Building Value Chain Capabilities

by Wendell Jones

As more companies try to improve value chain capabilities by developing cooperative relationships, they're finding that success in strengthening the value chain depends on three interrelated managerial decisions and actions. The first factor is motivating managers and employees alike to commit to and to support the organizational change process, while simultaneously creating a supportive organizational culture. The second issue is deciding what noncritical functions should be candidates for the cooperative relationship. And the third important managerial decision is determining whether the relationship should be an alliance, a partnership, or an outsourcing arrangement. The role of senior management in making these key decisions and then taking the appropriate steps to develop a successful cooperative relationship is the focus of this Executive Report.