Interorganizational Relationships

BUS 418 Exam 2

Interorganizational Relationships

* Interorganizational relationships- resource transactions, flows, and linkages that occur among two or more organizations

* Organization ecosystem- a system formed by the interaction of a community of organizations and their environment

* The changing role of competition

o In ecosystems, managers move beyond traditional responsibilities

o Managers must think about horizontal processes

o The old role of management relied on operation roles and boundaries

o COLLABORATIVE ROLES..

* Resource dependence relationship

o Locking in resources through long term supplier relationships is a common resource dependence theory

o Supply chain management refers to managing the sequence of suppliers and purchasers

o Large independent companies have power over small suppliers

o Establishing formal relationship- acquire an ownership stake, form joint ventures and partnerships, lock in key players, recruit executives, use advertising and public relations

o Influencing key sectors- change where you do business (your domain), use political activity, regulation, join in trade...

* Additional Techniques

o Supply chain management refers to managing the sequence of suppliers and purchasers

 Large independent companies have power over small suppliers

o Basic supply chain model= horizontal relationships

 suppliers-manufacturers-distributors-retail stores

* Collaborative Networks

o Emerging alternative to resource dependency

o Companies join together to become more competitive and to share scarce resources

o Alliances require managers who are good at building networks

o Companies can share risk and cooperation is a prerequisite for greater innovation, problem solving and performance

* Amex + Twitter Example

o How could the collaborative relationship between Amex AND Twitter influence both organization's structure?

o If you work for Facebook, what are some implications for you?

* Population ecology

o Organizational diversity and adaptation within a population of organizations

o Population is a set of organizations engaged in similar activities

o The theory notes that large, established organizations often become dinosaurs, have difficulty adapting, the changing environment determines survival or failure

o Heavy investments can limit organizational adaptation

o Model looks at organizational form

o Organizational niche can help aid in the survival of an organization

* Strategies for survival

o Organizations struggle for existence (competition)

o Generalist strategies- wide niche or domain broad range of products or services to a broad market

o Specialist strategies- narrow range of goods or services that serve a narrow market

* Institutionalism

o Perspective=

 manage survival

 balance expectations of environments

o Environment

 norms and values of stakeholders

 Adopt structures and processes to please outsiders

o Legitimacy- an organizations actions are desirable, proper, and appropriate

Design organizations for the international environment

* Motivations for global expansion

o Economic, technological, and competitive forces have combined to push companies from a domestic to a global focus

o Motivations for global expansion

 Economies of scale

 Economies of scope

 Low cost production factors

* Global expansion through international strategic alliance

o Licensing- allowing another firm to market your brands

o Joint ventures- separate entity of two or more firms

o Consortia- groups of independent companies

* Strategies for GLOBAL vs LOCAL opportunities

o Global standardization vs. local responsiveness

 Globalization or multi-domestic strategy

o Globalization strategy- products are standardized throughout the world

o Multi-domestic strategy- competition is handled in each country independently

* Global organization challenge

o Complexity and differentiation

o Need to coordination

o Transfer of knowledge and innovation

* Global coordination mechanisms

o Global teams

o Headquarters planning

o Expanded coordination rules

o

Using Information Technology for Decision Making and Control

* Information reporting systems

o Provides