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Strategic HR Management in Global Alliances – A Case Study of Clorox and Green Works

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Strategic HR Management in Global Alliances – A Case Study of Clorox and Green Works

Implementation Issues

Companies are increasingly implementing strategic alliances to apply, expand, and apply knowledge and ultimately attain a competitive edge. However, despite their possible benefits, strategic partnerships are not always successful. While several strategies can be employed to foster their success, challenges still abound. Studies cite various reasons why alliances fail, including business conflicts, clash of culture, communication barriers, and unclear definitions of roles and responsibilities. Management of the early stages of alliance implementation, therefore, becomes a critical step in securing long-term benefits as it sets out a clear frame of reference. This study analyzes the HR strategies for promoting a successful alliance and evaluates the specific challenges to implementing successful alliances among organizations.

HR Strategies for Promoting Successful Alliances

Essential steps for alliance agreement 

Several HR strategies can demonstrate a successful strategic partnership process, ranging from assessment to robust governance. One of the drivers of a successful alliance is strategic consideration. This step involves the determination of the right partnership type within the context of the organizational strategic planning process (Baloh et al., 2008). A company’s business strategy should not operate in reaction to opportunity. Rather, it should be executed with purposeful consultation and planning to increase the chances of success. The method also involves reaffirming and modifying long-term objectives and evaluating market dynamics. A prime example of this regard is IBM, which realizes a larger portion of its total net income through the external commercialization of its expertise (Baloh et al., 2008). Before the firm engages in the outsourcing of knowledge, it carefully consults and considers investment based on strategic consideration to incur neither the cost nor the risk of in-house innovation.

The subsequent step in promoting a successful alliance involves establishing organizational buy-in. The strategy is meant to curb employee disappointment and contain possible resistance to change. As such, the HR managers should outline the rationale for the collaboration and communicate it across the entire organization. The succeeding step in the process is partner engagement. A company usually engages a prospective partner once decision-makers approve the partnership plan (Gibbs, R., & Humphries, 2009). The next stage is establishing strategic and cultural compatibility. The strategy is best guided by broad concepts such as the target market, the potential synergies, the compatibility of respective organizational philosophies, and the opportunity in its scope. After the compatibility, it is best to perform due diligence on the contractual arrangements to counterbalance potential skepticism (Gibbs, R., & Humphries, 2009). This step is followed by negotiation and closing of the partnership. The negotiations build mutual trust and forge common goals between partners. Partnership governance also comes in as an important step during the alliance creation process. Robust governance will be a major cause of successful partnership success. The nature of the established relationship and the management preference determine the effectiveness of governance.

Importance of relationship management to the success of an alliance

Managing strategic alliances is critical for the success of the contract and can help achieve long-term goals by mitigating potential pitfalls. Studies show that poor management is the leading cause of strategic partnership failure (Franco, 2011). Even so, careful management that is committed to all aspects of strategic plans is a critical underrating of such a risky endeavor. One benefit that suffices from proper relationship management of an alliance is the achievement of the partnership goals. Franco (2011) argues that relationship management between partners should include culture, competencies, and assets to provide a competitive advantage. Usually, a strategic alliance involves linguistic barriers and cultural differences, with a lack of compatibility leading to alliance failure. As such, proper relationship management may help to overcome the challenges and contribute to stronger links between partners, ultimately achieving the predetermined objectives.

Challenges to Implementing a Successful Alliance

Potential obstacles in strategic alliance

The relationship aspect of strategic alliance provides managers with a series of challenges, leading to partnership failure. One of the key challenges that could prevent alliance partners from maintaining productivity is the communication barrier. An overwhelming number of studies confirm that organizational managers often face challenges regarding establishing and maintaining communication (Kumar, 2014). One factor behind this state of affairs is the language difference, leading to a misunderstanding between partners. Other contributing factors to communication problems include poor communication, personality conflicts, and the physical distance between partners. Illustratively, poor communication or lack of a common language discourages the building of interest, trust, and supporting the alliance. Communication problems imply that the strategic collaboration lacks transparency, consequently thwarting the partner’s goals, expectations, and objectives. Good communication is the panacea to the aforementioned challenge since it reduces uncertainty, minimizes misunderstanding, and promotes sustained cooperation.

