 In this part of the session, we are going to look at the strategic alliances other than mergers and acquisition. There are different types of strategic alliances other than merger and acquisition. We are going to study few of them in this part of the session. The strategic alliances are the fast and flexible way to assess the complementary resources and skills that reside in other companies. So, these are now recognized as very important tools for achieving the sustainable competitive advantage. In order to acquire the resources, expertise and the market access, they many many organizations have started making the alliances with other or other business organizations which are different from MNA. There are a few examples. One example of the strategic alliance is in the form of giving franchisee or license. So, you must have seen McDonald's, Subways, Holiday Inn etcetera in different parts of the world. Some of you might have seen that in India and many of you must have seen in other countries as well. These organizations do not own all the facilities they run in different parts of the world. They actually work on the franchisee model. That means, they allow the other players to use their know-how and the brand and they ensure the quality is maintained. And in this way, lots and lots of independent organizations use this brand and know-how and operate in different market on the name of McDonald's, Subway or Holiday Inn. Many of you might have seen the or might have traveled with the Vistara Airlines. This is a good example of another form of strategic alliance which is called joint venture. So, joint venture is a one business venture being created by two or more number of business organizations. Vistara is a joint venture of Tata SIA Airlines Limited and Singapore Airlines. Another famous organization is Bharti AXA General Insurance Company. This company is also a joint venture a joint venture between Bharti Enterprises which owns the Airtel mobile services and insurance major from the France named AXA. So, these are the examples of the strategic alliances. Essentially, alliances are pursued through sharing, exchange or co-development of resources and the resource may include intellectual property, people, capital, technology, capabilities or physical assets or combination of any of these. Why we need to make strategic alliances? Strategic alliances are the fast and flexible way to access complementary resources and skills that resides in other companies and that is why they have become very important tool for achieving sustainable competitive advantage. So, one of the very good example of a strategic alliances is Tesla. Since its first public offering in 2010, the electric car manufacturer Tesla Incorporation has had some substantial success. So, one of the examples is that in 2019 the company boasted a market capitalization of around 76 billion dollars and this is an appreciation of more than 1500 percent over its initial public offering in 2010. Acknowledging the role of founding teams of the Tesla, they are very bright technocrats and amazing leaders. We also need to recognize the role played by Tesla's strategy of creating alliances with larger and more established companies. So, in 2010 and before Tesla had forged a strategic alliance with Demler AG, Toyota Motor Corporation and Panasonic Corporations etcetera. Demler partnership provided a much needed cash injection to this organization. Toyota partnership gave Tesla access to the world class automobile manufacturing facility located near its headquarter in Palo Alto in California and Panasonic Corporation. They are world leaders in the battery technology and the collaboration with Panasonic resulted in sharing of very valuable knowledge or battery technology with Tesla. So, these are the examples of how the strategic alliances have played so important role in the success of the Tesla cooperation. Any strategic alliance generally goes through the four stages. First is alliance strategy formation, second partner selection, third alliance structuring in a startup and fourth alliance operation and adjustment. Alliance strategy formulation involves identifying the collaboration logic, why strategic alliance and that the answer of this question is based on clear business strategy and business strategy simply means pathway to achieve long term objective, the distinct capabilities being owned by two different organizations or the partners who are entering into the strategic alliance. Economic drivers, how business is going to be affected, how the business model is going to operate and why an alliance better option than MNE or in house capability building. When these questions are answered thus formation of the strategic alliance leads to the next stage and that next stage is partner selection. For a strategic alliance for any organization there can be multiple options. They need to look at these options and identify how to leverage the similarities and differences in the capabilities of the prospective alliance partners. They also need to look at the compatibility of the management style, organization culture, their long term goals to create a competitive advantage. After partner selection comes the alliance structuring and startup. How the structure and design of the new entity will look like? So, first they need to identify the governance structure with the medium and long term contract. How the governance structure of the new entity will be? Equity decision is again a very important question to be resolved in the planning stage itself. Whether one partner will be a majority and another partner will be minority equity holder or both the partners or multiple partners will have equal equity decision are the very important points to be decided in the formation stage of the strategic alliance. It is because it is based on the structure of the equity, the decision making process, business decisions, strategy all these things are going to be affected in the future operations of this joint venture. That is why it is very important to be decided in the beginning itself. Ensuring the relational equality for the long term exchange. How the two partners will have equitable status in the joint venture? That also needs to be ensured in the planning stage. Building trust through interactions and expectation sharing is the way through which the alliance structuring and associated decisions are going to be decided. Once these things are decided, governance structure is formed, equity decisions are made and the terms and condition for the long term exchange and relational equality is established, alliances are forged and they start operating. In this stage, alliance have