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Abstract

Two partnerships are analyzed; a same sector partnership between Forever 21 and Atkins, and a cross-sector partnership between the pharmaceutical Glaxo Smithkline(GSK) and the non-profit Save the Children (STC). Our hypothesis is that the success of a partnership depends upon a balanced exchange of values that are clearly defined at the beginning of a partnership. Continuous and synergistic exchange of values contributes towards a successful partnership that avoids complacency and helps achieve strategic benefits. In order to confirm our hypothesis, literature on the subject of partnerships is reviewed. Recommendations and suggestions are offered for the cross-sector partnership to maintain the partnership and continue providing societal benefits.

Background

Partnership can be defined as a relationship between two or more parties, who share joint liabilities for the actions of the whole. In the literature, partnerships are often defined in terms of being freely entered into by both parties and being for the benefit of both parties that largely retain their freedom of action. (Roberts & Wallace, 2004).

There are three types of partnerships; general partnerships involving general partners, limited partnerships involving one general partner with unlimited liability and others with limited liability, limited liability partnerships provide limited liability to every partner. (Alvernia university, 2017).

Benefits of NGO-Private sector partnerships include increased resources, human capital, enhanced networks, increased intangible assets like enhanced legitimacy and reputation, along with providing societal benefits. (Kis & Dilday, 2015). Partnerships can reduce the structural inefficiencies systemic in NGOs and the private sector. (Kis & Dilday, 2015. Non-profits act as mediators by translating community needs into corporate language. (Kis & Dilday, 2015).

GSK-Save the children:

Every day almost 15,000 children below the age of five die due to preventable diseases that can be treated. GSK pharmaceuticals and Save the Children formed a partnership with the goal of saving the lives of one million children aged below five years. (GSK, 2020).

Evolutionary dynamics of GSK-STC partnership:

GSK-Save the Children partnership was initiated by GSK CEO, Sir Andrew Witty. GSK wanted to ensure that their medicines were available to people in need. Save the Children knew that if they want to achieve their objectives on the global level, they should initiate partnership with the private sector. (Aryitey, 2017). They connected together for improvising better health care at the global level and especially in the vulnerable areas. This partnership was launched on 9 May, 2013 in Kenya. (Aryitey, 2017).

Philanthropy to transactional:

The partnership evolved to being transactional through increased resource exchange;

· Provision of health care benefits to the marginalized areas or where there is greater need of resources.

· Provide training to the health care workers in the vulnerable areas and communities.

· Working on the ground and at global level to raise awareness about child health care policies

Integration:

The partnership continued along the continuum by including strategic value. There was increased mutual mentoring, enhanced scope and accountability. The partnership runs two health programs in Africa. The partnership works together in 37 countries in training health professionals. This is an accurate example of successful partnership because they shared their resources, credibility and knowledge for the same purpose and mission. (GSK and Save the Children partnership mid-term report, 2015).

Transformation:

GSK has pharmacological expertise, and STC had information on the potential use of the medicines in a practical context. The chlorhexidine gel was a modified physical form of the chlorhexidine mouthwash and has been used on over 15000 newborns in Kenya to prevent neonatal sepsis. The innovation was inspired by the inputs of Save the Children about the difficulty in using a liquid formulation on newborn. (Aryitey, 2017). At this stage, the partnership reached the transformational stage.

GSK partnership with Save the Children has now been extended to 2022. (GSK, 2020). GSK continues to work together combining GSK’s scientific and manufacturing expertise with Save the Children’s on-the-ground experience to find new ways to save children’s lives. (GSK, 2020).

Forever 21- Atkins:

Forever21 is a family owned business founded in 1984. The brand was based in Los Angeles with retail stores across Europe, Asia, Latin America and North America. (John, 2020). Forever 21’s mission is to provide customers with a variety of contemporary apparel at reasonable prices. The core values of the company are time consciousness and helping those in need. (John, 2020). Unfortunately, the business could not withstand increased competition and filed for bankruptcy in September 2019. (Ciment, 2020).

