Available online at www.sciencedirect.com
ScienceDirect Procedia Economics and Finance 23 (2015) 434 – 438
2nd GLOBAL CONFERENCE on BUSINESS, ECONOMICS, MANAGEMENT and TOURISM, 30-31 October 2014, Prague, Czech Republic
Creation of Corporate Cooperation Strategy Viliam Lendel a, Jakub Soviar a*, Josef Vodáka a
Faculty of Management Science and Informatics, University of Zilina, Univerzitná 8215/1, 010 26 Žilina, Slovak Republic
Abstract Problematic of corporate cooperation strategy creation is still not fully examined area of practical cooperation management. Corporate managers often didn’t recognize modern approaches for cooperation strategy creation as well as its implementation in the corporate environment. Main goal of the paper is to present a model solution of cooperation strategy creation and its implementation in corporate praxis. This model solution is based on relevant literature review as well as on authors own research in the area. For research in the selected field we have use various methods: content analysis – document analysis, synthesis, comparative analysis, process analysis, statistical analysis, modeling, programming, methods of empirical research, etc. © 2015 2014 The The Authors. Authors.Published Publishedby byElsevier ElsevierB.V. B.V.This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Selection and/ peer-review under responsibility of Academic World Research and Education Center. Selection and/ peer-review under responsibility of Academic World Research and Education Center Keywords: cooperation; cooperation strategy ; cooperation management; creation; research
1. Introduction The process of implementation of cooperation strategy is influenced by a number of factors including theoretical concepts as well as practical applications. Probably the most significant challenge lies in the fact that there is no universal model available for implementation of cooperation strategy in a company. After conducting interviews with several companies as a part of the performed empirical research, we have identified a distinct need among the managers for a model that would support their efforts to build and implement cooperation strategy within their organizations. Such a model would represent benefit not only to the managers of the company but also to their partners.
* Jakub Soviar. Tel.: +421-41-513-4460 E-mail address:
[email protected]
2212-5671 © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
Selection and/ peer-review under responsibility of Academic World Research and Education Center doi:10.1016/S2212-5671(15)00384-6
Viliam Lendel et al. / Procedia Economics and Finance 23 (2015) 434 – 438
The main goal of this article is to gather and accumulate new insights in the area of cooperation strategy and to highlight possible ways of how it can be effectively established, built and implemented within a company. The proposed model is meant to be used by the company managers as a valuable tool for building and implementing cooperation strategy within a company. In order to address the points in question, as set by this article, it was necessary to use several methods, depending on and fitting to the character of the individual parts of the solution. In order to accumulate necessary data, we used the method of document analysis (for analysis of current as well as historical data about the topic), a questionnaire method and a method of semi-structured interview (gathering data in an empirical research) and a method of observation (used during visits of selected companies). The methods used for further data processing were induction, deduction, synthesis (in identification of key success factors for building cooperation strategy and in formulation of particular steps of the proposed model), abstraction and modelling. 2. The Current State of Dealing with the Issue Strategic management is used in the area of cooperation management mainly for formulating cooperation strategy which is preceded by a detailed analysis of current situation within the company. Process of establishing cooperation strategy according to Child et al. (2005) involves effort of the company to realize its goals using cooperation with other organizations. The concept of strategy in relation to cooperation was well grasped by Faulkner (1995). His definition highlights the essence of cooperation relationships. According to him, cooperation strategy represents a process of searching for reasons to establish cooperation, selection of suitable partners whose goals are compatible with the goals of the company, and a process of integration of partner cultures and systems. Phoocharoon et al. (2001) emphasize that the role of cooperation management is not to create a company strategy. Quite the contrary, it is about understanding that is needed in order to create a suitable cooperation strategy. Similarly, the company should suggest how this strategy should develop over time. It is important that the cooperation strategy is linked to and supports the company strategy. The latter stems from the mission and the purpose of the company. It helps company management to correctly direct the business and to prepare for unavoidable changes and risks of various character (Varmus, 2009). In the process of creating cooperation strategy, it is important to define the method of solving conflicts, to alight strategic goals of partners and to establish strategic cooperation connection based on integration of the used cooperation channels. He also considers cooperation strategy to be a method for improving performance of the involved parties, with the goal of achieving strategic competitiveness. In order for this to happen, it is needed to bring in strategic thinking, characterized by continuous analysis of the environment, readiness for change, integration, concentration of cooperation resources and continuous learning. Multiple methods of strategic management are used for performing the analysis of current situation within as well as outside of the company (e.g. in regional environment (Stofkova & Stofkova, 2011). 3. Situation in Slovak enterprises – results of the empirical research Between September 2012 and February 2013 we conducted a research, with the primary goal to gather and interpret information about the level of use of cooperations in the environment of Slovak enterprises. The main goal of the research was to identify the key aspects of efficient management and functioning of cooperations, related issues, degree of satisfaction of companies within cooperation and the opportunities for improvement of already functioning cooperations. In total, 273 managers of small, medium and large enterprises took part in the research, from companies active in Slovak republic. Table 1 provides overview of the main results for the individual researched areas.