to keep diagnosing a state of itself and they need to make appropriate this adjustment. What is the role of OD in different stages of the strategic alliance? From the very first stage of the strategic formulation, OD can be useful. OD as a field and OD facilitator can help the two partners for the strategic planning which can help them to identify the collaboration logic. I have already explained what all the factors included in the collaboration logic. Secondly, the OD field and OD facilitator can help the potential partners to explore and understand their similarities and differences. Many a time, business leaders or the champions for the alliance are carried away by only the potential benefits, by only the competencies. They sometime overlook the potential pitfalls or potential drawbacks of each other. In this kind of situation, OD practitioners can help them to objectively reflect upon the similarity and differences of each other and identify the right course of action. In the alliance structuring and startup as well, OD can play a very important role. By facilitating the partners to develop the organization design, you might remember, we discussed about the criticality and the factors of organization design in the very first few lectures of this course. Another important component in the structuring process is Trist Building and Expectation Sharing. In the very beginning of the alliance formation, trust play a very important role and in the trust building communication plays a critical role. In this regard, OD practitioner and field of OD can be a very significant help to the potential partners. OD can also help in expectation sharing by the partners and reaching to the consensual point. In the alliance operation and adjustment, the full range of OD intervention which we have discussed at the individual level, team level and organization level. So, OD intervention at all the three levels can be implemented when alliance starts operating. No partnership can be free of any friction. There is always a scope of friction, miscommunication or even conflict when two or more partners operate in a marketplace. In that situation, OD can help in clarifying the issues, resolve the conflict and it can also be of a continuous help for clarifying the capabilities contributed, lessons learned, so that disagreements or the misunderstanding do not result in conflict. So, we can see that OD can play a very important role in strategic alliances at different stages of its formation and operation. When we know all this, then why is the success rate is so low of alliances? More than half of the alliances are not able to realize their full potential or the potential which is being thought through in the formation stage of the alliance and what can managers do about it. We need to look at why the strategic alliances fail and if we understand these reasons well, we can address these while operating on formation or operation of the alliances. First and foremost thing is incomplete information to identify the best matches. We know that human beings suffer from the selective perception bias. They wish to look at what they are excited about, they wish to look at what they are more interested and that affects the managers and the decision makers as this factor is not addressed properly, partners can go ahead with the severely or grossly incomplete information about each other. So, that becomes first reason for the failure of the strategic alliance. Next reason is spending not enough time in assessing the key factors that can drive relative value capture in an alliance's competitive pressure. There has to be a proper understanding about the value being brought by the two partners and how that is going to result in a competitive advantage in a competitive pressure in the marketplace. When these aspects are not sufficiently fleshed out, alliances face the risk of being failed. Companies give away too much at times especially when the one partner is very large and well-established company and later on they repent and later on they are not able to continue with that partnership. Failure to anticipate and resolve problems before they escalate and become severe conflict is another reason why strategic alliances fail and we have already discussed the field of OD can helpful can be helpful and addressing all these reasons from the formation and the operation stage of the alliance. So, given the factors such as globalization, technological change, business model innovations, executives frequently need to manage multiple alliances at once with partner in different geographies and at different stages of alliance lifecycle. So, we need to understand that forging alliances and managing them is a very important competency for the business leaders of the 21st century and field of OD can contribute significantly to realize this potential for the business leaders and for the organizations. Another type of the strategic alliance is network intervention. I would like to start with one example. While traveling through Air India, you must have heard about star alliance. The announcer in the aircraft mentioned that Air India is part of star alliance. So, a star what is a star alliance? A star alliance is example of the network about which we are going to study in this part of the session. Star alliance was established in 1997. It is a truly global airlines alliance to offer worldwide reach. Recognition and seamless service to the international traveler is being provided by this alliance. And this network offers more than 18,000 daily flights to more than 1300 airports in about 192 countries in the world. So, this network provides a seamless transfer while traveling across the world, more frequent flyer mileage points, code sharing leading to a wider choice of flights and access to the facilities at over 1000 lounges worldwide. Because of being part of the star alliance, people can book their destination in the interiors of any parts of the world with the same booking being done with Air India. So, this is an example of the network intervention. Star alliance has more than 35 airlines is of across the world, Air China, Turkish Airways and many, many more in the operating in all parts of the world. And because of they being part of this network, launch facilities and the flight booking facilities are available to the travelers who are booking with any of the partner of this network. Let us look at what are the features of the network. Network involves three or more companies joined together for a common purpose. Each organization in the network has goals related to the network as well as those focused on the self-interest. There are some informal type of