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Dejan PAUVIT Memoire.pdf

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The path for multinationals to succeed in a cooperative agreement
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Dejan PAUVIT Memoire.pdf

  1. 1. 59 rue Nationale Établissement d’enseignement supérieur technique privé reconnu par l’état. 75013 Paris Membre de la Conférence des Grandes Écoles. +33 (0)1 53 36 44 00 AS ESGCV — SAS AU CAPITAL DE 13 267 469 € SIREN 752 535 476 — SIRET 752 535 476 00200 Research Thesis The path for multinationals to succeed in a cooperative agreement Written by PAUVIT Dejan Specialization: International Business Director of the research thesis: BESSON Ekaterina Academic year : 2021-2022
  2. 2. The path for multinationals to succeed in a cooperative agreement I-1 La charte de non plagiat et de respect des règles de propriété intellectuelle La contrefaçon est l’appellation juridique du plagiat, sa version condamnable. A ce titre, elle constitue un délit. L’article 335-3 du Code de la propriété intellectuelle en précise la nature : il s’agit de ʺ toute reproduction, représentation ou diffusion, par quelque moyen que ce soit, d’une œuvre de l’esprit en violation des droits d’auteur, tels qu’ils sont définis et réglementés par la loiʺ. Elle est susceptible de donner lieu à des sanctions civiles et pénales. Ainsi, le plagiat consiste à copier, contrefaire ou falsifier un document sujet à une évaluation et d’utiliser en tout ou partie, l’œuvre d’autrui ou des passages tirés de celle-ci, sans les identifier expressément comme citations et dans l’intention de les faire passer pour siens. De même, lorsque vous reprenez « mot pour mot » un passage d’un auteur, il faut impérativement le signaler avec des guillemets et indiquer en bas de pages, la source ainsi que son numéro de page. SANCTIONS DISCIPLINAIRES Le plagiat est sanctionné par :  un 0/20 sur le dossier ou le mémoire de recherche appliquée  le passage devant le Conseil de Discipline  les sanctions peuvent aller jusqu’à l’exclusion définitive des examens, toute récidive peut se traduire par une exclusion temporaire ou définitive de l’établissement. PSB – Paris School of Business dispose du logiciel Ouriginal : système entièrement automatisé pour la prévention et contrôle de plagiat. Les enseignants analysent, de manière systématique, tous les mémoires rendus par les étudiants afin de déterminer les éléments plagiés.
  3. 3. The path for multinationals to succeed in a cooperative agreement I-2 DÉCLARATION SUR L’HONNEUR DE NON PLAGIAT ET RESPECT DES RÈGLES DE PROPRIÉTÉ INTELLECTUELLE Année scolaire en cours : 2021-22 Spécialité : International business Titre du mémoire: The path for multinationals to succeed in a cooperative agreement Nom du tuteur de mémoire de recherche : BESSON Ekaterina Je soussigné Dejan PAUVIT, atteste avoir pris connaissance du règlement intérieur de l’école et certifie que le mémoire de recherche appliquée ci-joint ne fait l’objet d’aucun plagiat. Par ailleurs, je m’engage à respecter les règles du dit règlement intérieur et les sanctions disciplinaires qui en découlent. Paris, le : 01/09/2022 Lu et approuvé
  4. 4. The path for multinationals to succeed in a cooperative agreement I-3 AUTORISATION DE MISE A DISPOSITION ET DE DIFFUSION D’UN TRAVAIL ETUDIANT Madame, Monsieur, Dejan PAUVIT déclare avoir réalisé un Mémoire de Recherche dans le cadre de la formation de mon établissement scolaire en vue de l’obtention du diplôme de PSB Paris School of Business, grade Master visé par l’Etat, sous la direction de Mme Ekaterina BESSON dans le cadre de ma 5ème année en International business Intitulé du mémoire : The path for multinationals to succeed in a cooperative agreement Informé(e) de mon droit de propriété intellectuelle sur les travaux produits dans le cadre de mon cursus d’étude, j’autorise PSB Paris School of Business à mettre à disposition des étudiants et enseignants chercheurs de l’établissement mon Mémoire de Recherche Sous forme papier : OUI Sous forme numérique avec accès protégé : OUI Fait à Paris, le 01/09/2022 Lu et approuvé
  5. 5. The path for multinationals to succeed in a cooperative agreement I-4 Acknowledgment: First of all, I would like to thank Mrs. Ekaterina BESSON, my thesis tutor, who has been a great support and encouragement throughout the elaboration of this thesis. I would also like to thank Mrs. Marie-Claire MRJEN, head of the Master international business, who introduced and learned through her courses the global functioning of business strategy and partnerships. A big thank you also to the people who took the time to help us in the reading of the thesis. I would also like to thank the Paris School of Business for allowing me to do this thesis as part of my studies. I would particularly like to thank my tutor and my colleagues in the company who taught me a job and propose explorations in the framework of this thesis. I would like to thank the people who accepted to interview them on sometimes delicate subjects and to have given their time. Finally, I would like to thank all the people who, from near or far, helped me to elaborate this thesis.
  6. 6. The path for multinationals to succeed in a cooperative agreement I-5 Abstract Partnerships and alliances are now considered an integral part of corporate strategy, especially for multinational companies. Multinationals quickly realized that working with other companies and even competitors could yield greater benefits than if they had done it alone. This thesis will focus on the importance of partnerships and alliances of multinational companies and how these companies succeed in their strategy. This research aims to test the hypotheses of successful business arrangements of multinationals but also to nuance the actions that are sometimes difficult to succeed in a complex and competitive environment. Key words: Partnership, Alliance, Multinationals, Strategic management, Trust. Résumé Les partenariats et les alliances sont désormais considérés comme faisant partie intégrante de la stratégie d'entreprise, en particulier pour les multinationales. Les multinationales ont rapidement compris que le fait de travailler avec d'autres entreprises et même avec des concurrents pouvait leur apporter des avantages plus importants que si elles avaient agi seules. Cette thèse se concentrera sur l'importance des partenariats et des alliances des entreprises multinationales et sur la manière dont ces entreprises réussissent dans leur stratégie. Cette recherche a pour but de tester les hypothèses de réussite des arrangements commerciaux des multinationales mais aussi de nuancer les actions qui sont parfois difficiles à réussir dans un environnement complexe et compétitif. Mots clés : Partenariat, Alliance, Multinationales, Gestion stratégique, Confiance
  7. 7. The path for multinationals to succeed in a cooperative agreement I-6 Table of contents List of tables and figures........................................................................................................................I-1 Introduction...........................................................................................................................................I-2 I. Literature review...........................................................................................................................I-4 A. Establish partnerships in multinational firms in order to find a win-win situation ..................I-4 1. Characteristics and key points...............................................................................................I-4 2. Reason for creating a cooperative agreements ....................................................................I-7 3. How select the partner in order to enhance the relation...................................................I-11 4. Traditional Approach comparing to partnerships...............................................................I-13 5. Success factors of partnerships...........................................................................................I-15 B. Partnerships can be difficult to set up and seen as a failure ..................................................I-19 1. Cooperate in order to compete...........................................................................................I-19 2. Notion of performance........................................................................................................I-21 3. Partnerships seen as unstable and difficult to evaluate .....................................................I-23 4. Organizational difficulties and cost.....................................................................................I-25 5. Trust on Strategic Partnerships...........................................................................................I-26 6. Failure partnership..............................................................................................................I-28 II. Case study...................................................................................................................................II-30 A. Company presentation...........................................................................................................II-30 B. Focus on partnership with start-ups ......................................................................................II-30 III. Methodology:........................................................................................................................III-32 A. Introduction:..........................................................................................................................III-33 B. Field of the research..............................................................................................................III-33 C. Research method ..................................................................................................................III-34 D. Structure of interviews..........................................................................................................III-35 E. limit of the research ..............................................................................................................III-36 IV. Results ...................................................................................................................................IV-37 V. Discussion and analysis ..............................................................................................................V-42 A. Traditional approach comparing to partnerships ..................................................................V-42 B. Data protection ......................................................................................................................V-43 C. A partnership failed................................................................................................................V-44 Conclusion ..........................................................................................................................................V-45 Bibliography........................................................................................................................................V-46 Annex..................................................................................................................................................V-48
  8. 8. The path for multinationals to succeed in a cooperative agreement I-1 List of tables and figures Figure 1. The main comparison between the traditional approach and the supplier partnerships by F. Ian Stuart Table 2: Performance measures for partnerships according to Child, 2005.
