Textbook Notes (363,144)
Canada (158,220)
Business (2,364)
BU398 (130)

Ch5 - Interorganizational Relationships

2 Pages
Unlock Document

Wilfrid Laurier University
Joel Marcus

Chapter 5 Interorganizational Relationships Organizational Ecosystems Interorganizational relationships are the relatively enduring resource transactions, flows, and linkages that occur among two or more organizations. Organizations may be forced into interorganizational relationships depending on its needs and the instability and complexity of the environment. Organizations are evolving into business ecosystems. An organizational ecosystem is a system formed by the interaction of a community of organizations and their environment (e.g., Microsoft – consumer electronics, information, communications, and personal computers; ecosystem also extends to hundreds of suppliers and customers across many markets).  Is Competition Dead? – organizations need to co-evolve with each other to grow stronger; cooperation leads to success  The Changing Role of Management – managers must learn to move away from traditional order and uniformity and promote creativity and horizontal management  Interorganizational Framework Organization Type Dissimilar Similar Resource Dependence Population Ecology Competitive - describes rational ways organizations deal - examines how new organizations fill niches left open with each other to reduce dependence on by established organizations, and how a rich variety of Organization the environment new organizational forms benefits society Relationship Collaborative Network Institutionalism - organizations allow themselves to become - explains how and why organizations legitimate Cooperative dependent on other organizations to themselves in the larger environment and design increase value and productivity for both structures by borrowing ideas from each other Resource Dependence Resource dependence represents the traditional view of relationships among organizations; organizations try to minimize their dependence on other organizations for the supply of important resources and try to influence the environment to make resources available. Strive for autonomy and independence; if this is threatened, organizations will exert control over external resources to minimize that dependence. Amount of dependence is based on 2 factors: (1) The importance of the resource to the organization (2) How much discretion or monopoly power those who control a resource have over its allocation and use. Resource Strategies  Adapting to or alter the interdependent relationship  Use of interlocking directorships  Merger with trade association to coordinate needs, sign trade agreements, or merger with another firm  Political action (e.g. lobbying for new regulations)  Organizations operating under the resource-dependence philosophy will do whatever is needed to avoid excessive dependence on the environment to maintain control of resources and hence reduce uncertainty. Power Strategies  Large companies have power over small suppliers.  When one company has power over another, it can ask suppliers to absorb more costs, ship more efficiently, and provide more services than ever before, often without a price increase. Collaborative Networks The Collaborative network perspective is an emerging alternative to resource-dependence theory. Companies join together to become more competitive and to share scarce resources.  E.g. technology companies join together to produce next-generation products  E.g. large aerospace firms partner with one another and smaller companies and suppliers to design next-generation jets  E.g. large pharmaceutical companies join with small biotechnology firms to share resources and knowledge to spur innovation Why Collaboration?  Advantages: sharing risk when entering new/global markets, reducing costs, enhancing organizational profile o Partnerships are great avenues to enter global markets overseas  Companies can achieve higher levels of innovation and performance as they learn to shift to a partnership mindset  ***adding value to both sides*** From Adversaries to Partners Traditional Orientation: ADVERSARIAL New Orientation: PARTNERSHIP Low dependence High dependence Suspicion, competition, arm’s length Trust, addition of value to b
More Less

Related notes for BU398

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.