This
article expresses some interesting opinions and theories. The article focuses
on the process of ending inter-organizational relationships. The authors state
that this is a topic that is not discussed much due to the usually negative
nature of ending a business relationship. Usually people do not want to share
their unfortunate experiences so most managers choose not to write about them.
The journal is just slightly older than three years, but I found it interesting
enough and well written enough to take a hit on my grade.
Summary
The
authors start out with defining their definition of “ending”. Because ending is
a very generic term, a reader will get the basic idea of what is meant, but due
to the complexity of ending a business relationship, many authors who write on
this subject feel it is necessary to define the scope of what is meant by the
term. In this journal, the authors define ending as, “implies that all resource ties and activity links between
the participants are broken.”
As anyone could assume, there are countless reasons as to
why a business relationship should end. Usually businesses enter a relationship
to achieve some sort of benefit or to create “some kind of synergy”. A business
relationship can be expected to end whenever the benefit is no longer being received.
Now that is a very simplified explanation as to why relationships are created
and ended. The authors state that there are two subgroups for reasons for an
ending. One being a forced ending, where the reason is usually negative. Two
being a natural ending, where the relationship ends after it has served its
purpose.
The authors have cited many sources in the journal to
researchers that have created models and written about the ending process. The
authors cite works that describe the process of have two main phases, and
subgroups, and more subgroups for each of both of the main phases. In a very
simplified summary of the phases, it seems kind of similar to a twelve step
alcoholism recovery program. Of course the process if much more complicated
than that due to the nature of a business relationship, which sometimes
consists of multiple businesses. Because of these complexities, even the process
models can vary greatly from what actually happens in reality, no ending is the
same as another. The authors include a very nice illustration of a business
relationship process at the end of the journal.
Implications
The authors state that it should be known that even in a
healthy business relationship, the end is almost always inevitable. When undergoing
the process of creating a business relationship, all sides of the arrangement
should identify factors that may result in an ending. Also, managers should
develop strategies for a potential ending while developing their agreement.
Basically the every aspect and potential event should be thought of and agreed
upon how to handle it. It is also important that managers have their own exit
strategies due to potential complications that were not foreseen in an ending.
Work Cited
Tidstrom, Annika, and Sara
Ahman. "The Process of Ending Inter-Organizational Cooperation." Journal
of Business & Industrial Marketing 21.5 (2006): 281-90. Emerald.
Emerald Group Publishing Limited, 2006. Web. 01 July 2012.
http://libproxy.uhcl.edu:2159/journals.htm?issn=0885-8624&volume=21&issue=5&articleid=1567359&show=html.
This may seem a bit simplistic, but this is my view of endings in inter-organizational relationships. I think an inter-organizational relationship is like a marriage. Each business goes into the relationship with high hopes of improved value and competitive edge that mutually benefits each partner. Just as in a marriage, each partner must have the same goals and strategies for reaching those goals as well as the desire to work together to achieve them. Trust is a huge element in the relationship, just as it is in a marriage. However, many factors can erode the trust in a business relationship or can harm it in other ways, and when that trust is no longer there, a relationship suffers, just as in a marriage. Exit strategies in a business relationship are sort of like pre-nuptial agreements that people sign before the wedding.They need to be decided upon and put in place during the strategic planning stages. In the event of the ending of the relationship, each firm knows what will be taken from the experience and what will have to be given up and which strategies will be used to dissolve the relationship.
ReplyDeleteI think it is to the companies' benefits to have everything set in a plan for every contingency if the relationship has to be terminated in the future. Then there are no surprises or hard feelings if and when it does happen, and all the legal issues will be easier to deal with.
Good article and good blog!!
That’s funny Ehric; when I was reading this article I was thinking about pre-nuptial agreements in a marriage. Hearing about different divorces and the legal battles, I’ve thought that marriages are treated a lot like business relationships. Really I think pre-nuptial agreements themselves are good signs of that.
ReplyDeleteI like the implications that you stated Travis. I agree completely. As any other relationship, people or parties can become devious when it ends.
I like the marriage analogy as well Ehric, I didn't really think of it in that way, but it makes complete sense. Travis, I really like how you ended your article by saying that businesses should have an exit strategy in place when entering an alliance of some sort. This is so often overlooked when companies begin a partnership, because the ending of the partnership seems so far away and unheard of at the time. I also think that coordination of goals and expectations is crucial, but I'm it almost sounded like you were explaining a contract (pre-nuptial agreement in the comments as well). In some of the previous blogs we have mentioned how lengthy, wordy contracts can hurt business partnerships by deteriorating trust. However, while reading those articles and blogs, I, like the businesses addressed in this article, had not thought about the end of the business relationship. Great blog.
ReplyDeleteI couldn't agree more with all your comments! A big, lengthy, bullet proof contracts may seem like there is distrust in the relationship. But a contract should be looked at like reasurnace to the other company to signal to your partner that there is nothing to fear.
ReplyDelete