Evolution of Interorganizational Relationships in Organizational Ecosystems

1. 0 Chapter Five Interorganizational Relationships

2. Organizational Ecosystems 0 Interorganizational relationships – resource transactions, flows, and linkages that occur among two organizations Organizational ecosystems – a system formed by the interaction of a community of organizations and their environment

3. Is Competition Dead? 0 • Changing technology and new regulations present organizations with international competition • Organizations are involved in complex networks, the number of corporate alliances are increasing • Traditional competition no longer exists

4. Organizational Ecosystem 0

5. The Changing Role of Competition 0 • In ecosystems, managers move beyond traditional responsibilities • Managers must think about horizontal processes • The old role of management relied on operation roles and boundaries • This is a broad leadership challenge

6. A Framework for Interorganizational Relationships 0

7. Resource Dependence 0 • Locking in resources through long-term supplier relationships is a common resource-dependence theory • Supply chain management refers to managing the sequence of suppliers and purchasers • Large independent companies can have power over small suppliers

8. Supply Chain for a Retail Organization 0

9. Collaborative Networks 0 • Collaboration allow risks to be shared • Cooperation is a prerequisite for greater innovation • Interorganizational linkages provide a kind of safety net that encourages long-term investment and risk • Organizations are moving from adversaries to partners

10. Traditional Orientation Low dependence Suspicion Monitoring Price, efficacy, own profits Limited information and feedback Legal resolution of conflict Minimal involvement Short-term contracts Limited relationships New Orientation: Partnership High dependence Trust, addition of value Loose performance measures Equity, fair dealing Electronic linkages Mechanisms for coordination Involvement in partner’s production and design Long-term contracts Business assistance beyond contract Changing Characteristics of Interorganizational Relationships 0

11. Organizational Diversity and Adaption within a Population 0 • True transformation is a rare and unlikely event • In biology, evolution and selection are used to refer to behavioral processes • Evolution explains why certain life forms appear and survive • Organizations best fitted to the immediate environment

12. Population Ecology 0 • Organization Form and Niche • Form is an organization’s specific technology, structure, products, goals and personnel • Each organization attempts to find a niche • Process of Ecological Change • New organizations are always appearing in the population • Strategies for Survival • Competitive struggle for resources – struggle for existence

13. Elements in the Population-Ecology Model of Organizations 0

14. Institutionalism 0 • Institutional perspective: • Manage survival • Balance expectations of environment • Institutional Environment • Norms and values of stakeholders • Adopt structures and processes to please outsiders • Legitimacy - an organization’s actions are desirable, proper and appropriate

15. Technical Structure Day-to-day work Technology Operating requirements Governed by norms and rationality of efficiency Institutional Structure Visible to the public Governed by expectations of the public Institutional View and Organizational Design 0

16. Institutional Similarity 0 • Emergence of common structure and approach among like organizations • Mimetic Forces – the pressure to copy or model other organizations • Coercive Forces – pressures for organization to adopt structures, techniques or behaviors similar to other organizations. • Normative Forces – pressure to adopt standards and techniques of professional community

17. Design Essentials 0 • There has been an evolution in interorganizational relationships • Organizations operate within a ecosystem • Four perspectives have been developed to explain relationships among organizations • Collaboration is an emerging alternative to resource dependence • New organizations fill niches left open by established companies • The institutional perspective notes that interorganizational relationships are shaped by legitimacy as well as products/services