Atkins Nutritionals, Inc. was founded by Robert Atkins in 1989. The company went bankrupt in 2005. In 2017, Conyers Park Acquisition Corporation took over the brand and combined with the Atkins to form a new company based in Denver called The Simple Good Foods Company. It manufactures low carbohydrate snack bars under the name Atkins. (Atkins, 2020).

Evolutionary dynamics of Forever 21- Atkins partnership:

Forever21 and Atkins established an alliance in July 2019 with a special marketing plan to promote and synchronize their brands. (Frias, 2019). The strategy was inclusion of Atkins snack bars that were delivered to online order packages. The partnership was therefore limited to the transactional stage.

The partnership led to negative consequences since inclusion of Atkins diet bars with orders received lot of negative customer feedback. (Frias, 2019). The partnership was ended in 2019. (Saxena, 2019).

Literature Review

In 2015, GSK invested 25 million pounds for creating the world’s first Research and development open lab to increase knowledge of non-communicable diseases in Africa; the GSK Medicine Research Centre. (MD, H., AM, D., RM, K., SA, G., PM, W., ME, S., 2015). GSK was aware that partnership with other sectors such as NGOs, Government, and other companies would achieve better research outcomes. This partnership with Save the Children has also worked with balanced exchange of values. (MD, H., AM, D., RM, K., SA, G., PM, W., ME, S., 2015).

GSK declared a grant of $75,000 to protect the children affected by a health emergency in Cat lake, Ontario. (Bloomberg, 2019). From 2016, GSK and Save the Children worked with many first nation countries to restore children’s mental health through several programs that helped children express their emotions through art-based activities. These were evaluated by Save the Children to implement research into developing mental health interventions. (Bloomberg, 2019).

Corporates, nongovernmental organizations, and governments need to work together to address existing social and environmental challenges. Non-governmental organizations play an important role in influencing corporates towards increased corporate social responsibility. (Laasonen, Fougere & Kourula, 2012). Governmental organizations cannot effectively regulate and address governance challenges at a global level. Moreover, both NGOs and corporations recognize that shareholder and societal values are fundamentally connected. (Laasonen, Fougere & Kourula, 2012).

Forever21 became one of the top fashion retailers by offering contemporary apparel at affordable prices. In 2015, the company achieved $4.4 billion in global sales. (Wang and Kim, 2019). Since 2017, the brand’s focus on expansion led to their downfall due to accumulated debts from store expansion. Sales dropped by 25% in 2018 due to lack of innovative styles. (Wang and Kim, 2019). Forever 21 filed bankruptcy in 2019. (Wang and Kim, 2019).

Forever21 had established various partnerships and alliances with third party companies to increase sales. Atkins Nutritional, Inc. was one of Forever21's alliances to stimulate market growth. After delivering free samples of Atkins diet bars along with the clothes for online purchasing orders, customers complained about the campaign being offensive to plus-size women. Forever21 defended that the company occasionally surprises the customers with free sample products from third parties in e-commerce purchases, and there was no offence to plus-size customers (Saxena, 2019).

In 2019, Forever 21 has started to reconstruct its business model under new ownership together with Authentic Brands Group, Simon, and Brookfield Property Partners. (Authentic Brands Group, 2020).

Analysis

Forever 21- Atkins partnership:

These two companies have two different core values and mission statements. After the partnership was established between Atkins and Forever21, Forever 21 lost more customers, especially plus-size customers. (Saxena, 2019).

GSK-Save the children partnership:

Alliance drivers:

The mission, strategies and values of both organizations were aligned. Both organizations developed personal connections through volunteering activities. There was joint value creation of chlorhexidine gel. Presence of alliance drivers led to increased social engagement reputation, and achieving mutual and societal benefits.

Alliance enablers:

These are supportive factors that assist the partnership. (Austin, 2000). There was a clear purpose at the beginning of the partnership with focussed attention from both GSK and STC. Both partners engaged in effective communication to assess any gap in meeting of expectations.

