Organizational Relationships In Organizations

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Memo #4 Companies are changing the way they organize and structure themselves. Nowadays, organizations are building relationships with other companies so they are able to get supplies, materials, and information. There are new trends in organizing companies, which is primarily the horizontal relationships across organizations, and this is why managers not only need to focus and worry about their own company but also manage a whole set of inter-organizational relationships which are more complex. Inter-organizational relationships are the transactions, flows and linkages that occur between two, or more, organizations and have until lately been left to be a necessary evil in order to survive. The view now is that the organizations create an …show more content…

Relationships can be characterized by being cooperative/competitive and dissimilar/similar. There are four types; the first one is called resource dependence theory, which describes rational ways that organizations deal with each other to reduce dependence on the environment. Then, there is the one about collaborative network, wherein organizations allow themselves to become dependent on other organizations to increase value and productivity for all. The third one is population ecology, which examines how new organizations fill niches left open by established organizations and how a rich variety of new organizational forms benefit society. The final approach is called institutionalism, which explains why and how organizations legitimate themselves in the larger environment and design structures by borrowing ideas from each other. …show more content…

The norms and values of the institutional environment, are the norms and values of the stakeholders. These give a firm legitimacy, without which they cannot do their job. Legitimacy gives a company a reason to keep on conducting business. When a new company starts, it may not have much legitimacy, but once they are established it will need to have that legitimacy and will morph into an institution. The institutional view shows the organization as having two dimensions. They are the technical and the institutional. While technical deals with the day to day work, the institutional deals with the how the organization is seen by the public. Some firms may institute changes that although they may not be beneficial, will offer legitimacy to the

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