Class 8 - Cooperation vrs. Competition

Why is it important for organizations to grow?

• To stay economically healthy

• Belief non growth is stagnant & customers dont have demands met/go to competititors

Competition causes people to act with (2)

• Suspicion, keeping competition at arm’s length

Competition can affect a business by…(7)

• Price of services/product

• Efficiency

• Own Profits

• Limited info & feedback

• Legal resolution of conflict

• Short term contracts can limit relationships

• Minimal involvement & up-front investment, separate resources

How is competition changing? (3)

• Changing technology

• New regulations

• International competition (Corporate alliances are increasing)

Cooperation among organizations includes (8)

• Trust - addition of value to both sides, high commitment

• Equity - fair dealing, both profit

• Electronic linkages to share key information, problem feedback & discussion

• Electronic linkages to share key information, problem feedback & discussion

• Mechanisms for close coordination, ppl on-site

• involvement in partner’s product design & production, shared resources

• long-term contracts

• business assistance beyond the contract

Why collaborative networks? (4)

• Share risks

• Innovation, problem solving, performance

• Entering global markets

• Safety net

How to change adversaries to Partners (2)

• Change in mind-set

• From independence to interdependence and trust

Whats an example of Memetic Isomorphism?

-Ex. When all tech stores take sleek look of Apple stores

-Ex. All dessert places use insta walls/pastels for insta likes

Population Ecology focuses on

Diversity & adaptation w/in a population of orgs (set of orgs engaged in similar patterns of resource utilization & outcome)

Organizational Form:

Tech, structure, products, goals, personnel

Organizational niche

domain of unique environmental resources and needs

Population Ecology consists of: (3)

Variation → Selection → Retention

Competition involves (4)

-suspicion, competition, arm’s length

-Limited info & feedback

-Legal resolution of conflict

-Min involvement & up-front investment, separate resources

Competition can affect (3)

-Price

-Efficiency

-Own Profit

Competition has short-term contracts that can

limit relationships

How/Why is competition changing?(4)

-Technology advancements

-New regulations

-International competition

-Corporate Alliances

Cooperation can lead to

-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

Cooperation can involve

-Long term contracts

-Business assistance beyond the contract

Why collab & build collaborative networks? (4)

• Share risks
• Innovation, problem solving, performance
• Entering global markets
• Safety net

How to create partners fr adversaries for Collaborative Networks:

• A change in mind-set
• From independence to interdependence and trust

Institutional Perspective is

organizations strive for legitimacy (the view that an organization’s actions are desirable, proper and appropriate) by trying to meet perceived expectations from the environment
(comprised of stakeholder norms and values)•

List the Rational, Events, Social Basis & an example for Mimetic

Rational: Uncertainty

Events: Innovation Visibility

Social Basis: Culturally Supported

Example: Benchmarking

List the Rational, Events, Social Basis & an example for Normative

Rational: Duty, Obligation

Events: Professionalism, Certification, accredition

Social Basis: Moral

Example: Accounting Standards

List the Rational, Events, Social Basis & an example for Coercive

Rational: Dependence

Events: Law, Regulation, Sanction

Social Basis: Legal

Example: Pollution Controls

Population Ecology for organizational form consists of

technology, structure, products, goals, personnel

Population Ecology for organizational niche consists of

Domain of unique environmental resources and needs

Inter-organizational Relationships

the relatively enduring resource transactions, flows, and linkages that occur among two or more organizations.

Organizational ecosystem

a system formed by the interaction of a community of organizations and their environment, usually cutting across traditional industry lines.

What is assumed in the traditional model of competition/

A distinct company is competing for survival & supremacy w other stand-alone businesses.

Why does traditional competition no longer exist?

Bc each org supports & depends on others to succeed/survive

• orgs must co-evolve

Cooperation definition

the simultaneous engagement in both cooperative and competitive behaviours between two or more actors.

Managers within biz ecosystems must

learn to move beyond traditional responsibilities of corporate strategy and designing hierarchical structures and control systems

• think about horizontal processes rather than vertical structures

please draw framework of interorg relationships

Ways that orgs can manoeuver resource dependance: (5)

•  adapt to or alter the interdependent relationship

  • Ex. purchasing ownership in suppliers, developing long-term contracts or joint ventures

•  use interlocking directorships

  • Ex. boards of directors include members of the boards of supplier companies

• join trade associations to coordinate their needs

• Sign trade agreements

• Merge to gain resources

Collaborative Network Definition

an emerging perspective whereby organizations allow themselves to become dependent on other organizations to increase value and productivity for all.

Compare & contrast “adversarial“ vrs. Partnership

Population Ecology Perspective

a perspective in which the focus is on organizational diversity and adaptation within a community or population or organizations

Population

a set of organizations engaged in similar activities with similar patterns of resource utilization and outcomes

Organizational Form definition

an organization’s specific technology, structure, products, goals, and personnel.