  9. 9. The path for multinationals to succeed in a cooperative agreement I-2 Introduction The globalization of the economy and the internationalization of markets have led to an unprecedented development of strategic alliances and cooperative agreements. An increasing competitive world forces companies to differentiate themselves in several possible ways in order to continue growing other than the traditional strategic methods; they represent a vast and complex field of research at the same time. Many economists have spoken about this strategic aspect that multinationals are nowadays aware. Multinationals give a great importance of this strategy. They are making business each other even competitors together. In this plan, we are seeing that the strategy goes against a traditional aspect with alliances and partnerships, companies will earn money that the traditional business cannot deliver, it can be effective ways learn quickly a new market with existing firms, to bypass governmental restrictions and have access to different resources, reduce the cost of research and development for instance. According to Gary (2004), strategic partnerships are estimated to represent more than 20% of the revenues of international groups and this percentage does not stop growing. Big multinationals firms have the strategic partnership in mind and lot of companies have succeeded thanks to key partnerships they have done. Nike, the largest sportswear company in the world does not manufacture a single shoe. Airbnb does not have properties. This highlight the fact that multinationals can definitely succeed thanks to alliance. However, strategic partnerships are not easy to establish and develop. Partnerships are failing due to several mistakes made by management. By leveraging well-managed strategic partnership arrangements, businesses can win in otherwise uneconomical markets. A successful partnership requires a lot of time and energy for everyone involved. It is important for companies to enter into a comprehensive plan and strategic partnership that outlines detailed expectations, requirements, and expected benefits. Understanding the causes of failure can help the strategic management prevent potential issue and adapt the relation between partners during joint-venture process, negotiation to reduce the possible failure. (Garry D. Bruton 1998 “Anatomy of a Failed High Technology Strategic Alliance”)
  10. 10. The path for multinationals to succeed in a cooperative agreement I-3 In this chapter, particular attention is paid to the relation of these partnerships in order to understand the conditions for their success. More specifically, our interest will be in identifying the factors that will focus on identifying the factors that affect the performance of partnership. Firstly, we be focusing on the creation of a strategic partnership between Dyad, why it can be a real advantage to do this strategy. Secondly, we will see that to succeed in this kind of agreement it could be difficult due to several issues and failure. After that, I thought that doing a case study with the big multinational Thales should be interesting. We will see the methodology and discussion after in order to explain more about the work I have done. We will handle this work by responding to the research question “How how to set up a successful partnership with a multinational company”.
  11. 11. The path for multinationals to succeed in a cooperative agreement I-4 I. Literature review A. Establish partnerships in multinational firms in order to find a win-win situation 1. Characteristics and key points In the introduction I argued that partnerships have received a lot of attention from researcher (Das and Teng, 2002; Rosenkopf, Metiu, and George, 2001; Arino and Ring, 2010) A strategic partnership is “Strategic partnerships are collaborative organizational arrangements that use resources and/or governance structures from more than one existing organization” (Andrew C. Inkpen, 2005, P.403). Traditionally, multinationals firms are willing to keep their independence and put their competencies in their key company strategy. Nowadays, strategic partnerships have become omnipresent in many industries. The complexity and uncertainty in markets have increased to the point that creating an alliance is no longer an option. Strategic alliances have the potential to generate a variety of benefits for partner companies, such as access to new technology and complementary skills, economies of scale, and reduced risk. Nowadays the terms alliance and partnership are mixed and there is a confusion about the real meaning of the word. Frédéric Fréry (2011) explains the term of alliance and partnership in 2011. For the author, the terms alliance and partnership refer to agreements between several organizations but are not really synonymous. The alliances correspond to agreements made between competing organizations while the partnerships designate agreements made between organizations that are not.
  12. 12. The path for multinationals to succeed in a cooperative agreement I-5 There are two main types of partnerships.  Outsourcing partnerships concern organizations that are not in competition with each other. For example, car manufacturers and their main suppliers jointly develop new technologies.  Symbiotic partnerships concern organizations that are not only competitors but also not customers or suppliers of each other. There is no commercial transaction; it is interesting to know why they decide to work together. It is because they sell to the same customer and it is better for these companies to share the implementation or marketing courses. This is the type of partnership that exists between washing machine manufacturers and laundry detergent manufacturers that finance a common advertising policy. About alliances, the authorities of the competition consider them as illegal because by definition it is a question of agreement between competitors and thus of obstacle to the free competition. In order to be authorized, it must be demonstrated that the alliances bring an advantage to the consumer. There are two types of alliances  Complementary alliance: It brings together competitors whose scope of activity is not identical, for example, slightly different product lines or operate in geographical areas that are not completely grouped together, such as alliances between airlines like SkyTeam. These companies can offer a greater number of connections on a bigger area.  Additional alliance: These alliances bring competitors in order to achieve a faster return on investment and thus provide a more attractive offer to the customer. This is the case of Airbus, which was originally an alliance of French, German, Spanish and British airlines, or the many alliances in the automotive industry that allow manufacturers to share development and production costs. This demonstrates that there is a real difference between the term of alliance and partnership. The first term include the commitment between competitors that can be more difficult to set up and the other between organizations that are not in competition.
  13. 13. The path for multinationals to succeed in a cooperative agreement I-6 Nevertheless, these two strategies are difficult to establish and companies are willing to engage in such commitment and choose to mutualize their resources in order to carry out a common activity (Mayrhofer, 2003). These partnerships are based on a relational contract between the firms. Currently, there are many forms of BtoB partnerships. Thanks to the notion from Mayrhofer in “Les facteurs de réussites du marketing relationnel, 2003”. We can highlight different form of partnerships:  The Joint venture is a form of partnership that involves the creation of a new independent legal structure by two or more partners. Companies, even competitors, work together. They use synergies or create themselves in order to achieve common goals.  The acquisition of an equity interest consists of the acquisition of a minority or cross share of the capital of a company.  Contractual agreements (license, franchise, R&D agreement, etc.) are forms of partnership formalized by contracts. Until the late 1980s, joint venture was considered synonym with the term alliance. Nowadays, there is a large number of new forms of alliances; researchers have studied a much broader range of cooperative arrangements that can actually appear. (Hagedoorn, 1993). Strategic alliances of management does not exist when a relationship is based on an arms-length market- based transaction. In addition, alliances could create interesting managerial problems due to the exchange of information and knowledge between multinational firms. The knowledge may be associated and secured with skills, technologies, future plans. When knowledge is exchanged between firms, there is a risk that the knowledge may be appropriated or corrupted.
  14. 14. The path for multinationals to succeed in a cooperative agreement I-7 2. Reason for creating a cooperative agreements Why multinationals firms establish a strategic alliance instead of doing alone. They usually include a formal agreement between the two parties to pursue mutually beneficial goals. Like we saw in the previous idea, there may or may not be a contract, but both parties clearly understand the goals of the partnership and are committed to work together in order to achieve the desired results. The firm can create value in a way that it is not possible to achieve it alone. Value creation in this case refers to the process of the mix between partner's capabilities and resources to accomplish a common task that has the potential to generate money or other benefits for the partner. While the perceived value of each partner is not necessarily the same and is rarely the same, each partner in the alliance must have certain advantages for the alliance to be the preferred choice. (Porter and Fuller, 1986). Thus, selecting the appropriate partner is an important managerial decision (for research in this area, see Geringer, 1988). An increasingly important goal of cooperation in the worldwide competition is one of the key strategy for companies. Given the choice between alone development and alliances, many companies are choosing alliances because they allow for faster strategy execution. For example, nowadays we know that alliances are no longer legally required in Chinese industries; companies can easily set up subsidiary. However, the entering into the Chinese market is often slower and more difficult than with alliances. Thanks to the technology, market access, companies can create value thanks to a partnership. An alliance can be a faster way to establish a competitive advantage or development rather than be focus on internal development. This is the reason why we have seen lot of alliance in industries.
  15. 15. The path for multinationals to succeed in a cooperative agreement I-8 The 21st century telecommunications industry is a great example of the industry who has been using partnerships to rapidly changing technology and develop new opportunities. The first reason is that multinationals want to attract new customers and expand the market coverage. Perhaps, the most common reason to enter into a strategic partnership is to gain access to new markets and customers. In this context, environmental uncertainty and the degree of risk are high. A strategic partnership with a local company will reduce this uncertainty and share the risk by giving the partner the necessary skills to create value and the necessary skills to adapt to the market complexity. Both companies will benefit from the offer of a new product that could complete an already existing range. By forming a strategic partnership, companies can serve larger territories without investing in additional infrastructure or expanding their distribution networks. For example, a huge multinational logistic company like DHL might collaborate with an office supply company who wants to deliver in their worldwide stores. These companies are willing to attract new potential customers and are expanding their territories without the need to add additional stores or routes. The second reason that it is important to highlight is that multinational companies would like to set up a partnership to develop the brand awareness. The big coffee company STARBUCKS give a huge importance on partnerships agreements with places like airports, Amusements Park and other locations who provide coffee service to direct customers. Thanks to this partnership, the visitors will buy Starbuck’s product but also recognize that the brand is present on this location and they will appreciate the convenience of having brands they recognize available. It is another form of marketing that Starbucks is doing well. The strategy has increased its overall brand awareness and multinationals are willing to pay an expensive amount to sell in these famous locations because they know that the return on investment will be much more profitable.
