Interorganizational RelationashipChapter 3

Group 3簡碩辰　張桂芳　林蔚儒

From understanding the theory and design of organization , THOMSON

Business Network!

Importance of suppliers

From Competing in a Flat World, 培生

Supply ChainSupport Processes

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Supplier relationship process

New service/ product development

Order fulfillment process

Customer relationship management

From Pearson Education, Inc. Publishing as Prentice Hall.

Customer１　

Other organizations

Self organization

Collaboration?

Supplier

Framework of interorganizational relationships

ResourceDependence

ResourceDependence

Population Ecology

Population Ecology

CollaborativeNetwork

CollaborativeNetwork InstitutionalismInstitutionalism

Organizational type

Dissimilar Similar

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Cooperative

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From understanding the theory and design of organization , THOMSON

Other organizationsSlef organization

autonomy

dependence

Trade off

Resource Dependence

The amount of dependence

The importance of the resources

The monopoly power controlling the resource?

Five Forces Analysis

Resource Strategy

• purchasing ownership• signing long-term contracts• joint ventures• building relationships in other ways• interlocking directorships• joining trade associations• merging with other firms• taking political actions

Less power

• controlling other firms

Much Power

Introduction

• 8,613 stores and club locations in 14 countries

• Employ more than 2 million associates

• Serve more than 176 million customers a year

It’s the 8th trade associate of China, preceding Russia, Australia and Canada if wal-mart is an independent economy entity <China business journal, 11/29, 2004>

The bargaining power come from excellent strategies

Bargaining power

Lowest prices support high sales

Efficiency and scale

Highest technology Culture Relationship Operation

management

Direct purchasing Work flowRFID

Information

POS Sharing information

Collaborative Networks

• Collaborative Networks • Why Collaboration?

• From Adversaries to Partners

Collaborative Networks• Traditionally: Relationship between organizations and their suppliers has been an adversarial one.

• Now: Companies join together to become more competitive and to share scarce resources.

Why Collaboration?• Major reasons are sharing risks when entering new markets, mounting expensive new

programs and reducing costs, and enhancing organizational profile in selected industries or technologies.• Interorganizational linkages provide a kind of safety net that encourages long-term

investment and risk taking.• Companies can achieve higher levels of

innovation and performance.

From Adversaries to PartnersTraditional Orientation: Adversarial New Orientation : Partnership

Low dependence Suspicion, competition, arm’s length

Detailed performance measures, closely monitored Price, efficacy, own profits Limited information and feedback

Legal resolution of conflict

Minimal involvement and up-front investment, separate resources Short-term contracts Contract limiting the relationship

High dependence Trust, addition of value to both sides, high commitment Loose performance measures, problems discussed Equity, fair dealing, both profit Electronic linkages to share key information, problem feedback, and discussion Mechanism for close coordination, people on site Involvement in partner’s product design and production, shared resources Long-term contracts Business assistance beyond the contract

Population Ecology

• Introduce Population Ecology

• Organizational Form and Niche

• Process of Ecological Change

• Strategies for survival

Population Ecology• Population ecology perspective focuses on organizational diversity and adaptation within a population of organizations.• A population is a set of organizations engaged in similar activities with similar patterns of resource utilization and outcomes.• Organizations within a population compete

for similar resources or similar customers.

Organizational Form and Niche

• Organizational form is an organization’s specific technology, structure, products, goals,

and personnel, which can be selected or rejected by the environment.

• Niche: A domain of unique environmental resources and needs.

Process of Ecological Change

Variation

Selection Retention

Large number of variations appear in the population of organizations

Some organizations find a niche and survive

A few organizations grow large and become institutionalized in the environment

Strategies for survival• Another principle that underlies the population

ecology model.• Generalist and specialist strategies distinguish

organizational forms.• Generalist: wide niche or domain, broad range of products or services or serve a broad market.• Specialist: narrower range of goods or services or serve a narrower market.

Institutionalism

• Argument of Institutionalism• Institutional Environment & Legitimacy• Institutionalism & Organizational Design• Institutional Similarity of Organizations• Three mechanisms for Institutional Adaption

1. Mimetic Force 2. Coercive Force 3. Normative Force

Institutionalism view and Oranizational Design

• Two essential dimensions of Organizations　－ Technical Dimension　－ Institutional Dimension

• Expectation from Environment• Respense to the expectations• Form similarity of Organizations in similar

population

Three mechanisms for Institutional Adaption

• Mimetic Force　－ responses to uncertainty

• Coertive Force 　－ Stem from political influence

• Normative Force　－ due to common training and

professionalism

Summary of Chapter 3• Organizations are in Ecosystem• Framework of interorganizational relationships

• Resource Dependence – struggle for autonomy• Collaborative Network – thrive through collaboration• Population Ecology – diversity of organizations• Institutionalism – seek legitimacy from external Env.