Lecture 10 - Interorganizational Relationships (1)

Lecture Overview

Purpose of Studying IORS:
- Understand theories explaining relationships among organizations.
- Explore why organizations form relationships (necessity vs. choice).
- Analyze external environmental forces affecting strategies for survival.
- Discuss managerial decisions and consequences related to IORS.

Interorganizational Relationship:
- Ongoing resource transactions and connections between two or more organizations.
Organizational Ecosystems:
- A community of organizations interacting with their environment.

Organization Types:
- Dissimilar & Similar Relationships
- Resource Population Ecology
Types of Relationships:
- Competitive Dependence
- Collaborative Networks
- Institutionalism

Competition:
- Characterized by suspicion, short-term focus, legal conflict resolution.
- Limited information sharing and resource separation.
- Use of short-term contracts and minimal upfront investment.
Cooperation:
- Trust and value addition, high commitment and equity.
- Long-term contracts and involvement in partner operations.
- Mechanisms for close coordination and sharing resources.

Organizations aim to minimize their dependencies through:
- Interdependent relationships such as joint ventures and shared ownership.
- Understanding power dynamics in organizational relationships.

Organizations unite to share scarce resources and achieve common goals.
Example: Cooperative linkages within sustainable communities (e.g., Waterloo Region).

Key Factors Influencing Trust:
- Competence: Ability to help based on knowledge and skills.
- Benevolence: Desire to do good, marked by support and openness.
- Integrity: Consistency in morals and fair treatment.

Focuses on diversity and adaptation of organizations based on:
- Organizational forms, technology, structure, products, and goals.
- Processes of variation, selection, and retention within populations.

Organizational Niche:
- Generalist: Serves wide markets and offers diverse products.
- Specialist: Targets narrow markets with focused offerings.

Success is defined by alignment with environmental norms and values.
Isomorphism: Pressure for organizations to align to similar standards (e.g., regulations, certifications).

Necessity: Relationships formed to meet legal/regulatory requirements or voluntarily.
Asymmetry: Power dynamics influence relationships based on resource control.
Reciprocity: Cooperation driven by shared goals and mutual benefits.
Efficiency: Creation of value through enhanced internal efficiencies.
Stability: Organizations reduce uncertainty via stable IORS.
Legitimacy: Efforts to align with stakeholder expectations to build reputation.

Study Focus: Role of IORS in Canadian nonprofit sports organizations.
Drivers for participation based on Babiak (2007): Necessity, Reciprocity, Asymmetry, Efficiency, Stability, Legitimacy.

Key Issues:
- Budget constraints and accountability pressure.
- Rising expectations for performance at international levels.
Importance of partnerships between public and private sectors for future success.

Relationships develop through personal interactions, mutual understanding, and collaborative processes.

Exercise: Draw a contact map to visualize connections and interactions over the past 6 months.

Consideration of network types: diverse contacts expand social clusters and resource access.

Weak Ties: Connections between separate social networks that provide unique perspectives and information access.
Strengthening social networks can enhance innovation and entrepreneurial opportunities.

Discussion on the balance between competition and collaboration among organizations.
Different theoretical perspectives represent varying implications for interorganizational relations.