  16. 16. The path for multinationals to succeed in a cooperative agreement I-9 Multinationals are doing partnerships also if they would like to extend their products and be diversified. Companies that want to attract new customer and new market should also develop product line by creating strategic alliance. Thanks to this agreement, the company could develop rapidly with the help of other who is well implementing on the market that the company would like to reach. By aligning yourself with a business enterprise that gives complementary products, the win- win situation should be the result of this agreement. One of the best example for what we provide is probably the partnerships in 2008 with the famous audio speaker manufacturer BOSE and the carmaker RENAULT. In this agreement, we are seeing the win-win situation that all these kind of companies want to have. They can be present in new market without doing a lot of investment. However, the objective of these partnerships should not be reduced just to the development of new geographical markets and new potential customers (Blanchot, 2006). The companies for example, can set up R&D partnerships, particularly in high-tech industries, where they are mainly looking for new resources and industries to innovate. In addition, partnerships help to minimize transaction costs by reducing, the costs of negotiating contracts. In the supplier way of thinking, this kind of relation will be interesting for him because he has an important contract in order to grow his turnover. The company also benefits from resources from the other partners, which leads to the development of new skills. The use of partnerships allows the company to improve its competitive positioning, gain competitive position or gain market share. In this case, the company can seek strategic complementarities with one of its competitors. These complementarities can also relate to the resources or skills of the partner.
  17. 17. The path for multinationals to succeed in a cooperative agreement I-10 The acquisition and sharing of resources between the partners allows for the transfer of skills and knowledge and therefore a learning effect. The interaction between individuals leads to the production of new organizational. Partnerships allow companies to have more contacts and to ensure better learning. Thus, partnerships have real benefits not only in risk sharing and knowledge acquisition, but it is also a way to improve the performance of the partners. Regarding the BtoB relation, Multinational companies can set up also a productivity partnership. A "productivity partnership" aims to explore ways of improving the service or product offering based on feedback and best practices throughout the execution of the contract. This kind of partnership is really based on the relation between two companies.
  18. 18. The path for multinationals to succeed in a cooperative agreement I-11 3. How select the partner in order to enhance the relation The work on partnerships and the associated attempts at theorizing have always been confronted with a multiple way of thinking about partnerships and many authors have tried to respond more or less elaborate reading lines, or from more empirical approaches. Indeed, the theories mobilized to analyze inter-firm cooperation are very diverse (Combe, 1998). We have seen in previous part why partnerships are created and what are the motivations. Several authors as Blanchot (1999), Padoy and Puthod (1994) have done investigations on the relation between partners and how they select their partners. The most obvious reason is internationalization and entry into new markets. In this context, the environmental uncertainty and the degree of risk are high. Thus, a partnership with a local company will allow to reduce this uncertainty and to share this risk by giving the partner the necessary skills to adapt to this market. In this case, the local partner benefits from the offer of a new product that could complete an already existing range.  The legal form of the agreement: It is one of the main distinguishing criteria of the agreements and more than half of the classifications analyzed in this work refer to it explicitly. It is often the basis for the conventional categories used in everyday practice. There is two main classes to distinguish: agreements that are subject to a capital commitment and those that have no capital link. This logic leads to a distinction between the joint venture and the other forms of agreements thus; partnerships could be selected thanks to the legal form of the agreement.  The geographical origin of the partners. In a context of market globalization, the geographical origin of the partners is not without consequence on the strategic dimension of the cooperation. A first classification consists in distinguishing transnational agreements from national agreements, but the observation of three dominant economic zones has given rise to partitions within international agreements. We have seen that there is a strong link between firms from the three of the Triad (Japan, USA, EU), (Delapierre, 1991). Padoy and Puthod (1994) also introduce considerations
  19. 19. The path for multinationals to succeed in a cooperative agreement I-12 related to the environment of proximity. They distinguish between industrial and local partnerships, and the second between industrial and local partnerships. Geographically close partners take less risk by doing business. They reduce the transportation risk, reduce the shortage risk (we can deliver rapidly in industrial market for instance), reduce cost is not always true when you delocalize in poor country but it could be a real cost advantage, enhance de quality…  The sector of affiliation. The sector is rarely an explicit parameter of the analysis except in the case of studies of particular industries. Dussauge and Garrette (1992) have highlight this idea in their data analyses. In this case, we generally use the nomenclature of activities. We can see that generally company that are in the same sector or activities are joining to create partnerships.  The size of the partners. Dussauge and Garette (1992) have done an analysis about the partnership and the aspect of the size of the partners. Taking into account the size of the partners, most often based on the comparison of sales figures. We can highlight the fact that the size of the partners is a pertinent aspect for the creation of partnership and the relation between them. We have seen that some multinationals prefer create partnership with huge companies but others prefer create with smaller companies. It may involve power or dependency relationships between these two firms.  Duration. It is a characteristic feature of agreements (Dulbecco and Rochhia, 1996). The Most authors include this parameter in the definition of the notion of partnership or agreement, which they contrast with the ad hoc practices of purchase and sale. Thus, Baudry (1995) distinguishes subcontracting agreements (short-term, less than one year) from partnerships. In practice, however, this parameter is rarely used as an operational variable. Taking it into account (beyond the simple date on which the agreement was concluded) undoubtedly poses problems of access to information. The number of partners is not always discriminating when the majority of alliances are bilateral. (respectively 60 and 85%, for example, in the work of Dussauge and Garrette, 1992).
  20. 20. The path for multinationals to succeed in a cooperative agreement I-13 4. Traditional Approach comparing to partnerships Traditionally, multinational firms are using call for tender to select their suppliers. On purchasing approach, all the financial and technical requirements are define before the sourcing. The supplier is selected among with different competitors. Most of the time, the supplier selected provide the best price but nevertheless other criteria like quality, lead time, payment are well valued by multinationals. In the traditional approach, the price is a very concerning strategy and company’s purchase strategies are exclusively dedicated to low prices instead of other factors that can help the company to have competitive advantage. Authors have suggested that the use of traditional competitive approach should not be used when aspect other than price are significant (Dobler, Burt, and Lee). Others authors have suggested that the traditional competitive approach that lead to the supplier selection can have hidden cost and lead to a higher total cost in the long term. (C.K. Hahn, K.H. Kim, and J.S. Kim, “Costs of Competition: Implications for Purchasing Strategy”, 1986) The strategy based on price at the expense of quality and uncertainty about contract selection, can lead to a supplier complacency. The supplier will avoid all kind of investment in technology, R&D, and improving products. Long-term stability and trust is welcome for adequate success in business. Even though traditional approach may lead to low price products in short way of thinking. Nowadays, Traditional approach is an important strategy of the supplier selection process for certain types of products, especially in semi-conductors and commodity type of purchases. In opposition, the world actually is changing quickly. Multinationals companies have to be aware of the changing environment to adapt their strategy. The win-win situation has grown rapidly in an alternative to the traditional approach with a partnership or strategic alliance. This agreement requires a trusting between the two "partners." The partnership expects an information sharing and mutual dependency each other. These requirements are seeing in long- term vision, because it takes time to generate benefit from partnership. In contrast, the annual traditional contract negotiation is viewing as short-term relationship for a period of 1, 2 or 3 years. This contract can be non-renewal after the duration, with this idea we can see that the traditional approach does not fit in long-term strategy (J.P. Womack, 1990)
  21. 21. The path for multinationals to succeed in a cooperative agreement I-14 Figure 1. The main comparison between the traditional approach and the supplier partnerships by F. Ian Stuart. Traditional approach vs Supplier partnerships Price is the main criteria for selection Multiple criteria including management philosophy Short-term contract (1,2 or 3 years) Long-term agreement A lot of suppliers Few suppliers elected Improvement are made at time intervals Enhancement is continually seeking by R&D Problems are the supplier’s responsibility Problems have to be responded together Information is proprietary Information is shared To explain better the figure 1, the supplier selection decision in a partnership creation involves requirements to select potential partners. Visits to manufacturing plans, interviews for reach an agreement, management philosophy, commitment to quality and the R&D improvement are the main requirements that suppliers need to fit in order to be partner. Such an investigation like that require time and expensive, this is why multinationals take time and give an importance on partnership to make longer term commitments in order to save money in a long way of thinking. It is explained that supplier partnerships should be an integral part of a company’s quality improvement strategy. (C.K. Hahn, C.A. Watts, and K.Y.Kim, “The Supplier Development Program: A Conceptual Model, 1990”) The most important distinguishing characteristic between traditional approach and the supplier relationships should be the contract management process and the relation after the production. The keys to a victorious partnership are the sharing of information in transparency aspect in order to obtain the trust in the relation BtoB, the search for continuous improvement for R&D project it require commitment for both companies to reach, and mutualize when problem appear in order to solve with efficiency.