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Viliam Lendel et al. / Procedia Economics and Finance 23 (2015) 434 – 438 Table 1. Level of use of cooperation management in Slovak enterprises. Researched area
Main results
Areas for improvement in cooperation
x x x
Main benefits resulting from cooperation
x x x x
Main issues arising when cooperating with other organizations
Area of the most developed cooperation
x x x x x
Improved communication (31.78 %) Adherence to contractual terms (23.08 %) Improved effectiveness of cooperation (22.14 %) Good mutual relations (26.62 %) Improved profit (20.78 %) Reduced costs (20.13 %) Insufficient adherence to the agreed contractual terms (58.39%) Financially demanding (35.04%) Distortion of information (34.41%) Supplier relationships (68.13%) Purchasing relationships (52.38%) Technical cooperation (44.32%)
4. Model for Creation of Corporate Cooperation Strategy Cooperation strategy defines the objectives and parameters of cooperative activities in company. Its main idea is creating value within cooperation. This suggests that company knows well its partners - what they want, and whether the company can benefit from this long-term cooperative relationship and which way. Creating a cooperation strategy focuses on the following key issues: x What is the current situation of the company and what wants the company achieve through its activities? x Who are target partners of the company and how should they be involved in its cooperative activities? Creation of cooperation strategy can be divided into three main parts (Soviar et al., 2013): x preparatory part, x analytical part, x application part. Preparatory and analytical part include analysis of the situation in the company. It is necessary to analyze and evaluate trends in cooperation and define the basic requirements for a building-up cooperative management model besides the analysis itself. All these activities must be preceded by acceptance and verification of conclusions from corporate strategy. Analytical part ends with formulation of a vision and objectives of cooperative management. The vision should include a certain ideal of employee behavior in relation to cooperation (partners), which should be realized through the use of cooperative management. Application part is focused on the integration of the company with its environment and also integration of internal processes in relation to cooperation. Company has to design a model of cooperative processes, describe its architecture and information links and ensure their optimization. It is important for the company to regularly review its cooperation strategy so that it would be up-to-date. Providing that the company finds out, that its strategy is no longer current and does not fulfill its function, a change of cooperation strategy, or a new cooperation strategy should be done. Reevaluation of cooperation strategy must be done every time, when corporate strategy changes. Cooperative strategy must support business goals in all circumstances, as well as the partners' objectives. The basic principle of cooperation strategy is to thoughtfully create and stabilize relationships with company’s partners – current or potential ones. There must be provided orientation to cooperation activities in company, so that cooperation strategy could fulfill its goals. The main focus of the company must be in collaborative activities. Identification of potential partners and their value to the company is another assumption to initiate creation of cooperative strategy. Defining the key aspects of the development of cooperation activities in the company and assigning their priorities is certainty. Company has to provide an effective gathering and usage of information about its cooperation activities. Created cooperative strategy has to take into account tasks, which are essential for building cooperative management in the company, and it has to be based on them. These tasks are following:
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x
transition to cooperation conception: requirements of the company and its partners, whom are cooperation activities sought for, are crucial, x changing the view of cooperation: providing transition from perception short-term goals to perception longterm effects. Cooperative relationship, which is based on close commitment to individual contracts, must be replaced with relational relationship aimed at building cooperation in the long-term perspective, x changing thinking of all concerned parties: each employee must be aware of the importance of cooperation for the company, hence prioritize the needs of cooperation in carrying out his own work tasks, x measuring reached levels of the process of building cooperative management in the company: managers are able detect possible deviation from the stated goal in time by help of feedback, x usage of modern information technologies: an appropriate information system supporting cooperative activities will enable to perform company’s cooperation processes more effective, and also achieve higher productivity and quality of provided services. Information technologies and software applications can markedly ensure the development and functioning of company’s partnerships. Management of the company will be able to develop a successful cooperative strategy only with the help of the project process management. The main rule of project management is to define objectives, content, timetable, financial budget at its beginning, and also identifying responsible persons (for the whole project, phases, ...), roles and establish a balanced system of evaluation metrics. 