Interorganizational Relationships
Lecture 1: Exploring the field
1. Intra-organizational relationships:
This refers to the interactions within an organization, which include
communication, collaboration, and coordination among employees, teams,
and departments. Intra-organizational relationships focus on how individuals
and groups work together to achieve organizational goals, solve problems,
and share knowledge. These relationships are critical in shaping the internal
culture and functioning of an organization.
2. Inter-organizational relationships:
These are the relationships between different organizations. Examples
include networks, alliances, supply chains, or project collaborations between
firms. Inter-organizational relationships focus on how organizations
collaborate with or compete against each other, as well as how they align
their strategies, resources, and goals to create value. The success of these relationships often depends on trust,
coordination, and shared objectives across organizational boundaries.
3. Institutional context:
This refers to the broader environment in which organizations operate, including the norms, values, regulations,
and rules that shape organizational behavior. Institutional contexts include societal expectations, government
policies, cultural norms, and industry standards. Organizations must navigate these external forces and adapt
their strategies to comply with legal and societal expectations while maintaining their internal goals.
4. Innovation:
Innovation can manifest in various ways, including new products, services, or organizational practices. It
focuses on how organizations create and implement novel ideas to maintain competitiveness and adapt to
changing environments. Innovation involves both technological advancements and improvements in
organizational structures and processes. Organizations need to foster an innovation culture to stay relevant in a
dynamic market, adapting to new societal, commercial, and technological development
1. Network as social structure
In simpler terms, a network is a group of connected items, called nodes,
that are linked together by relationships or connections. These
relationships can be positive (where the nodes are closely connected) or
non-existent (where there is no connection between the nodes).
• The nodes could be anything: individual people, teams,
departments, or even entire organizations.
• The ties (connections) represent the relationships between these nodes,
such as how people communicate, collaborate, or interact with each other
If you watch this structure, what do you see? What structural features? Not one
central focal actor, several brokers but not one. Separate network is not good, we
want it to be connected for info flow. A lot of clustering. A set of connectors
forming a small network inside the network.
This image depicts a network of organizations within an R&D consortium, where
the structure is decentralized and consists of several distinct clusters or sub-
networks. There is no central focal actor, but multiple organizations act as brokers,
linking different parts of the network. Within each cluster, there are strong
connections between organizations, suggesting tight collaboration, but these
clusters are somewhat isolated from each other. The network could benefit from
better overall connectivity to improve information flow and foster greater
collaboration across the entire consortium. The presence of connectors bridging
these clusters is key to facilitating communication and interaction within the
network.
1
,• Serendipitous Networks:
These are networks that form naturally between organizations through
random or chance interactions, like two organizations working together
on a small project without any long-term plan or shared goals. They might
not even know each other well, and they don’t have a common identity or
purpose. These connections just happen based on the direct relationships
between the organizations.
• Designed/Engineered (Purpose-Oriented) Networks:
These are networks that are created on purpose, often by one main
organization or through collaboration between professionals from
different organizations. The goal of these networks is to achieve something that none of the individual
organizations could do on their own. This kind of network is carefully planned and organized to accomplish
specific objectives.
What is a interorganizational relationship
An interorganizational relationship is the connection between two or more
organizations that work together to achieve their goals more efficiently and
effectively. These organizations might be independent (=autonomous) from
each other but decide to collaborate to meet shared objectives.
Types of Organizations Involved:
• Organizations can have different roles in an interorganizational
relationship. For example, they could be competitors, suppliers,
customers, service providers, or knowledge institutes.
• Despite the differences, they come together for mutual benefit.
Cooperation and Collaboration:
• These organizations may cooperate horizontally (at the same level
in the value chain, such as two companies in similar industries) or
vertically (in different stages of the value chain, such as a supplier
and a manufacturer).
Categories of Relationships:
• There are many names for interorganizational relationships,
including alliances, partnerships, joint ventures, consortia, etc.
• These relationships can be collaborative or cooperative, and they
can vary based on whether they are formed within the same
industry (inter-organizational) or across different industries (trans-
organizational).
Why do organizations collaborate with other organizations? (EXAM QUESTION)
Social Network Theory (SNT):
• What it is: This theory looks at the relationships and connections
between different actors (people, organizations, etc.) in a network.