  22. 22. The path for multinationals to succeed in a cooperative agreement I-15 5. Success factors of partnerships Researchers have analyzed the potential factors that lead to successful partnerships. The authors distinguish between internal and external factors that enable the establishment of a partnership.  Internal factors : Internal factors can influence the performance and instability of the relationship. These factors relate to the partners, the functioning as well as the attributes of the partnership. These factors have a direct impact on the partnership, particularly when the partnership is being set up. o The factor regarding partners: Several empirical studies have tried to establish a link between experience and the performance of the collaborative relationship. This research postulates that firms develop specific partnership capabilities and skills in the management of joint ventures. According to Beamish (2004), there is a positive correlation between survival and the experience in joint ventures. (Brulhart, 2005) Asymmetry of partners: asymmetric partnerships involve firms with dissimilar strategic positions in terms of control of resources, financial capacities, etc. Internationally, these partnerships evolve in an 'unequal' geographical context in terms of macroeconomic development (Assens and Cherbib, 2010). To define asymmetrical cooperation agreements, the authors take into consideration several criteria: size, bargaining power, management control, learning capacity, etc. This imbalance very often leads to a relational misunderstanding between the partners. This is why a good information asymmetry is necessary to sustain the relationship. Number of partners: The number of partners is also considered a key factor in the performance of partnerships. It is recognized that multi-partner between several partners are efficient as opportunism and transaction costs are reduced. Some authors have pointed out the difficulty of managing these multi-stakeholder organizational forms (Gong, 2007). The more resources a partner has the more difficult it will be to ensure coordination between the allied firms, the more resources the partner has, the more difficult it will be to coordinate between the allied firms, and this will increase costs and lead to conflict.
  23. 23. The path for multinationals to succeed in a cooperative agreement I-16 Inter-firm rivalry: Garette and Dussauge (1995) have expressed the fact that partnerships can be a contradictory theory. Instead of confronting each other in a direct or indirect way, these firms find themselves involved in a cooperative relationship. The objectives of each may be different, which very often leads to misunderstandings and dysfunctions. Generally, this type of relationship results in the weakening of one partner and the strengthening of the other. However, this rivalry relationship does not necessarily lead to failure. In the case of complementary contributions from both partners, the partnership can be a success. Partnerships objective: this factor is directly liable to the partners. In this perspective, the partners' objectives need to be convergent and compatible to ensure the success of the cooperation. o Factors related to the operation of the partnership The trust: Trust plays a central and determining role in cooperative relationships. It helps to understand the interactions between the partners and to explain their performance. If the relationship between the partners is based on trust, this facilitates communication and thus allows for the development of close links between the actors in the cooperation. However, this bond of trust remains fragile because cooperation agreements are formed between several independent or even competing companies. In this case, the risk of opportunism is high and each partner seeks to protect itself from the other. Values: The two partners need to develop a clear decision making process. If the partnership is not clearly understand on the strategy and the goal they would like to reach it should an issue for the future. A synergy needs to be establish in order to be successful in the partnership. Commitment: this variable tends to reduce partner opportunism. Several studies have demonstrated the link between commitment and performance (Brouthers and Nakos, 2004). A high degree of commitment on the part of both partners can benefit the partnership. Partners would need to have a value-creating interest to ensure effective collaboration.
  24. 24. The path for multinationals to succeed in a cooperative agreement I-17  External factors External factors are focusing on the external environment of the partners and the characteristic of the business sector. o factors linked to the external environment: Cultural distance: cultural distance reflects the diversity between two national cultures. Many writers have investigated the impact of cultural differences in international cooperation. Most of them conclude that the diversity between firms creates difficulties in cooperation. These differences can be a source of problems related to communication with the partner. In addition, the risk of opportunism may increase in a new context. Indeed, acting in a setting outside their country, partners may act in an opportunistic manner because they are doing business abroad and the consequences of their conduct are not likely to be harmful to their own country. However, cultural distance can have a positive impact on cooperation agreements. Partners of different nationalities can achieve significant synergies, for example, it can stimulate innovation of both partners. Country risk: several studies assert that the stability of international cooperation agreements depends on variables specific to the host countries and in particular the emerging countries. About international joint ventures, Yann (1998) explains that for agreements in emerging countries, the economic and political uncertainty lead to a difficult management of the partnership. He also says that country risk can be the cause of non-performance of international joint ventures Local governments are seeking to regulations that promote development paths through foreign direct investment (FDI). Factors such as political stability and transparency of economic are all elements that would have an influence on the performance of partnerships established in these countries.
  25. 25. The path for multinationals to succeed in a cooperative agreement I-18 The dynamics of external factors can greatly assist in the success of partnership relationships. First, the phase of the industry's life cycle (start-up, growth, maturity, and decline) is strategic information that allows partners to predict the evolution of the sector and ensure its growth and profitability. Secondly, the structure of the industry may vary from one country to another, shaped by industrial concentration, consumer tastes and behaviors, market demand or the existence of barriers to entry. If a country is more open to trade and exchange between large companies, partnerships can only be effective. These factors justify the use of partnerships rather than any other mode of development (Blanchot, 2006). Some empirical studies confirm that partnerships are more stable and therefore more successful than fully owned subsidiaries, especially in the context of developing countries. Other authors assert that subsidiaries are the growth mode that ensures better performance for firms (Yiu and Makino, 2002)
  26. 26. The path for multinationals to succeed in a cooperative agreement I-19 B. Partnerships can be difficult to set up and seen as a failure 1. Cooperate in order to compete Partnerships can be difficult to set up nowadays because of the different strategies that multinationals have. Inter-firm partnerships are often presented as cooperative rather than competitive. However, alliances can also be interpreted as another form of competition rather than opposition. This is something that can scare some companies and change their strategies. Partnership is seen as a way of learning from one's partner. The alliance is not only a way to exist in a strategic arena that would be inaccessible if the company were to venture into it alone, but also an opportunity to acquire new skills through the learning of the new economic partner. Yves Doz & Balaji S. Chakravarthy (1992) have done some research about this subject. These authors highlight the fact that partnership can be seen to competition instead of the cooperation. There are three key parameters on the relation that the authors underline.  If the thirst to learn of one is significantly higher than that the other partner, it is very likely that the capacity to learn will be increased by this desire to capture the skills of the other. The flow of knowledge, expertise and interpersonal skills will mainly go in one direction only. This may be an idea that could call partnerships into question.  It represents the degree of formalization of the knowledge that can be transferred, i.e. that model the interface between the two organizations. The greater the degree of formalization of knowledge, the more accessible it is for the partners. If one firm does not want to transfer the knowledge, the partnership should not be successful.  The ability to learn from partners. In addition, to protect ourselves from our partners.
  27. 27. The path for multinationals to succeed in a cooperative agreement I-20 Strategic agreements can be seen as a new form of competitive confrontation. This leads to a review of the strategy or to train the teams in identifying the specific skills that interest the partners. The idea is to do regular debriefings and observe our partners in order to appropriate the knowledge and implement it within our organization. Vertical cooperation: Vertical cooperation, between the designer of the platform and the designer of the payload, can also take place between international firms, whether or not they are direct competitors. Beyond the industrial division of the activity, the cooperative dimension of the relationship also appears in the sharing of risks. All product, financial and technological risks are borne jointly and severally by the two cooperators. (Barney J.B, 1991) Horizontal cooperation: In this case, the two companies respond jointly to the call for tenders. The client receives a proposal that mentions both the dual governance of the project and the dual responsibility for risks. A real division of labor is set up between the two partners, going as far as the creation of joint work teams dedicated to the project.
  28. 28. The path for multinationals to succeed in a cooperative agreement I-21 2. Notion of performance Many authors have given lot of research regarding the failure of partnership and the difficulty to set up this kind of agreement. The notion of performance is always a key topic regarding partnership agreement. The performance is a topic that has attracted the interest of numerous researchers and leaders, but it remains a controversial concept. Many writers have been interested in explaining the conditions for establish partnership like the first part we have seen before. This is a crucial question given that the failure rate of cooperative agreements is high, ranging from 30 to 70 percent (Reuer, 2004). It is also recognized that partnerships, and particularly international ones, are unstable and risky systems because they are confronted with the uncertainty of the environment in addition to that of their partner (Brulhart, 2005). Franko (1971) was the first researcher to introduce the idea of performance in cooperative arrangements as a research stream. In his study, he focused on the case of international joint ventures. Subsequently, research on the subject has multiplied without reaching a consensus. Garette and Dussauge (1995) attest that it is difficult to speak of the success or failure of an alliance. The interruption of the alliance is not necessarily synonymous with failure. It may be that the partners have achieved their goals and do not need to continue the partnership. Conversely, an alliance may be maintained, not because of its performance, but because the partners do not know how to separate. In this case, they feel that maintaining the alliance is the riskiest choice. On the other hand, if the agreements made are stopped prematurely, for example, before the launch of a jointly produced product, this refers to the product; this is a sign of a failed partnership.