networks and there are formal networks. Japanese Kiritsu like Mitsubishi, Mitsui, Toyota or Korean kibbles these are the culturally evolved networks. The Kiritsu evolved from the Zeratsu means the family based network in Japan and similarly the Korean kibbles have also evolved based on the network of the relatives or people of the same community operating in the different fields of business. So, the example of the formal network is the Federation of the Small Business in UK or Business Network International B&I in USA. What are the application stages of the trans-organizational development process? The trans-organizational development and network is an aspect of it goes through the four stages. The first stage is identification, second is convention, third organization and fourth is evaluation. In the identification stage network partners or the initiator of the network decides who should belong to the trans-organizational system. What are the relevant skills, knowledge, resources and key stakeholders of this network? When these questions are addressed with the sufficient details the next set of questions appear with the next stage and that is about should the TS or trans-organizational development trans-organizational network can be created. What are the cost and benefits for the individual members, for the customers and other stakeholders? Task perceptions also need to be identified in the convention stage. That simply means what are the probable roles and deliverables for the trans-organizational network? Once these things are decided network reaches to the fourth stage that is organization meaning how to organize the work, how to ensure the desired performance, how the communication will take place. What about the leadership? What will be the nature of leadership and the expectation from the leadership? What are the policies and procedures for network members to interact with each other and to interact with the external stakeholders and the internal and external customers? Once these questions are addressed operations can start. Once the operation starts there is a need for the constant evaluation. How the TS are performing? That needs to be constantly monitored. What are the performance outcomes? Sometimes one performance outcome have to be replaced with the time with another type of performance outcome. What are the quality of the interaction? What are the quality of the output? Whether members are satisfied or not? Whether stakeholders are satisfied or not? Is the work going in the right direction? Is being value created for the network member as well as for the externalistic holders? All these questions have to be considered in the evaluation phase and answers coming from the questions raised in the evaluation phase feedback to the identification, convention and organization aspect of the network as well. The same question we are going to look at what is the role of OD in the different stages of the network intervention. So, in the identification stage OD intervention and OD the field or OD facilitator work with initiating organization to clarify the goals like what will be the product? What will be the nature of the technology exchange? What are the things to be learned? How the market access will be ensured? That is to understand the tradeoff between the loss of the autonomy and the value of collaboration. In any network, individual organizations lose some autonomy and they gain something. They need to understand that value of that tradeoff and to make a conscious decision to enter and to be part of that network. Another important thing is mentoring the leaders and shared leadership for the sustenance and the growth of network. That is where field of OD and the OD practitioners can help. Mentoring of the leaders is important because there are different type of the leadership competencies required to run a organization and to run a network. To run a network, need a need to have a much broader perspective about the individual aspirations and the agenda of the different individual network partner and they need to have the special capability of creating a bond amongst the network partners so that their individual goals are satisfied, the network goals are satisfied and the stakeholder goals are also satisfied. In the conventional stage, OD practitioner can help in facilitating the potential partners to chalk out the mode of interaction. What is the best way of interacting with each other? What are the rules, procedures and the modes of interaction? Maintaining neutrality by the practitioners particularly by the leaders in a network is extremely important. Only with the leader who is seen as neutral earn the trust of the members of the network and OD practitioners, OD work can help the leaders to maintain the neutrality to become aware of their personal biases and can help them to deal with those. In the organizational stage, again OD can facilitate the members to define the competitive advantage for the network and the structural requirement to realize that advantage. In a simple term, at this stage, OD practitioners can help the organization to identify the competitive advantage and to create a right structure, an organization structure to realize that competitive advantage. And when the operations start, OD practitioner can assess how the network is performing and then they can suggest the necessary modification. In this way, OD can be helpful in all the different stages of the professional network. Networks are becoming increasingly realized as an important way of delivering service and product profitably and in a socially responsible manner. There are many examples of the networks like MV, Indian coffee house or training houses or the education franchisee. These all are the examples of network. Network are being used as a very powerful vehicle to scale up the operations and to reach out to the large number of customers very quickly. So, in the 21st century, with the advent of technology and globalization combined with changing business models, networks are becoming more and more important and OD can play a very important role in all the stages of the professional networks and network intervention. You may recall at this stage about what we discussed related to the systems thinking. Systems thinking is very much applicable in managing the networks. For example, the initiating conditions largely determine the behavior of the network. You might remember we discussed in the session related to the living system, we talked about how the initial system determine the course of action, even the small decisions, even the small decisions determine the future course of action of the network or of any living