It suggests that being well-connected in a network gives you more
power, resources, and opportunities.
• Connection to collaboration: Organizations collaborate with
others to build strong connections. By connecting with powerful
organizations, they strengthen their own position and increase their
influence in the industry or market, especially if they are new or
smaller, like a startup.
Resource Dependence Theory (RDT):
• What it is: This theory suggests that organizations depend on resources (such as materials,
information, or capital) from other organizations. The more critical the resource, the more the
organization needs to build strong relationships to ensure steady access to those resources.
• Connection to collaboration: When you build strong relationships with your suppliers—not just
formal contracts but a real connection—it helps reduce uncertainty. This is because you get to know
the supplier better, and trust develops over time. You understand how they work, and they
understand your needs. So, you’re less worried about whether they will actually deliver the goods or
services you need, especially in difficult situations.
2
, • For example, during the COVID-19 crisis, many businesses faced supply chain problems because of
shortages or delays. However, companies that had built good, long-term relationships with their
suppliers were more likely to get the supplies they needed on time. This is because those suppliers were
more willing to help them out, knowing the relationship was strong, and they could rely on each other.
Institutional Theory:
• What it is: This theory focuses on how organizations conform to the norms, values, and rules in their
environment (such as regulations or industry standards). Organizations often adjust their behavior to
gain legitimacy and be seen as trustworthy or reliable in the eyes of society and other organizations.
• Connection to collaboration: Organizations collaborate with others to signal that they are following
the accepted rules and standards in their industry. By working with respected organizations, they show
they are legitimate and meet industry expectations.
Resource-Based View (RBV):
• What it is: This theory argues that organizations gain competitive advantage by controlling valuable
resources that are rare, difficult to imitate, and hard to substitute. These resources can be knowledge,
technology, or specific capabilities.
• Connection to collaboration: The Resource-Based View (RBV) says that organizations form
relationships with others to access things they don’t have on their own, like knowledge, skills, or
materials. No organization can do everything by itself, because trying to do so would mean missing
out on the benefits of specialization—where other organizations focus on doing certain tasks really
well.
For example, a furniture company doesn’t mine its own wood or produce its own raw materials.
Instead, it buys the wood from a supplier who specializes in mining and processing it. This way, the
furniture company can focus on what it does best—making furniture—while relying on specialized
suppliers for the materials it needs. By forming relationships with other organizations, the furniture
company gains access to resources and expertise that it wouldn’t be able to produce on its own.
Transaction Cost Theory (TCE):
• What it is: This theory suggests that organizations seek to minimize the costs associated with making
transactions, such as negotiation costs or the costs of writing and enforcing contracts. It looks at the
best way to organize exchanges to avoid unnecessary expenses.
• Connection to collaboration: If the cost of negotiating contracts or constantly buying resources is
high, organizations might choose to form closer relationships or even buy from one partner directly.
Collaboration can help organizations streamline operations and avoid expensive or inefficient
transactions.
• → Transaction Cost Theory is about finding the most efficient way to work with others. If you
frequently work with partners, and the things you're exchanging are very specific (like custom-made
parts) and there's a lot of uncertainty, it might be better to just produce those things yourself or buy
them directly. On the other hand, if the exchanges are rare, the things you're buying are not unique, and
there’s little uncertainty, it’s easier and cheaper to just buy them. In between, there’s a middle ground,
where you might have a stable relationship with another organization, balancing both frequent
exchanges and some uncertainty.
1. Selection and deselection of partners:
This refers to the process of choosing the right organizations to work
with and, if necessary, removing or ending relationships with partners
that are no longer beneficial. Managers need to carefully select partners
who align with their goals, values, and needs. If a partner is not
performing well or no longer fits with the organization’s strategy, the
relationship might be ended (deselected).
2. Allocation and reallocation of tasks, resources, and responsibilities:
This involves deciding who will do what, and how tasks, resources (like
money or materials), and responsibilities will be shared between the
partner organizations. It’s a matter of deciding how much to formalize the relationship. For example:
o In more flexible partnerships (like alliances), organizations might prefer to keep things informal
and adaptable since they are working together on complex problems.
o In a supplier-customer relationship, however, it might be more important to make things very
clear and formal, perhaps putting everything in a written contract to avoid misunderstandings.
