Demonstrate your ability to write or develop a Memorandum of Understanding (MOU) for a Joint venture
Yashu
Week5-Chapter55.pdf
• Chapter 5 - Generating Value
Helps us to understand how value is defined, created, balanced, and renewed in each of the collaboration continuum stages.
Chapter 5
Collaboration Value construct:
1.Value Definition
2. Value Creation 3. Value Balance 4. Value Renewal
Dimensions of the
Collaboration Value Construct:
Happens before the collaboration begins
Happens throughout the collaboration
Identification of the benefits each partner and society could derive from the collaboration . I.e.
For NGO: Financial resources
Services or goods
Meet other corporate partners
Technology & expertise
New perspectives
Greater name recognition
1. Value Definition
For Corporation Enhanced Reputation
Improved employee morale,
retention, and recruitment
Enriched corporate culture
Customer loyalty
Increased investor loyalty
Identify how this collaboration provides value to society :
Marks and Spencer and Oxfam?
1. Value Definition
Mission: Eradicate poverty by improving the lives rights of females
Mission: Sell high-end/ designer merchandise
How can this unlikely collaboration provide value to society?
Friends of the Earth and GE-Hitachi?
1. Value Definition
How can this unlikely collaboration provide value to society?
Friends of the Earth and GE-Hitachi
1. Value Definition
Joint research into GE- Hitachi’s proposed PRISM reactor which could generate carbon-free power by consuming nuclear waste and plutonium.
McDonalds and Greenpeace ◦ In 2006 the partners agreed not to purchase chickens that
were fed soya from deforested areas in the Amazon
How can these partners evolve and innovate so as to continually provide social value?
1. Value Definition
Decide if value can / should be created at all. ◦ Will the collaboration weaken the very characteristics
that make the organizations appealing partners in the first place?
◦ I.e. the World Bank’s economic policy to privatize state-owned enterprises was incompatible with its program to promote gender equality in the Health care sector in Bangladesh
◦ As a result, violence against women increased!
1. Value Definition
Partners must be clear about: ◦ their expectations from the partnership
◦ their ability to meet their partner’s expectations
◦ their mutual goals
◦ the benefits to society
◦ how to quantify / measure value of the partnership
1. Value Definition
What should be done if Partner A does not have the resources to meet Partner B’s expectations?
Narrow the gap by: 1. Adjusting expectations of Partner B downward or
2. Enhancing competencies / increasing resources of Partner A
1. Value Definition
Example: What can be done to narrow the gap?
Partner A expects Partner B to put it’s logo on all promotional materials
But Partner B has already printed its annual budget of pamphlets / promotional materials
1. Value Definition
Example: What can be done to narrow the gap?
Partner A expects Partner B to provide access to its current membership lists for Direct marketing
Partner B is in Canada where privacy legislation prohibits the disclosure of such information without express consent.
1. Value Definition
Quantifying Benefits Society and government regulators expect
NGOs to: ◦ be accountable for the funds they receive ◦ provide assessments of success
I.e. Likes on Facebook
1. Value Definition
Qualifying Benefits Since it is difficult to quantify values,
sometimes, qualitative assessments are appropriate
I.e. Improved organizational culture or community attitude
1. Value Definition
How do NGOs typically measure or define collaboration value?
◦ $ or in-kind resources received I.e. “boots”
◦ Enrichment of perspectives: I.e. Management acumen and marketing skills
◦ Access to other potential corporate partners I.e. introduction to Bill Gates
◦ Community support I.e. Volunteerism or likes on Facebook
1. Value Definition
How do Corporations measure collaboration value?
Benefits of cause-related marketing: ◦ I.e. Audience reach, new location, new
demographic.
Human resource enhancement: ◦ Employee morale, retention, commitment,
recruitment
Customer loyalty / retention ◦ Customers that deliberately purchase from the
company due to socially responsible actions
1. Value Definition
Source: https://www.kulacauses.com/about -kula/
How do Corporations measure collaboration value?
1. Value Definition
Source: https://www.kulacauses.com/about-kula/
Recognizing Costs Alliance partners must weigh benefits
against costs. I.e.
Underexposure ◦ I.e. forgone opportunity cost
Investment in Human Resources ◦ i.e. employee volunteer hours
Misexposure ◦ i.e Negative goodwill
1. Value Definition
Misexposure Designed by DDB Brasil for WWF http://www.americasbestcompanies.com/blog/ dos-donts-advertising.aspx
“ The Tsunami Killed 100 Times More People Than 9/11.
