Chapter Five Interorganizational Relationships 1 A Framework of

Chapter Five Interorganizational Relationships 1

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. 2

Changing Characteristics of Interorganizational Relationships Traditional Orientation: Adversarial New Orientation: Partnership Suspicion, competition, arm’s length Trust, addition of value to both sides, high commitment Price, efficiency, own profits Equity, fair dealing, both profit Limited information and feedback Electronic linkages to share key information, problem feedback and discussion Legal resolution of conflict Mechanisms for close coordination, people on-site Minimal involvement and up-front investment, separate resources Involvement in partner’s product design and production, shared resources Short-term contracts Long-term contracts Contract limiting the relationship Business assistance beyond the contract 3

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 4

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 Reasons to become similar: Example: Reengineering, Pollution controls, benchmarking school regulations Source: Adapted from W. Richard Scott, Institutions and Organizations (Thousand Oaks, Calif. : Sage, 1995). Accounting standards, consultant training 5