Accordingly, cultural difference plays a big role between partners and could prevent alliance partners from retaining key talents. Quite often, strategic collaborations are plagued with cultural mismatch and cultural misunderstanding. Kelly et al. (2002) posit that the two issues are part of the major causes of alliance failure. For instance, the difference between cultures in language can be a potential source of conflict in a working relationship; hence, there is a heightened misunderstanding and mistrust among employees. The situation could force some employees to leave firms involved in an alliance with other companies. Extant studies also show that some forms of cultural conflicts are inevitable, especially when firms with different beliefs and values partner (Russo & Cesarani, 2017). To prevent the total breakdown of an alliance by maintaining key talents, effective diversity management is necessary throughout the alliance process. According to Russo and Cesarani (2017), partnerships that are based on effective management of cultural diversity have an easy time maintaining a diverse workforce, ultimately benefiting their brands. Thus, it is important to manage cultural differences to promote trust and cooperation among partnering employees.

In the same vein, poor designation of roles and responsibilities is a potential obstacle that could prevent alliance partners from achieving long-term implementation of the buy decision. Typically, the buyer perspective is based on a clear definition of the roles of each partner. In successful alliances, managers always relinquish specific roles and functions to pave the way for accountability for performance and control of certain activities. Role ambiguity can cause conflict in a strategic alliance as people tend to shift blame in the event of mistakes. The best solution to this regard is a clear understanding of partner roles and a clear definition of responsibilities. Task definition could influence the working together of partners, leading to a successful alliance.

 References

Baloh, P., Jha, S., & Awazu, Y. (2008). Building strategic partnerships for managing innovation outsourcing. Strategic Outsourcing: An International Journal, 1(2), 100-121. https://doi.org/10.1108/17538290810897138

Franco, M. (2011). Determining factors in the success of strategic alliances: an empirical study performed in Portuguese firms. European J. of International Management, 5(6), 608. https://doi.org/10.1504/ejim.2011.042734

Gibbs, R., & Humphries, A. (2009). Strategic alliances& marketing partnerships gaining competitive advantage through collaboration and partnering. Kogan Page.

Kelly, M., Schaan, J., & Joncas, H. (2002). Managing alliance relationships: Key challenges in the early stages of collaboration. R and D Management, 32(1), 11-22. https://doi.org/10.1111/1467-9310.00235

Kumar, R. (2014). Managing ambiguity in strategic alliances. California Management Review, 56(4), 82-102. https://doi.org/10.1525/cmr.2014.56.4.82

Russo, M., & Cesarani, M. (2017). Strategic alliance success factors: A literature review on alliance lifecycle. International Journal of Business Administration, 8(3), 1. https://doi.org/10.5430/ijba.v8n3p1

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Question 

With any partnership, there are sure to be implementation issues, if not problems. Consider the case of Clorox and its Green Works brand. Clorox initially licensed the Family Pure brand from a Japanese company. Then, they asked European partners to help develop cleaners made from plant-based ingredients. Their aim was to find eco-friendly cleaners that work at least as well as effective harsh chemicals like bleach (Makower, 2008). After testing with consumers, Clorox changed the name to Green Works and co-branded it with Clorox.

Although the Clorox/Green Works process serves as a partnership success example, imagine that you are a key HR professional intimately involved in its development and that post-agreement, serious implementation problems develop in many phases of the relationship. For example, suppose that the Japanese company later claimed that they were not being sufficiently compensated. Perhaps you learned that the European partners intended to develop products of their own based on the research that Clorox commissioned. Consider the key elements of a response plan, anticipating contingencies that might alter the decision on what actions you take. The elements of your plan should include considerations related to culture, costs, competencies, compliance, and competitors.

 3- to 4-page paper:

References:

Gibbs, R., & Humphries, A. (2009). Strategic alliances and marketing partnerships: Gaining competitive advantage through collaboration and partnering. London, NI: Kogan Page Limited.

Baloh, P., Jha, S., & Awazu, Y. (2008). Building strategic partnerships for managing innovation outsourcing. Strategic Outsourcing: An International Journal, 1(2), 100-121. doi:http://dx.doi.org.ezp.waldenulibrary.org/10.1108/17538290810897138

Burdon, S., Chelliah, J., & Bhalla, A. (2009). Structuring enduring strategic alliances: The case of shell Australia and Transfield services. The Journal of Business Strategy, 30(4), 42-51. doi:http://dx.doi.org.ezp.waldenulibrary.org/10.1108/02756660910972640

Mehta, S., & Peters, L. S. (2007). Outsourcing a Core Competency. Research Technology Management, 50(3), 28–34. https://doi-org.ezp.waldenulibrary.org/10.1080/08956308.2007.11657438

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