3
, 3. Regulation: negotiation and renegotiation of rules for collaboration:
This is about setting and adjusting the rules and terms for how the organizations will work together.
Sometimes, these rules need to be negotiated when the relationship begins, and they may need to be
renegotiated later as things change. This ensures that the collaboration stays fair, effective, and
aligned with both parties' needs and goals over time.
4. Evaluation of exchange relationships:
This means reviewing and assessing how well the relationship is working. Are both organizations
getting what they need from the partnership? Are they meeting their goals? Managers need to regularly
evaluate whether the relationship is still valuable and beneficial. This could include looking at things
like performance, efficiency, and mutual satisfaction.
Networks
What is a network?
The first part of this lecture was on inter-organizational relationships (bilateral relationships). If we’re going to
look at a network then we usually talk about three or more organizations. That is an important step.
Example: If you have one friend then you have a one-to-one relationship. If a third person comes into that, then
that brings more social dynamics.
1. Network as Social Structure:
• What it is: A network is made up of nodes (which could be
people, teams, or organizations) and ties (connections between
them). The important thing to understand here is that a network
isn't just about the existing connections, but also about the lack of
connections.
• Why the lack of ties matters: If every possible connection is made
between nodes (100% density), then there’s no real structure. For
example, in a network where everyone is connected to everyone
else, there is no clear pattern or structure. A structure only starts to
emerge when some connections are missing.
• Example: Imagine a network where one organization is in the
center, and others are on the edges. This structure only happens because there are missing ties between
the organizations on the edges (they’re not directly connected to each other). The missing connections
are what make the structure meaningful.
2. Networks as a Perspective and Empirical Tool:
• What it is: Social network analysis (SNA) is a way of studying patterns in the interactions between
people or organizations. It’s like looking at how people or groups are connected to each other and
identifying stable patterns in those connections.
• Example 1: Think of an anthill. If you look from a distance, all you see is ants moving around. But if
you watch a time-lapse video of the ants, you can see a pattern forming in their movement, like where
they gather or travel. Similarly, in social networks, even though interactions can change over time,
there are still recognizable patterns that we can study and understand.
• Example 2: In the traffic in the Netherlands, you could track how people move from suburban areas to
cities during rush hour. If you map this out, you can see a pattern in how people travel. This helps us
understand the structure of traffic flow, just like how social network analysis helps us see patterns in
people's interactions.
4
Lecture 1: Exploring the field
1. Intra-organizational relationships:
This refers to the interactions within an organization, which include
communication, collaboration, and coordination among employees, teams,
and departments. Intra-organizational relationships focus on how individuals
and groups work together to achieve organizational goals, solve problems,
and share knowledge. These relationships are critical in shaping the internal
culture and functioning of an organization.
2. Inter-organizational relationships:
These are the relationships between different organizations. Examples
include networks, alliances, supply chains, or project collaborations between
firms. Inter-organizational relationships focus on how organizations
collaborate with or compete against each other, as well as how they align
their strategies, resources, and goals to create value. The success of these relationships often depends on trust,
coordination, and shared objectives across organizational boundaries.
3. Institutional context:
This refers to the broader environment in which organizations operate, including the norms, values, regulations,
and rules that shape organizational behavior. Institutional contexts include societal expectations, government
policies, cultural norms, and industry standards. Organizations must navigate these external forces and adapt
their strategies to comply with legal and societal expectations while maintaining their internal goals.
4. Innovation:
Innovation can manifest in various ways, including new products, services, or organizational practices. It
focuses on how organizations create and implement novel ideas to maintain competitiveness and adapt to
changing environments. Innovation involves both technological advancements and improvements in
organizational structures and processes. Organizations need to foster an innovation culture to stay relevant in a
dynamic market, adapting to new societal, commercial, and technological development
1. Network as social structure
In simpler terms, a network is a group of connected items, called nodes,
that are linked together by relationships or connections. These
relationships can be positive (where the nodes are closely connected) or
non-existent (where there is no connection between the nodes).