Niche definition

a domain of unique environmental resources and needs.

Variation in population ecology …

appearance of new organizational forms in response to the needs of the external environment; analogous to mutations in biology

Selection in population ecology …

the process by which organizational variations are determined to fit the external environment; variations that fail to fit the needs of the environment are “selected out” and fail

Retention in population ecology

the preservation and institutionalization of selected organizational forms

Struggle of Existence

a principle of the population ecology model that holds that organizations are engaged in a competitive struggle for resources and fighting to survive.

Generalists

an organization that offers a broad range of products or services and serves a broad market.

Specialists

an organization that has a narrow range of goods or services or serves a narrow market.

Institutional perspective vs. Institutional environment

Perspective - a view that holds that, under high uncertainty, organizations imitate others in the same institutional environment.

Enviornment -norms and values from stakeholders (customers, investors, boards, government, etc.) that organizations try to follow in order to please stakeholders

Legitimacy definition

the general perception that an organization’s actions are desirable, proper, and appropriate within the environment’s system of norms, values, and beliefs.

institutional view also sees organizations as having two essential dimensions…

• technical-the day-to-day work, technology, and operating requirements

• institutional-part of the organization most visible to the outside public

Institutional Similarity definition

the emergence of common structures, management approaches, and behaviours among organizations in the same field

Mimetic Forces definition

under conditions of uncertainty, the pressure to copy or model other organizations that appear to be successful in the environment

Coercive Forces definition

external pressures such as legal requirements exerted on an organization to adopt structures, techniques, or behaviours similar to other organizations

Normative Forces definition

pressures to adopt structures, techniques, or management processes because they are considered by the community to be up-to-date and effective

What are the key differences b/w small & large organizations

Large Organizations:

• Economies of scale, global reach, vertical hierarchy, mechanistic, complex, stable market, employee longevity, raises & promotions

Small Organizations:

• Responsive, flexible, regional reach, flat structure, organic, simple, niche-finding, entrepeneurs

How was apple meant to be a hybrid (small/large org)/ keep start-up culture?

1. focusing the company’s strategy on one cohesive vision,

2. encouraging debate and eliminating passive-aggressiveness about ideas, and

3. setting up cross-disciplinary reviews of how the company would succeed.

life cycle definition

a perspective on organizational growth and change that suggests that organizations are born, grow older, and eventually die

Explain Organization life Cycle

Describe the organization characteristics during all 4 stages of the life cycle:

List the 6 demensions of bureaucracy:

• Separate fr position holder

• technically qualified personnel

• hierarchy of authority

• specialization & division of labour

• rules & procedures

• written communications and records

What is bureaucracy?

an organizational framework marked by rules and procedures, specialization and division of labour, hierarchy of authority, technically qualified personnel, separation of position and person, and written communications and records.

Formalization definition

the degree to which an organization has rules, procedures, and written documentation

Centralization definition

the level of hierarchy with authority to make decisions.

What is the relation of personnel ratios & bureaucracy?

Personnel ratios is a CHARACTERISTIC of bureaucracy, that includes admin, clerical, & professional support staff

Police/fire depts use what? to respond rapidly to emergencies?

Incident command system -developed to maintain the efficiency and control benefits of bureaucracy yet prevent the problems of slow response to crises.

Reducing bureaucracy can also be done by…

• cutting layers of the hierarchy

• keeping headquarters staff small → giving lower-level workers greater freedom to make decisions rather than burdening them with excessive rules and regulations.

What are the 3 org control strategies & their requirements?

What are the types of authority ? (3)

1. Rational-legal authority

   • based on employees’ belief in the legality of rules and the right of those in authority to issue commands

2. Traditional authority

   • based in the belief in traditions and the legitimacy of the status of people exercising authority through those traditions.

3. Charismatic authority

   • based on devotion to the exemplary character or heroism of an individual and the order defined by them

Market control

 situation that occurs when price competition is used to evaluate the output and productivity of an organization.

Clan Control

use of social characteristics, such as culture, shared values, commitments, traditions, and beliefs, to control behaviour

• Organizations that use clan control require shared values and trust among employees

Define Organizational Decline

a condition in which a substantial, absolute decrease in an organization’s resource base occurs over a period of time

3 factors that contribute to organizational decline:

• Organizational atrophy

  • when organizations grow older and become inefficient and overly bureaucratized. The organization’s ability to adapt to its environment deteriorates

• Vulnerability

  • reflects an organization’s strategic inability to prosper in its environment

• Environmental decline or competition

  • refers to reduced energy and resources available to support an organization. When the environment has less capacity to support organizations, the organization has to either scale down operations or shift to another domain

Model of org decline