5. Discussion Use of cooperation strategy in a company is a complex process that requires thorough understanding of the company environment. Company managers should be aware that implementation of cooperation strategy also brings certain risks. Otherwise would this initiative be doomed to failure. In order to succeed in this area, it is a key to identify risk areas early and to take corresponding measures in order to increase probability of success of implementing cooperation strategy in a company (Vodak et al., 2014). Problems can arise in the process of defining cooperation goals that company aims to reach in relation to the planned cooperation. Frequently it is not clear in what way the cooperation will be implemented and the realization of which activities will be necessary. In such situation it is needed that the company understands the goals of its cooperation options and to reflect these into its strategic goals. Company managers should consider the following measures: x Correctly understand the principles of cooperation (good knowledge of the topic, achieved by studying of the literature and other processional education), x Clarify the situation where the company aims to get by using cooperation management, x Understand the expected outcomes of cooperation and the ways that can lead to their achievement, x Prepare common vision together with its partners. Poorly prepared cooperation program represents a frequent issue for implementing cooperation strategy in a company. Company managers tend to focus only on the technology side of cooperation and forget the other dimensions. Company needs to have at its disposal sufficient amount of information about cooperation processes, cooperation abilities and cooperation resources. In case the company does not dedicate necessary attention to this area and begins to implement cooperation strategy based on an insufficient documentation, it is highly probable that such implementation effort is doomed to fail. Company managers should consider the following measures: x Realize detailed analysis of current situation in a company, x Correctly understand the role played by technology in implementation of cooperation strategy, x Perform complex mapping of the potential for cooperation and specify the requirements placed on the cooperation, x Correctly set a system for evaluating cooperation performance of a company, including its rules. Another serious issue is missing necessary environment that would support establishing of cooperation – suitable culture. Managers of a company should consider focusing on establishing a company culture based on communication and collaboration. In addition to the already mentioned recommendations, implementation of which could improve quality of the cooperation environment, it is necessary to focus even further on employees of the company. Top management of the company should strive to stimulate employee activities by creating suitable
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environment that would ensure open communication, discussion about cooperation opportunities and work in teams. Managers need to transfer their engagement to their team members and they consequently bring the engagement into the development of new cooperation (Vodak et al., 2014). 6. Conclusion As main conclusions we can state following: Basic principle of cooperation strategy is analytical and detailed creation of relationships with partners. Cooperation strategy is closely connected with main corporate strategy, therefore it must follow corporate strategy main principles. Process of cooperation strategy creation consists of three main parts: preparation, analysis and implementation. For corporate managers in order to create cooperation strategy is necessary to perform a complex analysis of company´s cooperation potential, to create a common vision with partners and to define a cooperation orientation (state where the company wants to be in order to use cooperation management). Acknowledgements This paper was partially supported by the Slovak scientific grant VEGA 1/0621/14 Marketing management in cooperative environment – Proposal of strategic cooperation management implementation model. References Child, J., Faulkner, D., and Tallman, S. (2005). Cooperative Strategy. Managing Alliances, Networks, and Joint Ventures, Oxford University Press. Faulkner, D. O. (1995). International Strategic Alliances: Co-operating to Compete. Maidenhead: McGraw-Hill, 1995. Phoocharoon, P., Cuyvers, L., & Chomvilailuk, R. (2001). Cooperative Strategy to Strategic Competitiveness through International Joint Ventures between ASEAN and EU Companies, CAS Discussion paper No. 33. Centre for ASEAN Studies, Centre for International Management and Development Antwerp. Soviar, J., Lendel, V., Kocifaj, M., & Čavošová, E. (2013). Kooperačný manažment. Efektívne prístupy pre získanie konkurenčnej výhody, Žilina: EDIS – vydavateľstvo ŽU, 216 p., ISBN 978-80-554-0813-2. Stofkova, K., and Stofkova, J. (2011). Research of strategic management utilization for support of education activities and regions development. In EDULEARN11: 3rd international conference on education and new learning technologies: Barcelona (Spain) - 4th-6th July, pp. 5036-5040. ISBN 978-84-615-0441-1. - S. 5036-5040. Varmus, M. (2009). Comparison of Selected Concepts Strategies. In: Theory of Management - part 1, EDIS: University of Zilina, ISBN 978-80554-0147-8. Vodak, J., Soviar, J., Lendel, V. (2014). Identification of the main aspects of cooperation management and the problems arising from their misunderstanding. In: Communications - Scientific letters of the University of Zilina, 16(3), 93-101
