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
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 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.
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.
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.
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
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