In our globalised world, there are many partnerships that are formed between companies and organisations from different cultures. This comes with many benefits, but also some challenges. One of those is that of partnership.
Partnership is one of those words that can be very subjective. It can be interpreted very differently by people based on their experience and understanding of the world.
Let’s take the example of Company A in Country A, forming a partnership with Company B in Country B for a specific project.
There could be several understandings of the relationship.
For example, the partnership might mean an equally divided responsibility for the project. Both Company A and Company B contribute equal resource to the project, have equal authority to make decisions about the direction of the project and have equal responsibility if the project succeeds or fails.
An alternative might be that Company A provides the resources for the project, but Company B executes the project. Because Company A provides the resources, perhaps the decisions on the direction of the project are its responsibility. Or because Company B is actioning the project, maybe it has authority over the direction.
Or another partnership may involve Company A providing all the resources and direction, but Company B is held responsible if the project succeeds or fails.
Or Company A provides the direction, but Company B provides the resources and holds Company A responsible if the projects succeeds or fails.
Just from these few examples, you can see that the word “partnership” takes many different forms. All of the above types of partnerships have their own pros and cons.
BUT the highest level of confusion and frustration comes when the two companies have DIFFERENT understandings of the partnership for their project.
For example, imagine Company A thinks that it will provide the resources, therefore it has the authority to choose the direction of the project. But Company B thinks the partnership is where they make the decisions, because they are executing the actions. You can easily imagine that if the project fails, both companies will be blaming each other. And even before that, there would be a lot of confusion about who is in charge!
There are many other permutations and combinations of misunderstandings that could occur, simply over misunderstandings of what the partnership actually is. Hierarchical vs equality focused societies will have different perspectives on the word, and other factors such as socio-economics of each company can also influence the understanding of the relationship.
So when forming partnerships across borders, it is important to ensure there is a common frame of reference – to ensure both parties know what the definition of the partnership is. I guess this is why international lawyers get paid the big bucks for multi-national companies – but it’s important for smaller companies, not-for-profits etc, to also understand the implications of this in a global world.