INTERORGANIZATIONAL RELATIONS: STRATEGIC ALLIANCES. At the organizational level of analysis, network theories examine interorganizational relations (IOR). Emergent properties arise when orgs interact, exchange, bargain, compete, collaborate,.
At the organizational level of analysis, network theories examine interorganizational relations (IOR). Emergent properties arise when orgs interact, exchange, bargain, compete, collaborate, ...
Interorg’l interactions involve many communication & exchange relations, creating various types of interorganizational networks:
► Spot market transactions
► Relational contracting
► Mergers & acquisitions
► Interlocking board directorates
► Joint ventures & IJVs
► Strategic alliances
IOR originate in combinations of environmental constraints and endogenous network structures that generate new social-economic relations intended to acquire control of resources & maximize org’l performances (profit, R&D innovation, sales,regulatory autonomy)
Gulati & Gargiulo dynamic model with endogenous feedback loop from present network structure (past alliances, common 3rd parties, joint centralities) to transform future alliances:
IOR analyses also focus on explaining relational structures at the complete network level, disregarding individual persons or orgs.
Kenis & Knoke (2002) combined organizational field with network properties to develop a field-net explanation of aggregate change
Changes in the formal properties of an organizational field’s communication network generate nonlinear rates of change in interorganizational tie-formation rates (e.g., strategic alliances):
RATE OF STRATEGIC ALLIANCE FORMATION
Between market relations & org’l hierarchies reside several short-lived, hybrid forms of interorganizational relationships
Strategic alliance: at least two partner firms that (1) remain legally independent; (2) share benefits, managerial control over performance of assigned tasks; (3) make contributions in strategic areas, e.g., technology or products(Yoshino & Rangan 1995)
SA governance forms vary in the types of legal and social mechanisms that coordinate and safeguard the alliance partners’ resource contributions, allocate their joint administrative responsibilities, & divide the rewards from their collaboration
(Todeva and Knoke 2003)
Evolutionary processes induce IOR as repeated experiences raise partners’ familiarity. Growing trust [among org agents?] lowers transaction costs by eliminating the need for written contracts as safeguards against opportunism (Ring & Van de Ven 1994; Gulati 1995)
Communication networks can facilitate flows of information among potential partners about alliance opportunities. CEO friendships, board interlocks, professional ties can all serve as intelligence-gathering channels. Because trust among partners is so crucial for success, communicating with partners-of-partners can help to verify past performance or misconduct.
Repeated alliances among orgs create strategic alliance networks
Strategic alliance network“set of orgs connected through their overlapping partnerships in different strategic alliances” (Knoke 2001:128; Todeva & Knoke 2002). Firms are closely tied to one another through many direct alliances or many indirect ties through third firms (i.e., partners-of-partners).
A firm’s strategic alliance network ties increases probability of accessing and using valuable resources held by the firm’s partners, including their:
Basic CSC concepts could help to explain the evolution of the strategic alliance network in the Global Information Sector (GIS). This sector increased collaborative agreements exponentially 1990-2000, creating a complex web of overlapping partnerships.
Next two figures show mean strategic alliances among 30 most-active firms & MDS distances/clusters on dyads’ # of annual partnerships.
Altho Japanese firms have higher probability of mobilizing resources from compatriots, what difficulties may they be creating for themselves by concentrating their strategic alliances so heavily among other Japanese firm partners?
Gulati, Ranjay and Martin Gargiulo. 1999. “Where Do Networks Come From?” American Journal of Sociology 104:1439-1493.
Kenis, Patrick and David Knoke. 2002. “How Organizational Field Networks Shape Interorganizational Tie-Formation Rates.” Academy of Management Review 27:275-293.
Knoke, David. 2001. Changing Organizations: Business Networks in the New Political Economy. Boulder, CO: Westview.
Todeva, Emanuela and David Knoke. 2002. “Strategische Allianzen und Sozialkapital von Unternehmen.” (“Strategic Alliances and Corporate Social Capital”) Kölner Zeitschrift für Sociologie und Sozialpsychologie. Sonderheft 42:345-380.
Yoshino, Michael Y. and U. Srinivasa Rangan. 1995. Strategic Alliances: An Entrepreneurial Approach to Globalization. Cambridge, MA: Harvard University Press.