Collaborative partnerships are very common these days and have expanded enormously in number over the past few decades. Selecting the best option can be somewhat difficult and different types of collaboration can require certain trade-offs. Choosing a Partner: Potential partners need to evaluate a few foundational topics before they decide to join hands. First and foremost it is important to find a business partner who has a similar vision, as well as goals and objectives. Mutual trust between partners is also a necessary foundation to any business relationship, as is recognizing each otherâ€™s strengths and weaknesses. Finally, agreeing on a level of commitment is necessary such as, financial support and daily management. Collaboration Mode: Tradeoffs between different modes of development include speed, cost, control, potential for leveraging existing competencies, potential for developing new competencies and potential for accessing other firmsâ€™ competencies. Licensing and outsourcing conversations also need to take place. Governance Structure: Governance structure and organizational principles are very important things to consider when two firms decide to collaborate. The three main types of government mechanisms are alliance contracts, equity ownership, and relational governance. The best fit of a governance structure depends greatly upon the individual type of partnership and collaborative goals. The role of governance is to enforce members agreed upon obligations.
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