When not to ally
Investing too much of oneself in a business relationship is not as uncommon among Asian entrepreneurs as one might expect. Suresh Narasimha, the founder and chief executive officer of the Indian wireless and telecom software company TeliBrahma, warns that despite noble intentions, much value can be destroyed through such an imbalance.
Besides being sure of benefits and capabilities brought to the table by a partnership at different times, says Mr Narasimha, an entrepreneur must look into three things before he decides to form an alliance with another individual or organisation: potential for competition, integrity and trustworthiness of the ally, and the legality of the alliance.
If there is a possibility that the potential ally could become a competitor later on, it would be wisest to not form the partnership. For instance, a marketing or development partner with whom one allies as an entry strategy into a new market might gain enough knowledge or benefits to become a competitor in a year or two.
To prevent such self-inflicted damage, entrepreneurs must assess the likelihood of their becoming too useful to partners, and even rethink whether the planned market entry is suitable from a long-term perspective.
Beyond assessing potential alliances in terms of impact on future competition, the entrepreneur must also ensure that the allies to be have proven worthy of trust. Personal and professional networks can help here. Online sources such as linkedIn and OpenBC can also be of use, providing effective ways to cross-reference new individuals and organisations.
Especially when choosing foreign partners, entrepreneurs must be absolutely certain of the legal integrity of the potential partner. Be very careful that all the money flowing in and out of a potential ally is above-board, and that they are on the right side of all laws and regulations that apply to them. Any partnership that can damage your position and reputation as a responsible corporate citizen is definitely not worth the benefits.
While most relationships are built with the intention to sustain them over the long term, this may not turn out to be the case. Entrepreneurs who choose to engage in alliances should ensure proper documentation and strategy that will allow them to exit with minimal loss of value to their stakeholders.
http://www.nysetechnical.com/
http://www.offshorepro.info/
http://www.frmexam.com/
Article Submission made possible by: http://www.articles-submit.com
Courtesy of:The Powerful Financial Directory
Rating: Not yet rated
Comments
No comments posted yet.
Add Comment
You do not have permission to comment. If you log in, you may be able to comment.
