Lecture 10 - Interorganizational Relationships (1)

Lecture Overview

• Lecture Title: Lecture 10 - Interorganizational Relationships (IORS)

• Instructor: Xi Chen

Chapter 5 Overview: Interorganizational Relationships

• 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.

Definitions

• Interorganizational Relationship:

  • Ongoing resource transactions and connections between two or more organizations.

• Organizational Ecosystems:

  • A community of organizations interacting with their environment.

Theoretical Perspectives on IORS

• Organization Types:

  • Dissimilar & Similar Relationships

  • Resource Population Ecology

• Types of Relationships:

  • Competitive Dependence

  • Collaborative Networks

  • Institutionalism

Competition vs. Cooperation

• 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.

Resource Dependence

• Organizations aim to minimize their dependencies through:

  • Interdependent relationships such as joint ventures and shared ownership.

  • Understanding power dynamics in organizational relationships.

Collaborative Networks

• Organizations unite to share scarce resources and achieve common goals.

• Example: Cooperative linkages within sustainable communities (e.g., Waterloo Region).

Trust in Cooperative Relationships

• 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.

Population Ecology

• Focuses on diversity and adaptation of organizations based on:

  • Organizational forms, technology, structure, products, and goals.

  • Processes of variation, selection, and retention within populations.

Competing Strategies

• Organizational Niche:

  • Generalist: Serves wide markets and offers diverse products.

  • Specialist: Targets narrow markets with focused offerings.

Institutionalism

• Success is defined by alignment with environmental norms and values.

• Isomorphism: Pressure for organizations to align to similar standards (e.g., regulations, certifications).

Factors Driving IORS

1. Necessity: Relationships formed to meet legal/regulatory requirements or voluntarily.

2. Asymmetry: Power dynamics influence relationships based on resource control.

3. Reciprocity: Cooperation driven by shared goals and mutual benefits.

4. Efficiency: Creation of value through enhanced internal efficiencies.

5. Stability: Organizations reduce uncertainty via stable IORS.

6. Legitimacy: Efforts to align with stakeholder expectations to build reputation.

Context of Canadian Sports Organizations

• Study Focus: Role of IORS in Canadian nonprofit sports organizations.

• Drivers for participation based on Babiak (2007): Necessity, Reciprocity, Asymmetry, Efficiency, Stability, Legitimacy.

Challenges in Canadian Amateur Sports

• 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.

Developing Strategic Relationships

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

Networking Activity

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

Types of Networks

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

Concept of Structural Holes

• Weak Ties: Connections between separate social networks that provide unique perspectives and information access.

• Strengthening social networks can enhance innovation and entrepreneurial opportunities.

Summary of Themes

• Discussion on the balance between competition and collaboration among organizations.

• Different theoretical perspectives represent varying implications for interorganizational relations.

Next Class

• Topic: The international environment

• Reading Assignment: Chapter 6.