Advantage Of Interorganizational Relationships

I. Introduction

That strategic alliance could take advantage of knowledge sharing and other resources is one of the most crucial reason for organizations to more and more involve in different types of interorganizational relationships (IORs). Utilizing those sources of knowledge sharing, organizations collaborate with each other to reduce uncertainty and support innovation. In those IORs, parties are suggested to build trust as one of the concrete conditions for successfully exchanging knowledge (Blomqvist, 2002; Parkhe, 1998; Sako, 1998). Trust not only facilitates communication, information sharing but also reduces conflicts in and within teams (Blomqvist, 2002; Creed & Miles, 1996).

Up to now, numerous scholars and practitioners have emphasised

Brass, Galaskiewicz, Greve, and Tsai, in a later study, define IORs and network in a simpler way as “network is a set of nodes and the set of ties representing some relationship, or lack of relationship, between the nodes” (2004). IORs exist in variety forms, and those most popular ones are alliances, joint ventures, vertical relationship (buyer–supplier agreements, licensing, and co-branding), franchising, networks (trade associations and consortia), and cross-sector partnership (Parmigiani & Rivera-Santos, 2011). Each of the form both create opportunities and threats for organizations when joining a strategic corporation, therefore, organizations normally take various variations into consideration before deciding which form of IORs they tackle, such as key activities, type of value creation, period of IORs, to name but a

Numerous studies about institutional theory state that institutional environment creates pressure to force organizations adapt to fit with (DiMaggio, 1988; DiMaggio & Powell, 1983; Meyer & Scott, 1983; Rowan, 1982; Scott, 1987; Scott & Meyer, 1983; Tolbert & Zucker, 1983). It is the joint pressure of mimetic forces, coercive forces, and normative forces which intangibly push organizations towards similarities with other established ones. Due to normative forces, organizations form relationships in order to be aligned with norms, rules, and values of the society, thus, gain legitimacy from their stakeholders. Meanwhile coercive forces underlie that organizations participate in IORs to gain necessary legal requirements from the environment they are embedded with, mimetic forces emphasis that organizations use IORs because of the bandwagon effects related to success of other parties in the industry. In conclusion, organizations tend to adopt structures and processes that are widely accepted to leverage their legitimacy to facilitate their market entrance and enhance their long-run