Once the partnership has formed:
How can partners create value for each other and society?
How can partners combine or mobilize resources to create value?
2. Value Creation
• It depends on source and magnitude of: 1. Generic resource transfer 2. Core competencies exchange 3. Joint value creation
Resources Value Source Collaboration Continuum Stage
Generic Resource Transfer
Common to most organizations
Core Competencies Exchange
Distinctive / core competencies
Joint Value Creation
Joint Products / Services
2. Value Creation
Resources Type
Value Source
Collaboration Continuum
Stage
Generic Resource Transfer
Core Competencies Exchange
Joint Value Creation
Resources Value Source Collaboration Continuum Stage
Generic Resource Transfer
Common to most organizations
Core Competencies Exchange
Distinctive / core competencies
Joint Value Creation
Joint Products / Services
2. Value Creation
Resources Type
Value Source
Collaboration Continuum
Stage
Generic Resource Transfer
Common to most organizations
Core Competencies Exchange
Distinctive / core competencies
Joint Value Creation
Joint Products / Services
2. Value Creation
Resources Type
Value Source
Collaboration Continuum
Stage
Generic Resource Transfer
Common to most organizations
$ or Goodwill
Core Competencies Exchange
Distinctive / core competencies
Non-replicable benefits, products / services
Joint Value Creation
Joint Products / Services
Innovation through synergetic combination of capabilities
Resources Type
Value Source
Collaboration Continuum
Stage
Generic Resource Transfer
Common to most organizations
$ or Goodwill Philanthropic
Core Competencies Exchange
Distinctive / core competencies
Non-replicable benefits, products / services
Transactional
Joint Value Creation
Joint Products / Services
Innovation through synergetic combination of capabilities
Integrative or Trans- formational
2. Value Creation
Social Benefits What value does the collaboration create for
society ?
◦ Personal enrichment and experience of employees
They create enthusiasm and critical mass
2. Value Creation
Social Benefits What value does the collaboration create for
society ?
◦ Personal enrichment and experience of employees
2. Value Creation
• They create a future benefit stream as employees engage in other community betterment activities
2. Value Creation
Social Benefits ◦ Successful cross-sector partnerships provide inspirational models for others to follow . I.e. The TNC / Georgia Pacific collaboration
inspired several other successful collaborations. I.e. TNC and the Dow Chemical Company
TNC and the Meijer Corp.
http://www.youtube.com/watch?v=ryy_8aB-vc4
Multiparty Collaboration The greater the # of partners…the greater the opportunity
for synergy
I.e. The Sustainable Food Laboratory focuses on:
innovation in food value chains that assures the well- being of all key players, from farmers to consumers
practical ways to monitor soil fertility and facilitate climate adaptation.
2. Value Creation
Multiparty Collaboration The greater the # of partners…the greater the
opportunity for synergy
I.e. The Detox Challenge. Greenpeace collaborates with Nike, Reebok, Adidas, H & M, and other key sports apparel businesses to eliminate toxins in their Southeast Asian supply chains (starting with China).
2. Value Creation
The further the partnership develops along the collaboration continuum, the greater the need for balance and reciprocity in resource and value exchange
◦ Imbalance erodes trust and motivation
◦ Partners need to resist the urge to slip into traditional role where corporation is the “giver” and the NGO is the “receiver”
3. Value Balance
Often one partner grows faster than the other partner creating an imbalance of power, needs, and competencies
I.e.
3. Value Balance
Over time, the benefits / value of the partnership evolve or erode
Partners need to find ways to preserve and enrich the alliance’s value.
4. Value Renewal
Partners need to recognize: ◦ That the environment & relationships are
dynamic If the partners do not keep up with changes,
complacency can set in
◦ The potential for depreciating value of the collaboration Unique skills of one partner become
internalized by the other partner therefore redundant
4. Value Renewal
Partners need to recognize:
◦ The law of diminishing returns
Once the networks / distribution channels have been established, there is no longer an urgency for the partnership
◦ Competition
Competing corporations may offer better “deals” to NGOs
4. Value Renewal
What can partners do to renew value? 1. Search for / investigate new resource exchanges
with the existing partner
2. Search for a new partner
3. Investigate new initiatives / innovations
4. Acknowledge value depreciation and exit the partnership
4. Value Renewal