In a successful partnership, each partner expects high performance from the other partner, and also looks after the best interests of the other partner. (Austin, 2000). An empowering communication speaks language of business, and of social value. (Austin, 2000).

Strategic fit:

GSK’s goals are to deliver extraordinary products for patient’s. It’s long-term goal is to be one of the world’s most innovative, best performing and trusted healthcare companies. (GSK, 2020). Save the Children’s ambition for 2030 is to create a world in which no child under the age of five dies from preventable causes, and children receive basic education and are free from violence. (Save the children, 2020). The goals of both organizations overlap in the areas of providing quality care for people. Therefore, it is a cross-sector collaboration with natural strategic fit in terms of certain shared goals and values.

Value definition:

GSK’s values are transparency, respect and integrity along with being patient focussed. GSK believes in respecting the community and building trust with the society and the stakeholders. (GSK, 2020). Save the children’s campaigning is rooted in the belief that every last child has the right to survive, learn and be protected. (Save the children, 2020).

The benefits that GSK could derive from the partnership include; enhanced influential sustainability indices, increased corporate brand campaign along with improved discussions on public health programs. (GSK and Save the children partnership, 2019). Save the children can gain the following benefits from this partnership; increased resources to carry out health programs, enhanced procurement skills, training in negotiation and benchmarking. (GSK and Save the children partnership, 2019).

Stage of partnership:

The GSK-STC partnership has transcended the philanthropic and transformational stages and is truly integrated by virtue of high engagement involving multiple facets of the organizations, and joint value creation. This is validated by the following features of value creation in the partnership:

Defining expectations at the beginning of the partnership:

Save the Children will be involved in helping GSK to research and develop medicines for children, with a seat on a new paediatric R&D board to accelerate progress on innovative life-saving interventions for under- fives. GSK will be able to leverage Save the Children’s child health expertise and on-the- ground experience to provide basic health-care to children in the most remote and marginalised communities. (GSK, 2013). The GSK-Save the Children partnership will also focus on widening vaccine coverage to the poorest children, increasing investment in health workers, as well as developing a low-cost nutritional product to help combat child malnutrition. (GSK, 2013).

Common expectations:

Both GSK and STC wanted to save and transform lives of children through new innovative ways. (GSK, 2013)

Value creation:

This partnership shifted along the collaboration continuum from philanthropy to transactional, and is today highly integrated, as validated by the following features;

· Annual forums were held to update both internal and external stakeholders. A joint presentation was made to ensure transparency of progress. Joint teams of SCUK and GSK staff worked at multiple levels across different departments. (Stellar partnerships, 2020).

· Through investment in employee volunteer programs like Orange United, the organization as a whole is involved in the partnership. There is effort on part of both GSK and STC to make the partnership a part of both the organization’s cultures. (Stellar Partnerships, 2020). Institutionalization of the partnership is the ‘collaboration-frontier’ in cross-sector alliances. (Austin, 2000). This helps ensure sustainability and broadens impact. (Austin, 2000)

· Core business and product development; joint value created through development of the chlorhexidine gel. (Stellar partnerships, 2020).

· Joint advocacy activities; the partnership has created ‘critical mass’ in jointly advocating for universal health care coverage and vaccine access at global policy discussions. (Stellar partnerships, 2020).

· Progression along the collaboration continuum depends on the conscious efforts of both partners. (Austin, 2000). The senior-most executives of both organizations were involved with prompt allocation of resources. The motivated senior management were enthusiastic and had clear strategic direction. (Stellar partnerships, 2020).

Reasons for success of the partnership:

The GSK-STC partnership managed the partnership through continued value generation. This was achieved through;

1. Organization- The partnership activities were carried out through well-defined work streams that were periodically monitored through weekly team meetings, monthly steering committees and regular communications updates. (Stellar partnerships, 2020).

