startup will have greater chances to become successful (Kask & Linton, 2013).[8]

Financial business partnering[]

The term financial business partnering is used to describe finance executives working alongside various business departments including operations, human resources, sales and marketing, among others, providing financial information, tools, analysis and insight, which allows companies to make more informed decisions while driving business strategy.[9] Although finance business partnering has been around for many years,[10] it has taken on increased importance, particularly as the result of the financial crisis of 2007-2008.[11]

According to research undertaken by Robert Half UK, 81% of UK companies are looking to form stronger partnerships between the finance department and other parts of the business.[12] Matthew Maloney, the finance director of foreign exchange company Moneycorp, reported that efforts to integrate the finance team more closely into the business have borne fruit.[13]

Sources[]

Partnering requires all partners to transform their businesses in terms of relationships, behaviours, processes, communications and leadership. Neither participant can succeed without the other so the recommended approach is to implement the transformation as a joint activity wherever possible.

Partnering has existed for centuries. In economics, business partnering has gained significant momentum and focus within leading global businesses, as "a medium for achieving significant revenue growth" (Doz, Hamel, 1998).

See also[]

  • Construction partnering

Further reading[]

  • Child, John; David Faulkner (1998). Strategies of Co-operation: Managing Alliances, Networks and Joint Ventures. Oxford University Press. p. 386. ISBN 978-0-19-877485-3.
  • Darby, Mark (2006). Alliance Brand: Fulfilling the Promise of Partnering. Wiley. ISBN 978-0-470-03218-3.
  • Echavarria, Martin (2015). Enabling Collaboration – Achieving Success Through Strategic Alliances and Partnerships. LID Publishing Inc. ISBN 9780986079337.
  • Doz Y. L., Hamel G., Alliance Advantage. The art of Creating Value through Partnering,Harward Business School Press, Boston, 1998, ISBN 0-87584-616-5.
  • Droli M. Partnering turistico. L'Impostazione, la Creazione, l'Organizzazione ed il Rinforzo Continuo di una Partnership Strategica di Successo, Forum, Università degli Studi di Udine, Udine, 2007, ISBN 978-88-8420-405-9.
  • Durkheim, The Division of Labor in Society, (1893) The Free Press reprint 1997, ISBN 0-684-83638-6
  • Lendrum T., The Strategic Partnering Handbook, A Practice Guide for Managers, McGraw-Hill, Nook Company, 1997, ISBN 0-07-470879-1.
  • Porter M., Competitive advantage: Creating and Sustaining Superior Performance, NY, Free Press, 1985, ISBN 0-02-925090-0.
  • Williamson, O., Markets and Hierarchies: Analysis and Antitrust Implications, Free Press, NY, 1975.

References[]

  1. ^ Lendrum, 1997
  2. ^ Ulrich, D. and Brockbank, W. (2005). Role call. People Management, p. 24.
  3. ^ "What is Business Partnering?". Future Considerations. Retrieved 11 December 2018.
  4. ^ Rigsbee, Ed The Art of Partnering, Kendall/Hunt 1994, ISBN 0-8403-9343-1)
  5. ^ Poppo, Laura; Zenger, Todd (2002). "Do formal contracts and relational governance function as substitutes or complements?". Strategic Management Journal. 23 (8): 707–725. doi:10.1002/smj.249. ISSN 0143-2095.
  6. ^ Cao, Zhi; Lumineau, Fabrice (2015). "Revisiting the interplay between contractual and relational governance: A qualitative and meta-analytic investigation". Journal of Operations Management. 33–34 (1): 15–42. doi:10.1016/j.jom.2014.09.009. ISSN 1873-1317. S2CID 12536364.
  7. ^ Teece, David J. (2010). "Business Models, Business Strategy and Innovation". Long Range Planning. 43 (2–3): 172–194. doi:10.1016/j.lrp.2009.07.003.
  8. ^ Kask, Johan; Linton, Gabriel (2013). "Business mating: when start-ups get it right". Journal of Small Business & Entrepreneurship. 26 (5): 511–536. doi:10.1080/08276331.2013.876765. S2CID 168158914.
  9. ^ "Finance professionals need partnership skills, says report". Treasury Today. Treasury Today. Archived from the original on 1 September 2013. Retrieved 30 July 2013.
  10. ^ "Finance business partnering: a guide". ICAEW. Retrieved 22 September 2014.
  11. ^ "Importance on Business Partnering". Verified Trustworthy. Retrieved 15 August 2015.
  12. ^ "Financial Business Partnering: Five steps to get you started". Jobsite - Insider. Jobsite. Missing or empty |url= (help)
  13. ^ Prevett, Hannah. "Bean counters start jumping". The Sunday Times. News International. Missing or empty |url= (help)
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