The document discusses different frameworks for understanding interorganizational relationships, including resource dependence theory, population ecology, collaborative networks, and institutionalism. It also covers how the nature of competition and management roles are changing in the current business environment of dense interconnected relationships between organizations.
The document discusses different frameworks for understanding interorganizational relationships, including resource dependence theory, population ecology, collaborative networks, and institutionalism. It also covers how the nature of competition and management roles are changing in the current business environment of dense interconnected relationships between organizations.
The document discusses different frameworks for understanding interorganizational relationships, including resource dependence theory, population ecology, collaborative networks, and institutionalism. It also covers how the nature of competition and management roles are changing in the current business environment of dense interconnected relationships between organizations.
The document discusses different frameworks for understanding interorganizational relationships, including resource dependence theory, population ecology, collaborative networks, and institutionalism. It also covers how the nature of competition and management roles are changing in the current business environment of dense interconnected relationships between organizations.
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Chapter Five
Interorganizational Relationships
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e
5-
Introduction Recent trends in organizing; increasing dense web of relationships among organizations. Dependence of companies on each other for supplies, materials and information. The issue at hand is how these relationships are managed.
2000 South-Western College Publishing Cincinnati, Ohio
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Changing nature of Competition
No company can go it alone under constant onslaught of international competition, changing technology, and new regulations. Companies now need to coevolve with others in the ecosystem so that everyone gets stronger. Current perspectives: resourcedependence, collaborative networks, population ecology, and institutionalism.
2000
South-Western College Publishing
Cincinnati, Ohio
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Definition of Terms Ecology - natural balance Institutionalism: a social theory that focuses on developing a sociological view of institutions, the way they interact and the effects of institutions on society
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Changing Role of Management
Within business ecosystems managers learn to move beyond traditional responsibilities of corporate strategy and designing hierarchical structures and control systems. In this new world, mangers thinkabout horizontal processes rather than vertical structures.
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Changing Role of Management
Rich environment of opportunities that grow from cooperative relationships with others. In this way, suppliers and customers become partners in business rather than adversaries.
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A Framework of Interorganizational Relationships* Organization Type Dissimilar Similar
Competitive
Resource Dependence
Population Ecology
Collaborative Network
Institutionalism
Organization Relationship Cooperative
*Thanks to Anand Narasimhan for suggesting
this framework.
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Resource Dependence Resource-dependency theory: organizations try to minimize their dependence on others for supply of important resources; thus pursue a path of independence and autonomy. Organizations do not want to become vulnerable to other organizations because of negative effects performance.
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Resource Strategies Reach out and control external sectors that threaten needed resources. Influence the domain by engaging in political activity, joining trade organizations,
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Changing Characteristics of Interorganizational Relationships Traditional Orientation: Adversarial Suspicion, competition, arms length Price, efficiency, own profits
New Orientation: Partnership Trust, addition of value to both sides, high commitment Equity, fair dealing, all profit
Limited information and feedback
Legal resolution of conflict
Electronic linkages to share key information,
problem feedback and discussion Mechanisms for close coordination, people on-site
Minimal involvement and up-front
investment Short-term contracts
Involvement in partners product design and
production Long-term contracts
Contract limiting the relationship
Business assistance beyond the contract
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e
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Elements in the Population
Ecology Model of Organizations Variation Large number of variations appear in the population of organizations
Selection
Retention
Some organizations find a niche and survive
A few organizations grow large and become institutionalized in the environment
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e
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Three Mechanisms for
Institutional Adaptation Mimetic
Coercive
Normative
Uncertainty
Dependence
Duty, obligation
Events:
Innovation visibility
Political law, rules, sanctions
Professionalism certification, accreditation
Social basis:
Culturally supported
Legal
Moral
Pollution controls, school regulations
Accounting standards, consultant training 5-12
Reasons to become similar:
Example:
Reengineering, benchmarking
Source: Adapted from W. Richard Scott,
Institutions and Organizations (Thousand Oaks, Calif.: Sage, 1995).
2000 South-Western College Publishing Cincinnati, Ohio Daft, Organization Theory and Design 7/e
