Trust in Alliance Building

Business entities at some point require developing new strategic ways that will enhance market expansion. Strategic business partnerships offer such opportunities for enterprises to increase brand awareness and capital without having to undergo huge financial costs (Bidault & Castello, 2010). The Human Resource (HR) position is a strategic business partner in it-self and focuses on ways that we affect each other as a base for the value we add to organizations. The HR can achieve this role by supporting the strategic business goals such as partnerships through key performance indicators (KPIs). These are specific and quantifiable organizational performance measures in key areas of its business. This function of the HR assists in aligning the goals of the HR with organization and therefore, promote growth, quality and speed, information based strategies, and organizational performance (Bidault & Castello, 2010). In partnerships the HR would be instrumental in building trust with prospective alliance partners by providing the appropriate knowledge and expertise on knowledge sharing, information sharing, enhanced human capital mechanisms and provisions in the process of developing the partnership (Bidault & Castello, 2010).

According to Malhotra and Lumineau (2011), business partnerships have great potentials for organizations to achieve value and develop competitive advantage. Organizations coming into partnerships require coming up with clear and precise contracts which enables them to mitigate risks, promote cooperation, and facilitate coordination. Malhotra and Lumineau (2011), note that to address areas of mistrust and increase trust the HR should focus on increasing the level of goodwill-based trust and competence-based trust. Recent studies have shown a mutually reinforcing relationship between goodwill-based trust, competence-based trust, and relationship development. The HR can also apply outsourcing for services that pose a threat to trust among the partners. This would ensure that there are no future conflicts emanating from the issue. The HR executive as the head of the human resource department has the mandate to act the mediator to bring about solutions and restore the damaged trust between the two partners. The HR as a strategic business partner is in a position to reconcile the failing entity within the business by focusing on ways that they affect each other.

The role of the HR executive in advising a CEO who seems determined to partner with a company that is potentially untrustworthy would be to ensure that there are proper contracts for the partnership (Malhotra & Lumineau, 2011). Partnership relationships are normally not that simple or automatic, rather they require properly laid out execution plans and agreements. When forming business partnerships the first question that people need to ask themselves is “how do we want this to end?” This lays a strong foundation based on mutual knowledge of whether the business is to last for a reason, a season, or a lifetime. Failure to come out clearly right from the start could result into a disaster. Knowing a clear guidance on how the business is to end gives both parties an overview of whether they can pass it along or share along with a family member or a friend. These can be provided for in a form of a prenuptial agreement for the given partnership clearly outlining in a written form on how the business is going to grow, expand, and end. It also indicates whether there are provisions for future partnerships. Partnerships are prone to the threat of dire exploitation by an opportunistic partner (Malhotra & Lumineau, 2011).

References

Bidault, F & Castello, A. (2010) Why Too Much Trust Is Death to Innovation. MITSloan Management Review, vol 51, 4

Malhotra and Lumineau (2011), Trust and Collaboration in the Aftermath of Conflict: The Effects of Contract Structure. Academy of Management Journal . vol 54, No 5, 981-998