Application: International Alliances
Given the growth of international alliances, think of the increasingly important strategic role of HR. Specifically, by all accounts, the central issue in successfully implementing international alliances is choosing the right partner to begin with. With the right partner, implementation flows relatively smoothly and there is a high probability of success. With the wrong partner, the likelihood of success is remote.
If any department in a company should consider vetting of international partners a core competency, it is the HR department. Since HR professionals by training should be better attuned to issues involving cross-cultural dynamics, HR is well positioned to make a key contribution to the decision-making process of the CEO.
A proactive partnering role with HR is key to helping the CEO and other top executives make informed decisions about the risks, rewards, and costs of building versus buying. The article by Gupta and Wang, "Partnering Up the Right Way," (2011), notes four drivers of alliances between Chinese and non-Chinese companies: (1) complements, (2) government regulation, (3) risk pooling, and (4) industry-wide standards. They note that more than 50% of these alliances end in failure within 24 months. If you are in the HR department of a U.S. company about to enter into a partnership with a Chinese entity, consider your role in providing sound advice to the C-suite.
To complete this Assignment, respond to the following in a 3- to 4-page paper:
• Analyze factors that may drive cross-cultural business alliances.
o What role if any should the 5Cs play in considering a cross-cultural business partnership?
- Do any of them weigh more heavily on the decision to form the partnership? Why or why not? Explain your reasoning.
o In cross-cultural partnerships, how can HR advise the C-suite prior to an agreement?
• Bearing in mind the Gupta and Wang article and your own research, what specific advice would you, as an HR executive, give to the C-suite of a U.S. company considering a partnership with a Chinese firm?
• Evaluate the role of HR in partnering decisions.
o Should HR specifically recommend partnerships, or simply perform due diligence prior to an agreement?
o What specific types of information relative to potential partners should HR assess and share with the C-suite?