2. Trust- Strength of a partnership depends on the depth of trust that can be cultivated. (Austin, 2000). GSK made the extraordinary commitment of welcoming a technical expert from SCUK onto the board of its Research and Development arm; this demonstrated the depth of trust and transparency within the partnership. (Stellar Partnerships, 2020)

3. Communication- It was the key to mobilization of employees and all stakeholders. A communication plan was developed early for each stakeholder group. Open staff forums dealt with initial issues and encouraged attendance from employees across each organization. For GSK this included shareholders, media, regulators and government. Making such public statements about commitment and intent served to inform and lock both partners firmly into the partnership. (Stellar partnerships, 2020).

4. Accountability- STC staff could see clear benefit from their participation and GSK staff could visit the local programs and see first-hand the impact of their efforts. Measurement of metrics for the partnership outcomes were an important part of keeping both organizations motivated and moving forward. (Stellar partnerships, 2020).

5. Learning- GSK has helped STC to build capability through training in negotiation, benchmarking and insights; this helped STC deliver $500,000 in savings per year. GSK has improved quality, including audits of suppliers, handbooks and policies; thus supporting STC to increase the capacity of their procurement team. (GSK and Save the children partnership, 2019).

Value exchange:

As a partnership develops along the continuum, there is a greater need for reciprocity in resources and value exchange. Partners need to resist the urge to revert back to the philanthropic stage. (Austin, 2000).

· The partnership between GSK and Save the Children (STC) has harnessed GSK’s scientific expertise and supply and procurement skills along with the expertise of Save the children in reaching out to the most vulnerable and marginalized children. (GSK and Save the children partnership, 2019).

· STC informed key decisions in the development of an innovative product, the Chlorhexidine gel. More than 2.95 million children under the age of five years have been benefited by the partnership. (GSK and Save the children partnership, 2019).

· All money raised by Orange United, GSK’s employee engagement program is matched by GSK. In turn, GSK has benefited from increased employee engagement. GSK has won several corporate brand awards. (GSK and Save the children partnership, 2019).

Insights from the partnership:

The partnership's achievements in training Health care workers demonstrates that impact at scale can be achieved more quickly through supplementing investments in existing programs, rather than starting new initiatives from the nascent stage.

Leveraging the employee’s skills and sharing expertise can improve capabilities, and achieve deeper understanding of each partner’s organizations. (GSK and Save the children partnership mid- term report, n.d.).

GSK has used the partnership to relaunch its global brand and reinforce its core messages to its global market. It clearly considers that the partnership has added to its future market value and positioned it as a market leader in healthcare. (Stellar Partnerships, 2020)

Value renewal:

The values of a partnership can erode over time. Partners need to find ways to enrich value, recognizing that relationships are dynamic and must adapt to environmental changes to prevent complacency which can potentially depreciate the partnership’s value. (Austin, 2000).

· A willingness to adapt and learn is the driving force behind the success of this partnership. The partnership's united voice is advocating for Universal Health Coverage at global and national levels. (GSK and Save the children partnership mid- term report, 2015).

· The impact of the “Emergency Response” work-stream indicates the benefits that can be realized through a relationship built on a greater understanding of each partner’s strength and priorities. (GSK and Save the children partnership mid- term report, 2015).

· At the launch of the partnership, expectations were high and STC found it difficult to maintain momentum. Typically, many non-profits do not surpass this stage and do not invest in partnership implementation. However, the leaders were firm in their decision to build the partnership stage by stage. This systematic approach was effective at maintaining momentum and achieving regular milestones. (Stellar Partnerships, 2020)

Comparison

SWOT analysis of GSK-STC partnership:

The partnerships strengths included; advantage of established global reputation of save the children, focussed efforts towards research and development, value exchange with regular communication between all stakeholders, presence of GSK’s strong distribution network ensuring regular supply of medications for needy children, and expertise in both organizations. STC is globally respected and has staff that possess a deep understanding of local behaviors and practices, which is critical to the success of any integrated global cause program. (Hessekiel, 2018). The partnership has opportunity to leverage its established transformational expertise and help people affected by the covid-19 pandemic. There is also increased demand for quality health care. The partnership however should be prepared to safeguard itself due to threat from other corporates that could offer greater resources than GSK. The weakness lies in the past reduced credibility of GSK due to allegations of GSK’s failure to report drug safety data. (Forbes, 2012). There is a greater need to develop intangible assets in the form of trust, enhanced personal experiences through joint programs and credibility.

