corporate partner
WINTER 2014
V O L . 5 5 N O. 2
Rewriting the Playbook for Corporate
Partnerships
By F. Asís Martínez-Jerez
Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published.
REPRINT NUMBER 55221
S T R AT E G I C P A R T N E R S H I P S
Rewriting the Playbook for
Corporate Partnerships
In fast-changing markets, some companies are developing more flexible, adaptive strategic partnerships to leverage the resources and capabilities of both customers and suppliers.
BY F. ASÍS MARTÍNEZ-JEREZ
TODAY’S BUSINESS ENVIRONMENT is unforgiving of companies that are slow to adapt.
To extend their capabilities and facilitate change, many organizations have experimented with different types of strategic partnerships with suppliers and customers that help them design and deliver products and services efficiently. But some innovative companies are attempting to redefine the parameters of strategic partnerships as we know them, navigating between the risk of being exploited by an opportunistic partner and the risk of being trapped in the rigidities of vertical integration. These organizations have initiated multileveled relationships with customers and suppliers that leverage the resources and capabilities of the respective parties in an effort to create superior products and services.
What makes such partnerships — which I call adaptive strategic partnerships — counterintuitive is that they are being formed in situations where the two most relevant streams of organizational economics would predict vertical integration.1 Moreover, managerial literature cautions against establishing customer-supplier agreements that, like those contemplated here, lack conditions of specifiability, verifiability and predictability.2
Bharti Airtel Ltd., a telecommunications services company based in New
Delhi, India, is among a growing group of companies that have
V O L . 5 5 N O. 2
Rewriting the Playbook for Corporate
Partnerships
By F. Asís Martínez-Jerez
Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published.
REPRINT NUMBER 55221
S T R AT E G I C P A R T N E R S H I P S
Rewriting the Playbook for
Corporate Partnerships
In fast-changing markets, some companies are developing more flexible, adaptive strategic partnerships to leverage the resources and capabilities of both customers and suppliers.
BY F. ASÍS MARTÍNEZ-JEREZ
TODAY’S BUSINESS ENVIRONMENT is unforgiving of companies that are slow to adapt.
To extend their capabilities and facilitate change, many organizations have experimented with different types of strategic partnerships with suppliers and customers that help them design and deliver products and services efficiently. But some innovative companies are attempting to redefine the parameters of strategic partnerships as we know them, navigating between the risk of being exploited by an opportunistic partner and the risk of being trapped in the rigidities of vertical integration. These organizations have initiated multileveled relationships with customers and suppliers that leverage the resources and capabilities of the respective parties in an effort to create superior products and services.
What makes such partnerships — which I call adaptive strategic partnerships — counterintuitive is that they are being formed in situations where the two most relevant streams of organizational economics would predict vertical integration.1 Moreover, managerial literature cautions against establishing customer-supplier agreements that, like those contemplated here, lack conditions of specifiability, verifiability and predictability.2
Bharti Airtel Ltd., a telecommunications services company based in New
Delhi, India, is among a growing group of companies that have
References: Press, 1995). (Boston: Harvard Business School Press, 2003), 137. Jersey: Princeton University Press, 2012). See also J. 5. O.E. Williamson, “The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting” (New York: Free Press, 1985). Incomplete Contracts,” working paper, Arizona State University, 2010. 8. S. Purohit, interview with author, July 21, 2010. by as Debacle Developed,” Wall Street Journal, Sept. 6, 2000. School Publishing, 2009). (Boston: Harvard Business School Publishing, 2008). 14 (winter 2008): 14-19. Copyright © Massachusetts Institute of Technology, 2014.