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Interorganisational

Relationships

PRESENTED BY: TWARA DESAI

ROLL NO: 23


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Interorganisational Relationships

Organisational Ecosystems

Resource Dependence

Collaborative Networks

Population Ecology

Institutionalism


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Interorganisational Relationships

Increasing dense web of relationships among organisations

Companies have always been dependent on other organizations

for suppliers, materials and information

How these relationships are managed is vitally important to the

organization affects:

- Structure- Management of the environment

Organizations can choose to build relationships in many ways,

such as appointing preferred suppliers, establishing agreements,

business partnering, joint ventures or mergers and acquisitions


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Organisational ecosystems

Organisational ecosystem is a system formed by the interaction of acommunity of organisations and their environment

A ecosystem cuts across traditional industry lines

A company can create its own ecosystem it can be a retailer, awholesaler, a logistics company and an information services company


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The Changing Role of Management

Managers think about horizontal processes rather than vertical structures.

The old way of managing relied almost exclusively on operations roles,

defending the organizations boundaries and maintaining direct control

over resources.

Today, collaborative roles are becoming more important for success.


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Changing Characteristics of Interorganizational

Relationships

Traditional Orientation:

Adversarial

New Orientation:Partnership

Suspicion, competition, arms length

Price, efficiency, own profits

Limited information and feedback

Legal resolution of conflict

Minimal involvement and up-frontinvestment, 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 partners product design

and production, shared resources

Long-term contracts

Business assistance beyond the contract


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Interorganizational framework

The models and perspectives for understanding interorganisationalrelationships help managers change their role from top-down

management to horizontal management. Relationships among

organizations can be characterized by whether the organizations

are similar or dissimilar, and whether the relationships are

competitive or cooperative.

By understanding these perspectives, managers can assess their

environment and adopt strategies to suit their needs


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A Framework of Interorganizational Relationships*

Resource

Dependence

Collaborative

Network Institutionalism

Population

Ecology

Organization Type

Organization

Relationship

Dissimilar Similar

Cooperative

Competitive


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Interorganisational Frameworks

Resource dependence rational ways organisations deal

with each other to reduce dependence on the environment

Collaborative networks where organisations allow

themselves to become dependent on other organisations toincrease value and productivity

Population ecology examines how new organisations fill

niches left open by established organisations and how a rich

variety of new organisational forms benefit society

Institutionalism explains why and how organisations

legitimate themselves in the larger environment and design

structures by borrowing ideas from each other


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Collaborative Networks

Collaborative-network theory Companies join together to become more competitive

Why collaboration?

Major reasons are

- sharing risks when entering new markets,

- mounting expensive new programs and reducing costs,- enhancing organizational profile in selected industries or

technologies.

Cooperation is a prerequisite for greater innovation, problem solving,and performance.

Partnerships are a major avenue for entering foreign markets.

Provide a safety net that encourages long-term investment and risktaking.


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Population ecology

Population ecology focuses on organisational diversity and adaptation

within a population of organisations

Population is a set of organisations engaged in similar activities with

similar patterns of resource utilisation and outcomes Organisations within a population compete for similar resources or similar

customers, such as insurance companies in the United Kingdom

Innovation and change in a population of organisations take place

throughout the birth of new forms and kinds of organisation more so than

by the reform and change of existing organisations New organisations meet the new needs of society more so than

established organisations that are slow to change


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Process of Ecological Change

The population ecology model assumes that new organisations are always

appearing in the population

The process of change in the population is defined by the principles that occurin stages: variation, selection and retention


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Process of Ecological Change

Variation

occurs when new organizational forms appear in the population oforganizations. Also, any single organization may try new variationsfor its own form.

- Axiom Global Inc.

Selection Refers to whether a new organizational form is suited to the

environment and can survive. Only a few variations will suit theenvironment and survive over the long term.

Retention

The preservation and institutionalization of selected organizationalforms. Certain technologies, products, and services are highly

valued by the environment.

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Elements in the Population-Ecology Model ofOrganizations

Variation

Large number

of variations

appear in the

population oforganisations

Selection

Some

organisations

find a niche

and survive

Retention

A few organisations

grow large and

become

institutionalised inthe environment


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Strategies ofSurvival

In population ecology, strategies distinguish organizational forms in the

struggle for survival

- Generalists

A company that offers a broad range of products or services orthat serves a broad market.

- Specialist

A company that provides a narrow range of goods or services orthat serves a narrower market.


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Institutionalism

Institutionalism perspective describes how organisations survive and

succeed through congruence between an organisation and the

expectations from its environment

Institutional environment is composed of norms and values from

stakeholders


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Institutionalism

Legitimacy is defined as the general perspective that an organisations

actions are desirable, proper and appropriate within the environments

systems of norms, values and beliefs

Institutional theory concerned with the set of intangible norms and

values that shape behaviour, as opposed to the tangible elements of

technology and structure. Organisations must fit within the cognitive and

emotional expectations of their audience

The institutional view also sees organisations as having two essentialdimensions technical and institutional. The technical dimension is the

day-to-day work technology and operating requirements. The institutional

structure is that part of the organisation most visible to the outside public


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Three Mechanisms for Institutional Adaptation


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Institutionalization:

Coercive ForcesExternal pressures exerted

upon organizations to adopt

structures, techniques, or

behaviors similar to other

organizations

Government, regulatory

agencies and/or powerful

firms


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Institutionalization:

Normative Forces

Pressures to achieve

professional standards

Preferred techniques

versus required

regulations (coercive)

Legitimacy seeking


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