  29. 29. The path for multinationals to succeed in a cooperative agreement I-22 The various contributions in the international management literature point highlight two distinct conceptions of performance measurement of performance (Child, 2005): subjective measures and objective measures. Subjective measures refer to evaluations of the performance of the cooperative relationship based on the opinions expressed by the managers of the partner firms or by the managers of the joint entity. They include as variables the overall satisfaction of the partner’s satisfaction, the achievement of objectives and finally learning that the partner will have. Satisfaction refers to performance evaluations based on the assessment of the managers of the cooperation. In a way, the establishment of a cooperation is justified by the recognition of a useful skill or resource held by the future partner. It has been complementary alliances have been shown to enhance learning opportunities, since the resources brought in are different. However, in some joint ventures, the companies engage in a learning race in order to obtain the partner's skills as quickly as possible, in order to break off the relationship prematurely. Several studies have shown that the achievement of partners' strategic objectives is an effective and relevant measure of performance. However, it is important to note that partner's goals may diverge over time. Objective measures are related to survival and longevity and can be quantitative. Quantitative measures come from the accounting, financial stock market and strategic. These criteria are mainly based on ratios such as return on investment, and return on sales. Some authors study the evolution of the stock market valuation of partner companies following the announcement of the cooperation. Other indicators such as sales growth, R&D expenditure growth, capital utilization, are also taken into consideration. Table 2: Performance measures for partnerships according to Child, 2005. Type of measures Mesure of performance Objective Durability Outcome Financial figures, stock market, ROI, ROS, market share, profit rate...) Subjective Overall partner satisfaction Degree of achievement of objectives Learning
  30. 30. The path for multinationals to succeed in a cooperative agreement I-23 3. Partnerships seen as unstable and difficult to evaluate Strategic agreements are often described as unstable organizational forms that are prone to failure. Authors as Porter (1990) suggested that competitive and coordination costs make many traditional partnerships rather than stable arrangements and therefore, agreement are rarely a sustainable in order to obtain a competitive advantage. Several authors have found instability rates of close to 50 percent. Based on the finding that 24 of the 49 alliances they studied were considered failures by one or both partners, Bleeke and Ernst (1991) suggested that most alliances will terminate, even successful ones. To explain this kind of instability, factors have been highlighted: inflexibility in management of the alliance, breakdowns in trust, transparency between the partners, Lack of communication, continuity, and different partner expectations. The reality is that alliance performance is a complex notion; the measurement and the evaluation of a partnership could be a difficult task. Partnership and alliance are formed for a variety of purposes and often in highly uncertain settings, performance evaluation becomes a very difficult task (Anderson, 1990). The first belief argues that alliance performance should be evaluated as a mutual result and take into account the perspectives of the partners in general. The idea of doing together is really implemented in this case (Beamish, 1988). A different perspective suggests that to measure the performance of a common agreement, the partnership should be seen as individual partners and their created value. The idea explain that each partner will have different cooperative objectives and abilities to appropriate partnership benefits, For instance, one want to find a win-win situation in order to grow quicker. There is the notion of together we can go further. In opposition, other partner wants to use the partner’s competencies and appropriate the knowledge to grow quicker than the partner. The focus should be on the individual aspect and competitive gains of each partner (Hamel, 1991).
  31. 31. The path for multinationals to succeed in a cooperative agreement I-24 Because of the difficulty of measuring performance, an approach that is easier to implement and operationalize has been to focus on the stability of the alliance, based on the assumption that an unstable alliance cannot succeed. Beamish (1997) explained that instability in equity joint ventures should be linked with unplanned equity changes or major reorganizations. He defined instability as a major change in the status of the relationship, unplanned and premature from the perspective of one or both partners. In general, instability results in the premature termination of the alliance, either when one partner acquires the alliance business or when the business is dissolved. Using this definition of instability provides a clear link to alliance performance. Killing (1983) sees a change of control of the alliance and the ending of the venture as proof of instability. Other investigators have taken a narrower view. For instance, Kogut (1989) used closure as the only measure of instability. However, as Kogut explained, an alliance cannot be considered unstable simply because its life cycle is short. All business relations face challenges that threaten to change or terminate the basis of the cooperation. Sometimes, terminations are planned and anticipated by the parties involved. Companies may also be terminated as a matter of principle in the event of change of ownership or management of the parent corporation. One factor that complicates the examination of instability is that the end of the alliance will not necessarily be a joint agreement (Parkhe 1991). A factor that makes it difficult to examine instability is that the end of the alliance will not always be a mutual decision (Parkhe, 1991). A premature break-up may be precipitated by the actions of a partner. For example, when a firm tries to learn from its partner in order to reduce its dependency, the learning partner may have very different expectations. Yan (1998) have extended these arguments by interesting on instability perspective to identify destabilizing forces in joint ventures. Yan has suggested that alliance researchers should move beyond the hypothesis that stability leads to success while instability leads to failure. More recently, Das and Teng (2000) provided a comprehensive review of the literature on instability and developed a framework based on the internal tensions of cooperation versus competition, rigidity versus short-term versus long-term orientation.
  32. 32. The path for multinationals to succeed in a cooperative agreement I-25 4. Organizational difficulties and cost Establishment of partnership and alliance are often difficult and expensive to create especially regarding the organizational aspect. Moreover, the negotiation between start-ups companies are more complex and face to a high degree of uncertainty, and time-consuming. The difficulty to set up a partnership is difficult with start-ups due to the complexity of this kind of new company. Nevertheless, most partnership like joint ventures are complex to form because of tough negotiation process. There are several negotiation rounds; the first round took about four years, which was then followed by another long negotiation to revise the initial agreement. (Andrew Inkpen, 2001) After partnership negotiation appear, there are various costs, for instance accounting, consulting fees; travel expenses; financing and many others. In addition, the longer the negotiation take, the more expensive it is, because the company is paying their collaborators even though we did not reach an agreement. The global cost is increasing during the time especially due to the cost of human resource. In these partnerships creations, negotiations are seen more like investments for the future rather than incurred sunk costs. Thus, managers may think, “Even if the alliance has difficulties to be formed with the partner, we have invested so much time and energy in negotiating and forming the alliance, we have to try to make it function.” As a conclusion of that, we can say that the greater the resources allocated in the partnership agreement creation, the greater the probability of persistence will be.
  33. 33. The path for multinationals to succeed in a cooperative agreement I-26 5. Trust on Strategic Partnerships Although it is hard to quantify, the trust has become a key concept in alliances and is subject to multiple theoretical approaches. Partnership researchers (e.g. Das and Teng, 1998; Inkpen and Beamish, 1997) have repeatedly argued that the mutual trust is essential for a successful alliance. Without this, the partnership cannot function and be profitable. Ariño and de la Torre (1998), in their study of joint venture failure, found that without a reserve of trust, alliances that face threats to stability will not be sustainable. Yan (1998) argues that the lack of trust between partners at the formation of the international joint venture can be a major source of structural instability. As noted, trust is particularly fragile in international alliances because the risk and uncertainty involved in a domestic alliance is increased in the alliance context by transnational differences between the partner firms in culture, law, politics and trade policy. Inkpen (1998) examined the antecedents and consequences of trust in partnerships. He argued that partnerships trust should be seen as an evolving rather than a static concept. Over time, as partners and partner managers get to know each other and as the alliance becomes an operational entity, trust becomes an important element of the alliance. the level of trust between the partners will change. Trust requires familiarity and mutual understanding and is therefore time and context dependent. As the relationship matures, previous successes and failures, and interactions between partners will influence the level of trust in the alliance. Trust can also decrease over the life of the relationship. For example, when a partnership is formed, there is a subjective probability that a partner will cooperate. The Experience will lead to the adjustment of the probability, which in some cases may not be as high as it should be, of a partner cooperating. The level of trust will vary depend on the cooperation. Risk is a precondition for trust to exist, and the trustor must be aware of the potential risk that the partners can face.
  34. 34. The path for multinationals to succeed in a cooperative agreement I-27 The risk of negative results must be present for trust to function and the trustor must be prepared to be vulnerable. If there is no risk, trust is irrelevant because there is no vulnerability. The higher the risk, the higher the level of trust required to engage in a trusting action. The nature of risk and its interaction with trust has received limited attention in the research literature. Other point that we should highlight is the link between trust and the performance of the partnership. Yan and Gray (1994) has suggested that performance may have a feedback effect on the trust of the partnership. Poor performance can lead to suspicion between members, which in the long-term leads to poor performance of the alliance. If the alliance performs less well than expected, partners are likely to question the skills and capabilities of their partners. The level of trust in the relationship will be affected. In turn, performance can be affected by conflict between alliance leaders, where a decline in alliance performance leads to a decline in trust, which continues to amplify the performance problem.
  35. 35. The path for multinationals to succeed in a cooperative agreement I-28 6. Failure partnership What is Failure in partnership? At the beginning of a project, companies need to specify not only the potential for success, but also the potential for loss if the project fails. For example, many partnerships formed in China and other emerging markets like Brazil or India have unrealistic expectations of project success. Because of the perceived size of these markets, managers tend to overestimate the potential of the project and minimize the risk of failure. Andrew C. Inkpen and Jerry Ross (2001). Even though there are successful business partnerships, there are also partnerships that completely failed. For instance, Heinz and McDonald’s; Kraft and Starbucks; Apple Pay and PayPal; Lego and Shell. Regarding the case of Heinz and McDonald’s, it appears when the most popular fast food chain in the world and the very popular ketchup manufacturer have had a successful partnership for over 40 years. It is one of the greatest case of betrayal regarding business partnerships. In the case of McDonald's strategic partnership with Heinz, The ketchup company decided to go ahead with McDonald's famous rival, Burger King. After Burger King's former leader, Bernardo Hees, became the CEO of Heinz, McDonald has decided it was time to look for another ketchup supplier for its delicious fries.
