Thomson Learning © 20045-1 Chapter Five Interorganizational Relationships.
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Transcript of Thomson Learning © 20045-1 Chapter Five Interorganizational Relationships.
Thomson Learning© 2004 5-1
Chapter Five
Interorganizational Relationships
Thomson Learning© 2004 5-2
A Framework of Interorganizational
Relationships*
*Thanks to Anand Narasimhan for suggesting this framework.
ResourceDependence
CollaborativeNetwork
Institutionalism
PopulationEcology
Organization Type
OrganizationRelationship
Dissimilar Similar
Cooperative
Competitive
Dissimilar
Similar
Thomson Learning© 2004 5-3
Organization Strategies for Controlling the External
Environment Establishing
Interorganizational Linkages:
Ownership Contracts, joint
ventures Cooptation, interlocking
directorates Executive recruitment Advertising, public
relations
Controlling the Environmental Domain:
Change of domain Political activity,
regulation* Trade associations* Illegitimate activities*
* Cooperative / Similar Orgs
Thomson Learning© 2004 5-4
Changing Characteristics of Interorganizational Relationships
Traditional Orientation:Adversarial
New Orientation:Partnership
Suspicion, competition, arm’s length
Price, efficiency, own profits
Limited information and feedback
Legal resolution of conflict
Minimal involvement and up-front investment, separate resources
Short-term contracts
Contract limiting the relationship
Trust, addition of value to both sides, high commitment
Equity, fair dealing, both profit
Electronic linkages to share key information, problem feedback and discussion
Mechanisms for close coordination, people on-site Involvement in partner’s product design and production, shared resources
Long-term contracts
Business assistance beyond the contract
Thomson Learning© 2004 5-5
Collaborative Network: Dissimilar Organizations Value Chain
Networks Organizations +
Suppliers + Distributors
Trust = Social Capital
Embeddedness
Thomson Learning© 2004 5-6
Collaborative Networks:Similar Organizations Industry clusters or
Constellations Defend against forces
that drain industry profits
Factor networks: joint bargaining for inputs
Producer networks: consolidate & allocate capacity
Thomson Learning© 2004 5-7
Collaborative Networks:Similar Organizations Innovation networks:
upgrade products vs. substitutes
Scale Agglomeration: force entry scale higher
Mutual Forbearance: reduce rivalry by agreement
Social Action & Legitimation: polices actions and image http://www.fscus.org/
Thomson Learning© 2004 5-8
Elements in the Population Ecology Model of Organizations
Variation
Large numberof variationsappear in thepopulation oforganizations
Selection
Someorganizationsfind a nicheand survive
Retention
Survivingorganizationsprosper andbecomeinstitutionalizedin theenvironment
Thomson Learning© 2004 5-9
Thomson Learning© 2004 5-10
Niche Width Theory Hannan & Freeman
(1977, 1989) Specialist/Generalist Narrow, deep
resource exploitation vs. broad exploitation with some contingent capability
Do-nut shop or steak house vs. full menu restaurant
Thomson Learning© 2004 5-11
Niche Width Strategies Specialist
- single-unit - multiunit
Generalist - single-unit - multiunit
Polymorph - multiunit
Thomson Learning© 2004 5-12
Specialist Strategies Single-unit Seeks exact fit with
customer Deep exploitation of market Examples: Harold’s Auto
Service, O-Sho
Multiunit Honed efficiency of routines Scale economies Identical subunits Examples: AAMCO, Benihana
Thomson Learning© 2004 5-13
Generalist Strategies Single-unit Single approach to average
customer at center of market Broad exploitation with some
embedded contingent slack Examples: L.L.Bean, Joe’s
Eats Multiunit Center of market but efficient
delivery emphasized Scale economies Identical subunits Examples: Wal-Mart, Denny’s
Thomson Learning© 2004 5-14
What’s a Polymorph? Biological term:
single species with locally adapted sub-species
Example: birds of same species specialized to variations in available food along vertical gradients in habitat
Thomson Learning© 2004 5-15
What’s a Polymorph? Organizational term:
multiunit structure (chains, franchises) with locally adapted outlets or units
Example: Best Western hotel chain - smaller units stress local character
Thomson Learning© 2004 5-16
Three Mechanisms for Institutional Adaptation
Example: Accounting standards, consultant training
Pollution controls, school
regulations
Reengineering, benchmarking
MoralLegalCulturally
supportSocialbasis:
Professionalism—certification, accreditation
Political law,rules, sanctions
InnovationvisibilityEvents:
Duty,obligation
DependenceUncertaintyReasons tobecome similar:
NormativeCoerciveMimetic
Source: Adapted from W. Richard Scott,Institutions and Organizations (Thousand Oaks,Calif.: Sage, 1995).
Thomson Learning© 2004 5-17
Institutionalization: Mimetic Forces The imitation of
organizational structures, techniques or behaviors from other organizations
This modeling is done without any clear proof that performance will be improved
Generally takes place under conditions of high uncertainty
Thomson Learning© 2004 5-18
Institutionalization: Coercive Forces External pressures
exerted upon organizations to adopt structures, techniques, or behaviors similar to other organizations
Government, regulatory agencies and/or powerful firms
Thomson Learning© 2004 5-19
Institutionalization: Normative Forces Pressures to
achieve professional standards
Preferred techniques versus required regulations (coercive)
Legitimacy seeking