Partnerships: Managing Intra- and Interorganizational Relationships – The Global Value Chain Network

In recent years the pathway to revenue growth, profitability, and cash flow has been largely dominated by partnerships. These partnerships have varied depending upon the objectives of the organizations involved together with preferred routes to achieving their objectives, the time-span available to achieve the targets, the opportunities identified, the level and type of growth pursued, and the amount of risk they were prepared to accept. These criteria determine the scope of the required response capabilities. 0perational partnering is typically cost-led and robust for as long as the advantage prevails; value builders, by definition, are long-term and involve strategic partnering in which individual organizations create networks of organizations, each of which contributes essential core capabilities, in order to create a value chain network that can compete with other networks successfully. The global financial crisis brought about a fiscal conservatism and a preference for minimizing investment. Large organizations are increasingly turning to “capital recycling” (whereby they are selling assets (businesses or divisions) of activities that no longer return a substantial proportion of the organization’s income) and “financial engineering” repurposing tangible assets (e.g., production facilities). GM reinstated a retired plant to manufacture the Bolt EV, and intangible assets, and Nissan-Renault resurrected the Dacia brand for a low-priced vehicle. Transformational/integration partnering offers organizations the opportunity to change both strategy and structure in a cost-effective manner.