system. We talked about the emergent nature and equifianality in the reality. Living systems are not 100 percent predictable. They show the quality of emergence. They are not as predictable as the mechanical systems happen to be. For that we need to be ready about it and recognize the emergence as an important quality of any living system. Network of organization is a living system and you can very well assume the quality of emergence being reflected in the operations of that system. Equifianality meaning possibility of reaching to the similar business objectives or goals through different pathways. But different pathways may result in different output in terms of the experience of the members and that is the that is another characteristic of the living system. Living systems, organizations or other living systems can reach to the same end goal with the different pathways. But what are the implications of choosing a specific pathway must be understood and the impact of the impact of choice of the different pathways might be different for the individual members. Self-interest and whole system approach of the members may result in different outcome. That is why if a living system has to be successful substantial number of the members need to operate with this whole system approach. Simply put up they need to operate an act in a way that is good for the whole system and not only good for their individual benefit. So, that aspect of the living system is equally important in a network organization or trans organizational network. In a stability or the change in the way of interaction begins the change process. We studied the social construction of reality in the appreciating query class. We need to recognize that reality is socially constructed and any ability of the system to change depends on how the perception of the reality and the aspirations of the members are modified and changed. Role of the connector, Maven's and the sales people in a network have to be harnessed appropriately with a sticky message and power of context. What is the meaning of these terms? Connectors are the people in a network who connect different members. In a network you might notice that few people have more number of friends, few people are connected to more number of people they are the asset to the network. Then there are Maven's. Maven's are the expertise driven members of a network. They may not be aware of end to end process being followed by the network, but they love building their expertise in one specific aspect. Most of the time Maven's are happy to share their expertise and knowledge just in return of their recognition. Sales people are the people who are the influencer, who prepare people to take up stance, who prepare people to support some aspects of the objective or functioning of the network. All the three types of the people are required for and for a network to be successful, but that message which is given by these people have to have a have to be the sticky message meaning it should be interesting. It should stay in the minds of the partners of the network and that message must be drawn from the context. If that message is important, useful, but if it is not conveyed according to the context according to the background of the network, that message may not result in the expected change and development. So, these things which are the features of the living system are very relevant for operating and for developing trans-organizational network. I will conclude this session with one example of a trans-organization network in India. The name of this organization is SEVA, Self-Employed Women's Association. It was established in 1972 as trade union. Now, it is an organization of poor self-employed women workers and these are women who earn a living through their own labor or through their small business. This network has resulted in many activities. Few of them are listed here. First is the SEVA bank. SEVA bank is especially established for the members of the SEVA and they have developed the financial products which are suitable for the members of the SEVA. They are related to saving, they are related to investment, but they are customized according to the need of the SEVA members and who are the SEVA members. They are the self-employed women workers who are poor and who are earning living through their labor or with their small business. Then there is a SEVA network facilitation center. It was established in 2003 and it is a commercial arm of the SEVA. It is the organization where 1500 women artisans in the textile and handicraft sectors are involved. They this organization is used to acquire the output or the products of these women artisans and to and to sell that in the open market. There are many channel partners who are who constitute the STFC apart from the women artisans. These many of these channel partners are independent organizations. Women artisans are not the employees, they are operating in small groups or within their families and giving their output. So, there are different types of organization who are the partner of STFC and they are doing business to sell the products being produced by these poor women and to sell these products in the marketplace. Another organization of the SEVA is the Lok SEVA cooperative. This organization is a membership based organization of traditional midwives and the dais health workers. These are the health educators and pharmacists. It was established in 1990 and it is registered cooperative with 800 shareholders and all of whom are women. And what is the purpose of Lok SEVA cooperative? That cooperative provides life saving preventive health information and knowledge to the poorest of the poor women who are engaged in the self employment. So, you can look at SEVA as a network of the organization. It is the network of the independent workers of the small groups of the women workers who work in their families and they are engaged in the economic activities. As a spin-off, there are many organizations like SEVA Bank, STFC and Lok Swasti SEVA cooperative have emerged from this organization. So, in this session, we looked at what are the strategic alliances different from merger and acquisition. We studied about the joint ventures, franchisee and the trans-organizational network. We also looked at what are the stages through which our trans-organizational network or joint venture goes through and what OD practitioner and the field of OD can contribute to facilitate these entities to grow and to reach to the next level. Next is stage of the development and we ended this session with a example of SEVA that is good example of trans-organizational network in India. Thank you very much.