  36. 36. The path for multinationals to succeed in a cooperative agreement I-29 Partnerships are fertile areas for dispute because everyone is a leader, or believes that they are. This is one of the reasons why many partnerships end up in failure. Partnerships are formed with the best of intentions. They fail for a variety of preventable reasons that new researchers have given analysis regarding the possible reasons why partnerships fail. (Carl Robinson, 2016)  They do not properly define their vision and the path in order to make money. As a result, people frequently join partnerships for financial reasons, but leave because of a gap between their values, career or life goals.  They do not develop effective decision-making processes. Partners are going in different direction and the common direction is not respected.  The financial structure is usually oriented towards rewarding those who look after themselves rather than the common good. Many partnership remuneration structures encourage the creation of work doing alone rather than teamwork.  Some partners end up holding the partnership hostage by threatening to take their clients elsewhere. As a result, other partners feel marginalized. These partners eventually get tired of being treated as second-class and leave.  Partners tend to be so customer-centered that they do not pay enough attention to feeding each other and non-associated staff. As a result, people do not develop a sense of camaraderie and loyalty to each other and the partnership. They leave as soon as they see a better opportunity elsewhere.  Partners do not necessarily want to find a win-win situation. They only think of their own profit. Or when one of the partners wants to leave the agreement.
  37. 37. The path for multinationals to succeed in a cooperative agreement II-30 II. Case study A. Company presentation - Turnover : 16,2 billion € in 2021 - Net profit : 1 361 billion € in 2021 - 81 000 employees - 70 countries worldwide a French electronics group specializing in aerospace, defense, security and ground transportation. Regarding partnership and agreement, The multinational Group is currently working with multinationals and with start-up. The partnership has a great place trough Group development‘s strategy. B. Focus on partnership with start-ups The company has a long history of collaborative work and partnership with the innovation eco- system - The company has a long history of collaboration with universities and institutes as well as with numerous SMEs. The open innovation strategy with start-ups, which dates back to 2014, is a logical part of this tradition of co-development to detect innovations in terms of technology and business models. - Since 2017, The company has been piloting the cyber security program at Station F in Paris, the world's largest start-up incubator. The incubator is now in its 5th class of start-ups supported for 6 months by Thales. Fifty percent of them are French, while the others come from Europe, the United States and Israel.
  38. 38. The path for multinationals to succeed in a cooperative agreement II-31 - The company is also piloting the Artificial Intelligence program within the Centech incubator in Montreal. What are the company's areas of interest with partnerships? Deeptech (materials, components, quantum technologies, energy storage); Smart sensors (RF, optronics, acoustics, biometrics, location technologies); Connected object networks (IoT); Reconfigurable and resilient networks; Cybersecurity; AI, Big Data and semantic analysis; Autonomy in the broadest sense. Why does the company work with startups? - Company’s objective is to accelerate our innovation and even boost it by drawing on the innovative capacity of start-ups and also on their agility. - Disruptive innovations and new forms of business models proposed by start-ups are also part of the objectives of our collaborations. - We work together to combine their expertise with our technologies and our in-depth knowledge of our clients' markets, so that we can make stronger offers that respond perfectly to market needs. How the firm succeed in partnership? The partners quickly obtain a first profitable contract; this contract gives them the opportunity to get an evaluation of their product by operational specialists Partners are sharing with them a clear roadmap with milestones: at each milestone, if they reach the defined objectives, their client signs a new contract with no revenue gap for them. In order to carry out this type of partnership, it is important to agree on the objectives of the joint project and to follow the same strategic line This success factor depends on the stakeholders and the compatibility of their objectives. The company emphasizes the importance of the partner's adaptation and understanding of the group's expectations and reciprocally. The success of cooperative relationships also depends on trust between partners. In order to develop close relationships between the actors and to promote communication between them, trust remains an important factor. Many employees said that without a clear
  39. 39. The path for multinationals to succeed in a cooperative agreement III-32 definition of the path they want to reach, without total transparency and communication the partnership will fail during the time or will not be effective enough. This study shows that at the company, in a new and uncertain environment, trust is a key factor in the smooth running of the partnership. The partners do not control, in this case, the elements related to the environment and must imperatively develop a climate of trust to ensure the stability and success of the partnership. In the framework of their partnership, the firm gives a crucial importance to trust and transparency that is why it is complicated to make a partnership with this multinational. It takes considerable time to choose the right partner to avoid wasting time and money. III. Methodology:
  40. 40. The path for multinationals to succeed in a cooperative agreement III-33 A. Introduction: This study focuses on the success of partnerships with multinationals and the steps they take to create a win-win situation. Through the literature review, we have seen how complex it is to set up a productive partnership. Internal and external factors make it difficult. This is why companies take their time to select the right partner in order to avoid important financial losses due to a bad selection. We have seen how this subject has interested many researchers because the financial, organizational and strategic stakes are considerable. It is indeed of our opinion to study this subject through a quantitative method, the researchers often had recourse to this approach to study the strategic dimension of the companies and in particular the installation of partnership. Thus, we will study some presuppositions of the qualitative research, which comes under the naturalist paradigm. We will then see the field and the research methods, then the structure of our interviews and finally the limits of the research and the questioning. B. Field of the research For this topic, an interest was taken in researchers who have dealt with this strategic business topic. As Gary, Inkpen, Ariño and de la Torre, Yan and more precisely Bruton in 1998 “Anatomy of a Failed High Technology Strategic Alliance”), a qualitative study was conducted for this research work. I wanted to bring a vision based on facts and precise subjects based on theories and testimonies. The goal was to obtain depth in the information in order to seek quality rather than quantity of information. To obtain data and confirm the theses we have seen, I interviewed professionals in the field of business strategy to get concrete answers on the subject. In order to get feedback from specific people, I made questionnaires beforehand and started to find the people who could answer in a good way through an interview. To find these people, I targeted partnership managers, purchasing managers, business development managers, alliance managers... .
  41. 41. The path for multinationals to succeed in a cooperative agreement III-34 In order to collect interesting data, an important selection was made to choose the experts who could most intelligently answer the questions. That is why I contacted via different platforms (Internal company networks, LinkedIn, personal acquaintances etc...) It took time to find these people because it was necessary to look for knowledge experts. These experts will answer my questions and to the research question with the vision of the expert with participating to the decision making. Once the answers were obtained, I compared, analyzed and synthesized them in order to obtain the best data related to our subject. In a second time, the idea was to put in relation the answers obtained with the theories of the researchers that we saw during the literature review. C. Research method The research method will be the qualitative method. Qualitative research is generally interpretive. The research is about thoughts, meaning or experience. It is not about testing theories, but about understanding a given phenomenon from interpretations, testimonies or opinions collected. In our case, the qualitative study is based on the collection of qualitative data obtained through the case study and the interviews conducted during the research. Among the exploratory studies, I have chosen the case study in addition to interviews as a research strategy, which is defined as "a spatial and temporal analysis of a phenomenon strategy, which is defined as "a spatial and temporal analysis of a phenomenon by conditions, events, actors and implications" (Wacheux, 1996). Several elements justify this choice: the research problem, the type of research question, and the means of controlling this subject. The use of a case study is useful when the research question is stated in the form of a "how" or a "why "to investigate a problem. Results are often expressed as factual, verifiable, and observable. In most cases, the results of qualitative studies are presented in the form of analysis and transcripts of interview responses. The different methods of qualitative research are as follows
  42. 42. The path for multinationals to succeed in a cooperative agreement III-35 - Interviews - Observation - Case study D. Structure of interviews POSITION EXPERIENCE SECTOR R1 Buyer +10 years IT R2 Alliance Manager +10 years Private Nursery R3 Purchasing Director +15 years Defense R4 Business development Manager +10 years Defense R5 Sales Engineer 5 years Electronic industry R6 Commodity Buyer +10 years Automotive R7 CEO 5 years Pastry For this dissertation, the interviews were conducted using the semi-structured method, which is a qualitative study method. Its purpose is to gather information that provides explanations or evidence for a research study. This method brings a richness and a great precision, and also allows to focus on the points that the person would like to highlight the semi-structured interview is different in that it allows individuals greater freedom to express their feelings, habits regarding a given subject and leave space for the conversation. For my part, it is natural expertise and keep the conversation on the track that I want and follow the path. The semi-structured interview can take several forms. The targeted semi-structured interview is a form that I decided to undertake for my seven interviews.