SWOT analysis of Forever 21- Atkins partnership:

The strength of this partnership was the global presence of forever 21 along with affordable fashion. The partnership could leverage the rise in consumer awareness on low carbohydrate healthy food. However, its weakness was the absence of common mission and there was no commitment to value exchange through regular communication. Goals and expectations from the partnership were not defined at the beginning of the partnership. Threat from other famous fashion brands could be overcome by possible collaborations of forever 21 with NGO’s, which not only increases credibility, but provides societal value.

Recommendation

Both NGOs and the private sector tend to have ingrained perceptions of the other which could be affected to induce partnership through interaction, experiential learning and knowing. (Kis & Dilday, 2015). NGOs and private sector companies with prior philanthropic should examine the potential for further partnership growth; the current philanthropic relationship be developed into a resource exchange or integrative program. (Kis & Dilday, 2015).

GSK-STC partnership:

The power of good internal communications for enhancing enthusiasm should not be underestimated. It is important to ensure that the impact and success stories are shared more widely to retain enthusiasm. (GSK and Save the children partnership mid- term report, n.d.).

Suggestion

· A partnership succeeds to the same degree that the partners invest in it. (Austin, 2000). Continuous learning experiences should be created for both partners in order to achieve partnership success.

· Institutionalizing a shift to a partnership model in organizations requires incentives that motivate change in employee behavior. (Austin, 2000). GSK could develop incentive systems to reward employees volunteering activities. A small part of the employee bonus can be attributed to volunteer programs.

· Employees can be given the opportunity to present their volunteering activities at Annual meetings; this can create peer pressure to volunteer thereby incorporating partnership activities into performance objectives.

· GSK and STC could conduct more joint activities like service projects and training sessions. Bringing people together in an ordinary context creates common experiences. (Austin, 2000). The more personal a relationship gets, the stronger is the partnership’s cohesion, which is central to the institutionalization process. (Austin, 2000).

· Relationships in the philanthropic stage are characterized by low expectations. Powerful partnerships are however built on high expectations. (Austin, 2000). GSK and STC should set new targets which should be set considering the abilities of both partners to deliver. If there is inequality in the abilities and commitments of the partners, the partnership will not sustain. (Austin, 2000).

· As partnerships progress, the scale and complexity of engagement expands. (Austin, 2000). Thus there is a greater demand on the partners to execute their commitment effectively so that there remains a balance in the demands and the credibility of the partners is maintained. (Austin, 2000). Both GSK and STC should make joint investments in personnel training and systems development which would enhance organizational capabilities.

· It is advisable for partners to meet regularly at designated times of the year, for instance last Friday of every month to inquire whether each partner’s expectations are being met. Such accountability checkups can identify expectation gaps which should be promptly addressed. . (Austin, 2000).

· As the partnership progresses, the organizations can internalize its partner’s competencies; this impairs the ability of skills acquired to provide any further value. (Austin, 2000). To prevent value erosion, both GSK and Save the Children can search for new activities, or resource exchanges.

· Innovation is the antidote to complacency in a partnership. (Austin, 2000). The GSK-STC partnership can seek to develop more innovative products.

· In order to avoid intrusion by competitors from the alliance marketplace, both GSK and Save the Children should pursue the partnership by involving all facets of the organization, such as increased joint volunteer activities; the more integrated a partnership is, the more insulated it is from intrusion by competitors. (Austin, 2000).

Conclusion

An analysis of both the partnerships highlights the importance of selection of partner with common values and defining expectations at the beginning of a partnership. As with the case of Forever 21- Atkins partnership, failure to carefully select an alliance partner can lead to the partnership resulting in deleterious consequences for the organization. Continuous two-way flow of common values that are renewed periodically can help achieve organizational and societal benefits in the case of corporate- non-profit partnerships than transcend philanthropy.

References