1. Interorganizational Relationships
Chapter 5
Interorganizational Relationships

2. Organizational Ecosystems
Interorganizational relationships – resource transactions, flows, and linkages that occur among two organizations
Organizational ecosystems – a system formed by the interaction of a community of organizations and their environment

3. Is Competition Dead?
Changing technology and new regulations present organizations with international competition
Organizations are involved in complex networks, the number of corporate alliances are increasing
Traditional competition no longer exists

4. Organizational Ecosystem

5. The Changing Role of Competition
In ecosystems, managers move beyond traditional responsibilities
Managers must think about horizontal processes
The old role of management relied on operation roles and boundaries
This is a broad leadership challenge

6. A Framework for Interorganizational Relationships

7. Resource Dependence
Locking in resources through long-term supplier relationships is a common resource-dependence theory
Supply chain management refers to managing the sequence of suppliers and purchasers
Large independent companies can have power over small suppliers

8. Supply Chain for a Retail Organization

9. Collaborative Networks
Collaboration allow risks to be shared
Cooperation is a prerequisite for greater innovation
Interorganizational linkages provide a kind of safety net that encourages long-term investment and risk
Organizations are moving from adversaries to partners

10. Changing Characteristics of Interorganizational Relationships
Traditional Orientation
Low dependence
Suspicion
Monitoring
Price, efficacy, own profits
Limited information and feedback
Legal resolution of conflict
Minimal involvement
Short-term contracts
Limited relationships
New Orientation: Partnership
High dependence
Trust, addition of value
Loose performance measures
Equity, fair dealing
Electronic linkages
Mechanisms for coordination
Involvement in partner’s production and design
Long-term contracts
Business assistance beyond contract

11. Organizational Diversity and Adaption within a Population
True transformation is a rare and unlikely event
In biology, evolution and selection are used to refer to behavioral processes
Evolution explains why certain life forms appear and survive
Organizations best fitted to the immediate environment

12. Population Ecology Organization Form and Niche
Organization Form and Niche
Form is an organization’s specific technology, structure, products, goals and personnel
Each organization attempts to find a niche
Process of Ecological Change
New organizations are always appearing in the population
Strategies for Survival
Competitive struggle for resources – struggle for existence

13. Elements in the Population-Ecology Model of Organizations

14. Institutionalism Institutional perspective: Institutional Environment
Institutional perspective:
Manage survival
Balance expectations of environment
Institutional Environment
Norms and values of stakeholders
Adopt structures and processes to please outsiders
Legitimacy - an organization’s actions are desirable, proper and appropriate

15. Institutional View and Organizational Design
Technical Structure
Day-to-day work
Technology
Operating requirements
Governed by norms
and rationality of efficiency
Institutional Structure
Visible to the public
Governed by expectations of the public

16. Institutional Similarity
Emergence of common structure and approach among like organizations
Mimetic Forces – the pressure to copy or model other organizations
Coercive Forces – pressures for organization to adopt structures, techniques or behaviors similar to other organizations.
Normative Forces – pressure to adopt standards and techniques of professional community

17. Design Essentials
There has been an evolution in interorganizational relationships
Organizations operate within a ecosystem
Four perspectives have been developed to explain relationships among organizations
Collaboration is an emerging alternative to resource dependence
New organizations fill niches left open by established companies
The institutional perspective notes that interorganizational relationships are shaped by legitimacy as well as products/services