  43. 43. The path for multinationals to succeed in a cooperative agreement III-36 This type of interview focuses on a specific experience. The aim is to ask open-ended questions about a particular situation or phenomenon in order to understand the theme in a precise way.. The questions in the interview are focused on this fact.  Questions on a specific aspect of the business partnership topic we studied.  Ask short, direct and focused questions.  Focus on understanding the specific topic, without deviating to other facts on the same topic. In order to establish a logical link between the research thesis and the questionnaire I first wrote the literature review. This reflection allowed to obtain relevant results for the analysis. The questionnaire is composed of several open-ended questions related to the different hypotheses integrated in the thesis. The questions follow the guidelines of the literature review E. limit of the research I started looking for professionals to interview at the end of April. Indeed, to be able to interview them, my literature review had to be completed. I only had a few months left to do these interviews. A selection was made to take people who had an expert opinion so that the collection of information was the most interesting. That is why seven interviews have been realized. I think that if I had had more time, I could have interviewed more people but I was divided between the time I had and the selection of the experts that was important to me. For me it was not interesting to interview people who had no real knowledge on the subject. However, the results obtained supported our initial hypotheses. In addition, I believe that a longer time frame (especially due to the summer vacations) would have allowed for more interview responses to be obtained and thus strengthen the thesis. Despite this, the majority of the interviews took place between the beginning of May and the end of July. This allowed me to analyze in detail the data retrieved and to bring out several general ideas useful to my research work.
  44. 44. The path for multinationals to succeed in a cooperative agreement IV-37 IV. Results After several weeks of analysis, we were able to put together many data to put forward and affirm several existing works. The idea of representing the results was to express the ideas in a general way from the experts. To analyze the result, I decided to put the most important notion that we discussed in interview and explained the different way of thinking. Partnerships creation To begin with, without any debate, all the experts told me that it was better to set up partnerships than to do everything alone. Of course, these partnerships must be set up for good reasons and a good strategy but the idea of setting up partnerships is good according to the experts. Most of the reasons given by the experts are generally synonymous but they differ depending on the industry. I had the opportunity to talk with a buyer in the automotive sector, his company is setting up partnerships and joint ventures with many companies in order to identify opportunities to create and distribute value along its value chain. In this case, cost reduction is important but in this model, which is based more on performance, these partnerships allow for 100% control of the supply chain and thus reduce costs overall. If this company had not set up partnerships, it would not have controlled its entire value chain and then the costs would have been much higher. During my interview with the director of partnerships of the number 1 private daycare company in the world. I was able to analyze the fact that these partnerships are created only for profitability. Indeed, this company sets up partnerships of one or two years with large French and international groups, the goal being to offer places in day care for the employees of the suppliers of this group. Other people interviewed expressed the fact that the partnerships allow to sustain the supplier- buyer relationships. The implementation of partnerships also allows to develop its sales and to acquire new markets.
  45. 45. The path for multinationals to succeed in a cooperative agreement IV-38 Other companies enter into partnerships to compete with their competitors. These companies use partnerships to increase their skills in relation to their partner and in the medium to long term increase their turnover. Through this first question, we can see that despite the various opinions of the establishment of a partnership, the main purpose of a partnership is the search for a win-win solution. What are the different types of partnership that you are creating? In the context of the interviews, the types of partnership are very different from each other. Indeed, some companies chose partnerships in the sense of an alliance with a competitor. While others go for classical partnerships. For example, in the framework of private nursery multinational, the partnerships set up are outsourcing partnerships because the partner companies are not in competition with each other. A multinational company in the defense sector opts a lot for alliances, especially additional alliances. These alliances bring together competitors in order to develop technology faster and therefore provide better offers for the customer. I was told that the big groups in the automotive and electronic sectors are making a lot of alliances but also partnerships with start-ups. On a smaller scale, a global company in the field of pastry is setting up symbiotic partnerships with companies (weeding planner for example) in order to gain market share and to make themselves known
  46. 46. The path for multinationals to succeed in a cooperative agreement IV-39 The advantage and disadvantage of partnership? The advantages and disadvantages of setting up partnerships are quite different depending on the sector of activity. In the first place, most of the respondents answered that the main advantage was in terms of price and quality of the products, because by setting up a partnership with a supplier for example, the supplier can commit to lower prices and improve his quality. This allows companies to obtain important economies of scale. The second advantage is that it allows an acceleration of the growth of the companies and an increase in their turnover thanks to the partnership. Finally for the companies of defense and automobile it is partnerships allow to have access to new technologies and to be established on new markets that this company does not have currently. For companies that have a strong strategy based on research and development, these partnerships allow for a sharing of investment costs and therefore production costs, which allows companies to develop rapidly with lower costs. Finally, the last argument is that it allows a pooling of skills and expertise in order to develop more quickly and therefore improve relations between them. Concerning the disadvantages, the interviewees are unanimous in saying that joining forces with one or more companies, whether or not they are competitors, also presents risks. First of all, partnerships can be a source of disagreement and conflict because of the partners' different development visions. Some companies use partnerships to learn on the back of their partner. This is the case in the Defense and IT sectors in particular. In this case, the collaborative and beneficial aspect of strategic partnerships is totally broken.
  47. 47. The path for multinationals to succeed in a cooperative agreement IV-40 The success in partnerships? After analyzing the results, the answers are quite different from each other. Some experts answered directly with the question how to know if a partnership is successful or not? What are the criteria for success? In large organizations, the notion of partnership success is difficult to measure. Indeed, the success of partnerships is measured over very long periods of time. Whereas for smaller structures, the effectiveness of a partnership can be seen immediately through the reduction of prices, better quality etc. Concerning the success of these partnerships, all the experts indicated that a good relationship based on trust would allow the partnerships to succeed. Other experts indicated that the selection of partners was the most important thing for a successful partnership. Indeed, for some, the success is in the selection of these partners. If the selection is not managed properly then additional costs will be included and time will be lost. This was the case for our expert in a large electronics assembly company. A productivity partnership had been created with a company supplying electronic parts based in Taiwan. The expert admitted to me that the selection had been made relatively quickly. After 1 year, the negotiations were broken off for various reasons such as the lack of seriousness, prices not respected and low quality. All this has jeopardized the production of this group that assembles and produces in France.
  48. 48. The path for multinationals to succeed in a cooperative agreement IV-41 For the big group of private nursery, the partnerships are made on the short term that is to say one year or two years. It succeeds this partnership because this group gives an importance to the values that the partners transmit. It must be consistent with the development of the group to find this partnership situation. The expert calls it cross-selling, that is to say that they sell each other goods and services in order to propose a better offer to the customer. Therefore, for the partnership to be successful, the partners must be in the same frame of mind as the group. The expert of the defense group told me that the greatest success was in the creation of joint ventures even between competitors. Indeed, in the framework of these JVs, the competitive aspect is put aside in place of cooperation to allow the development of the sector of activity and more quickly.
  49. 49. The path for multinationals to succeed in a cooperative agreement V-42 V. Discussion and analysis In developing the literature review, I relied on a number of studies and research studies conducted by various authors. In this part, I would now like to balance and compare the results of our research with these studies. To accomplish this, we will divide this next to last chapter into three interrelated parts. I wanted to do this approach because to understand better we have to be specific on certain point that we should go deeper. Part 1: Traditional Approach comparing to partnerships, why creating a partnership. Part 2: Data protection. Part 3: A partnership failed. A. Traditional approach comparing to partnerships It should be interesting to discuss and analyze the approach that companies are more and more aware. Nowadays, more and more companies are using partnerships. Partnerships used to be reserved for large corporations, but through this study, I was able to see that many SMEs are using partnerships with multinationals as a strategy that is well established in the company. Although this study focused on multinationals, I think it is interesting to note that there is a radical and global change in the strategy of SMEs. Instead of simply marketing to companies, SMEs are now not hesitating to set up partnerships in order to obtain the benefits that come with it. All the people interviewed have a well-developed partnership policy. There is this desire to succeed in partnerships. The pastry company installed in a dozen countries also makes partnerships. Previously, the company did not try to find an agreement with suppliers and potential partners to develop its sales. Now it commits itself with suppliers on quantities, on quality so that it can benefit from better cost and quality.
  50. 50. The path for multinationals to succeed in a cooperative agreement V-43 As part of the distribution, it has established many partnerships with wedding planners and event organizers, the idea is to offer its services to future weddings or events and thus develop its reputation and sales. For the large defense, electronics and automotive groups, partnership strategies appeared in the 90's according to experts and are more based on the medium to long term, i.e. 5 to 10 years. B. Data protection The subject of the protection of companies has been studied only very briefly in this thesis. That is why it would be interesting to discuss it in this part. To succeed in partnerships, companies must protect themselves from potential attacks. A potential attack can make the partnership a complete failure. Through the research and interviews we conducted, we saw that not all companies have protection in place. Large organizations have a zero tolerance policy towards protection. Smaller companies are less fussy about data protection. The protection of the data of a company is characterized under several forms • Physical protection of data: o A solid protection and security to access the site of the company, o Securing the computer equipment with systems against data theft, • Protection against cyber-attack: o Comply with the laws and measures established by the DRSD for the protection of information defenses, o Be careful with the connection of USB keys and connections to unsecured Wi- Fi o Use powerful software to secure data. There are features to properly protect sensitive business data. It is essential to be proactive in order to secure computer data
  51. 51. The path for multinationals to succeed in a cooperative agreement V-44 C. A partnership failed Strategic agreements are not easy to execute. The experts I interviewed told me that to avoid failure; a partnership must involve a common goal or commitment that will benefit both parties. To ensure that partners start on the same page and stay there, there must be open and honest communication at the beginning and throughout the partnership. Too often, there is a gap in expectations or understanding, which reduces the benefits to both parties and ultimately stops the alliance. Defense and automotive industry experts have told me that when you are collaborating with another company, trust must be established and practiced at an appropriate level for collaboration and it must be balanced in that both companies share what is needed. If you have established clear guidelines for your partnership, these should include what information is needed to be shared and how it will be shared. From my point of view, I think this argument is very important and must be respected to avoid any failure. It allows companies to protect themselves from potential attacks from their partners. It is quite common in this kind of strategy to want to learn on the back of your partner. None of the experts told me explicitly that they are trying to steal knowledge from their partners, but some of them told me that this could be a more "secret" strategy and not to be disclosed in the partnerships because it could jeopardize the partnership and damage the reputation of the company. Overall, based on analysis and personal input, the most important elements of a strategic partnership are honesty and communication. Companies need to treat their partner, as a good friend who deserves your respect and investment and you will be on your way to a successful collaboration. The best partnerships are those where the respect and relationship is the most pronounced.
  52. 52. The path for multinationals to succeed in a cooperative agreement V-45 Conclusion The establishment of partnerships is a constantly evolving strategy that continues to attract companies, even start-ups. The multitude of actors, the resources put in place and the pressure generated by profitability and economic development forces multinationals to constantly question their working methods. Indeed, the constant arrival of new entrants and the extremely high competitiveness between multinationals affect the organizations as a whole. Considered as well integrated in the company's policy and strategy, partnerships allow companies to develop much faster than if they were individualistic. These strategies allow companies to reduce their costs, have access to resources, learn, innovate quickly by sharing costs, master their value chain and finally have a collaborative spirit even between competitors that would allow to find a win-win situation. Instead of competing with each other, companies collaborate with the aim of developing each other and thus offering a better expertise to the customer. However, these types of agreements are difficult to set up and are seen as unstable by some scientists. The path to successful partnerships is far from simple, but there are many benefits to be gained from success. In the context of this thesis, the problematic was how to set up a successful partnership with a multinational company. It is by carrying out each step of this thesis that we could see the different steps and factors that allow companies to succeed in partnerships.
  53. 53. The path for multinationals to succeed in a cooperative agreement V-46 Bibliography Brandenburger, A. M., & Nalebuff, B. J. (2011). Co-opetition. New York, NY: Crown Business. Das, T. K., & Teng, B. S. (2001). Trust, control, and risk in strategic alliances: An integrated framework. Organization Studies, 22(2), 230–280. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 150-202 Kiron, D., Kruschwitz, N., Haanaes, K., Reeves, M., Fuisz-Kehrbach, S. K., & Kell, G. (2015). Joining forces: Collaboration and leadership for sustainability. Mowery, D. C., Oxley, J. E., & Silverman, B. S. (1996). Strategic alliances and interfirm knowledge transfer. Strategic Management Journal. Varadarajan, P. R., & Cunningham, M. H. (1995). Strategic alliances: A synthesis of conceptual foundations. Arino. and Ring P.S. (2010), « The role of fairness in alliance formation », Strategic Management Journal, vol. 31. Beamish P.W. (1984), Joint Venture Performance in Developing Countries, PhD Dissertation, the University of West Ontario. Blanchot F. (2006), « Alliances et performances: un essai de synthèse ». Brulhart F. (2005), « Expérience du partenariat, expérience du partenaire, connivence interpersonnelle : quel impact sur la réussite du partenariat vertical ? CHILD J., FAULKNER D. and TALLMAN P. B. (2005), Cooperative Strategy: Managing Alliances Networks and Joint Ventures, Oxford University Press, Oxford. Gary L. (2004), « A Growing Reliance on Alliance »
  54. 54. The path for multinationals to succeed in a cooperative agreement V-47 Luo Y. (2007), « The independent and interactive roles of procedural, distributive, and interactional justice in strategic alliances », Yan A. (1998), « Structural stability and reconfiguration of international joint ventures » Robson M.J., Leonidou L.C. et Katskikeas C.S. (2002), « Factors Influencing Joint Venture Performance: Theoretical Perspectives, Assessment, and Future Directions » Inkpen, A. C., & Ross, J. (2001). Why do some strategic alliances persist beyond their useful life? California Management Review. Edwards, P. and Shaoul, J. (2003), "Partnerships: for better, for worse? “ Accounting, Auditing & Accountability Journal. Barney J.B., “Types of competition and the theory of strategy: Toward and Integrative Framework” Padoy, J.C. et D. Puthod (1994), "A la recherche d'outils d'analyse pour mieux comprendre les alliances de PME" Dyer J.H., “The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage” Hamel G., “Competition for competence and inter-partner learning within international strategic alliances” Lori Rosenkopf, Anca Metiu, Varghese P. George, (2001) From the Bottom Up? Technical Committee Activity and Alliance Formation Garry D. Bruton 1998 “Anatomy of a Failed High Technology Strategic Alliance” Mayrhofer “Les facteurs de réussites du marketing relationnel, 2003” Franko (1971) “Joint venture divorce in the multinational company”
  55. 55. The path for multinationals to succeed in a cooperative agreement V-48 Annex Annex 1: Interview with a purchasing director of a defense multinational (+20 years of experience) Explain your way of thinking regarding partnership and why creating partnerships instead of doing alone? Being very familiar with the term partnership, I have the opportunity to set up partnerships on a regular basis and to feed them throughout the year. I have been working in the purchasing department of this large international group for over 20 years. First of all, it allows us to put contracts in place and therefore to perpetuate our purchases, improve our relationship with suppliers and secure our value chain. It also allows us to analyze all our purchases and categorize them. Purchases made without partnerships are difficult to measure and therefore to analyze. We set up partnerships when we sign contracts with our customers. We commit ourselves to substantial contracts with a very important objective of means and results. This is why we create partnerships and joint ventures with the aim of satisfying the client as best as possible. Without partnerships, we would not have been able to achieve the level of excellence that characterizes us. What are the different types of partnership that you are creating? We make all types of partnerships and alliances within this structure. We can already discern the two types of purchasing that we do in our sector. Purchases outside of "non-partner" contracts and purchases under contract with which we set up productivity partnerships with our suppliers, which we call vertical partners. Within the framework of alliances, we set up JV's with competitors that allow us to join forces during development on R&D or complex projects. How do you select your vertical partners? Vertical partners can be subsidiaries of our suppliers who help us on projects, it can also be old suppliers who represent an important part of our expenditure, it can also represent entities of our group who produce products that we need. We call them verticalized because we set up specific partnerships and contracts with them. The selection is made at the management level according to the customer's expectations and the relationships we have with our partners. What are the advantage and disadvantage of your partnerships? As I said before, partnerships allow us to benefit from preferential rates on certain components, to have better deadlines, better quality, access to numerous resources and to conquer new markets, but this remains a general rule.
  56. 56. The path for multinationals to succeed in a cooperative agreement V-49 The main advantages on our side are the security of our purchases. There is a lot of pressure to deliver in our sector, so we are less concerned about price (although it is very important) but more concerned about controlling the whole supply chain. Control of the supply chain allows us to have control of our product from A to Z, to be efficient and reactive in case of a problem and this allows us to reduce costs considerably in the medium to long term. The global governance and complexity of our sector requires us to be excellent in our supply chain. I would also like to add that with inflation and shortage of components, the supply chain must be doubly controlled. We have seen that many companies have suffered, but those who have total control have been spared. As for the disadvantages, it takes a lot of time (several months or years) and negotiation to set up a partnership. This means that it is very expensive and that you must not make a mistake in your selection. Moreover, these partnerships make us dependent on certain structures. We should not put all these eggs in the same bag because first of all our negotiating power could be reduced and we will be extremely affected if there is a problem with our partner. What are the requirements that the company has to have before establishing a partnership? We do not have any particular requirements for our partnerships. Selections are made at the COMEX level and are often based on the relationship between the companies and the business history. To answer the question more explicitly, if a company joins our supplier panel it will not be possible to consider it as a vertical partner. This aspect is reserved for one company parcel. How do you protect your company from potential attack? We have very strict rules regarding data protection. As a large French defense group, we are subject to the strict laws of the DRSD concerning the protection of defense information. There is a very strong threat from national and international competitors who wish to appropriate commercial or technical data that is classified as sensitive. This has an impact both on our company and on the French state. Unfortunately, I won't be able to answer what we are doing to protect ourselves. However, many methods allow companies to keep their data safe. When partnership failed? In our framework, partnerships are difficult to define as failed. Either the partnership failed because one partner wanted to end it early for various reasons. This is the case of a joint venture in the United Arab Emirates that was dissolved because of multiple disputes. Or the end of the contract announces the end of the established partnership but we will probably conduct new partnership with this company but with another contract.

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