• The nodes could be anything: individual people, teams,
departments, or even entire organizations.
• The ties (connections) represent the relationships between these nodes,
such as how people communicate, collaborate, or interact with each other
If you watch this structure, what do you see? What structural features? Not one
central focal actor, several brokers but not one. Separate network is not good, we
want it to be connected for info flow. A lot of clustering. A set of connectors
forming a small network inside the network.
This image depicts a network of organizations within an R&D consortium, where
the structure is decentralized and consists of several distinct clusters or sub-
networks. There is no central focal actor, but multiple organizations act as brokers,
linking different parts of the network. Within each cluster, there are strong
connections between organizations, suggesting tight collaboration, but these
clusters are somewhat isolated from each other. The network could benefit from
better overall connectivity to improve information flow and foster greater
collaboration across the entire consortium. The presence of connectors bridging
these clusters is key to facilitating communication and interaction within the
network.
1
,• Serendipitous Networks:
These are networks that form naturally between organizations through
random or chance interactions, like two organizations working together
on a small project without any long-term plan or shared goals. They might
not even know each other well, and they don’t have a common identity or
purpose. These connections just happen based on the direct relationships
between the organizations.
• Designed/Engineered (Purpose-Oriented) Networks:
These are networks that are created on purpose, often by one main
organization or through collaboration between professionals from
different organizations. The goal of these networks is to achieve something that none of the individual
organizations could do on their own. This kind of network is carefully planned and organized to accomplish
specific objectives.
What is a interorganizational relationship
An interorganizational relationship is the connection between two or more
organizations that work together to achieve their goals more efficiently and
effectively. These organizations might be independent (=autonomous) from
each other but decide to collaborate to meet shared objectives.
Types of Organizations Involved:
• Organizations can have different roles in an interorganizational
relationship. For example, they could be competitors, suppliers,
customers, service providers, or knowledge institutes.
• Despite the differences, they come together for mutual benefit.
Cooperation and Collaboration:
• These organizations may cooperate horizontally (at the same level
in the value chain, such as two companies in similar industries) or
vertically (in different stages of the value chain, such as a supplier
and a manufacturer).
Categories of Relationships:
• There are many names for interorganizational relationships,
including alliances, partnerships, joint ventures, consortia, etc.
• These relationships can be collaborative or cooperative, and they
can vary based on whether they are formed within the same
industry (inter-organizational) or across different industries (trans-
organizational).
Why do organizations collaborate with other organizations? (EXAM QUESTION)
Social Network Theory (SNT):
• What it is: This theory looks at the relationships and connections
between different actors (people, organizations, etc.) in a network.
It suggests that being well-connected in a network gives you more
power, resources, and opportunities.
• Connection to collaboration: Organizations collaborate with
others to build strong connections. By connecting with powerful
organizations, they strengthen their own position and increase their
influence in the industry or market, especially if they are new or
smaller, like a startup.
Resource Dependence Theory (RDT):
• What it is: This theory suggests that organizations depend on resources (such as materials,
information, or capital) from other organizations. The more critical the resource, the more the
organization needs to build strong relationships to ensure steady access to those resources.
• Connection to collaboration: When you build strong relationships with your suppliers—not just
formal contracts but a real connection—it helps reduce uncertainty. This is because you get to know
the supplier better, and trust develops over time. You understand how they work, and they
understand your needs. So, you’re less worried about whether they will actually deliver the goods or
services you need, especially in difficult situations.
2
, • For example, during the COVID-19 crisis, many businesses faced supply chain problems because of
shortages or delays. However, companies that had built good, long-term relationships with their
suppliers were more likely to get the supplies they needed on time. This is because those suppliers were
more willing to help them out, knowing the relationship was strong, and they could rely on each other.
Institutional Theory:
• What it is: This theory focuses on how organizations conform to the norms, values, and rules in their
environment (such as regulations or industry standards). Organizations often adjust their behavior to
gain legitimacy and be seen as trustworthy or reliable in the eyes of society and other organizations.
• Connection to collaboration: Organizations collaborate with others to signal that they are following
the accepted rules and standards in their industry. By working with respected organizations, they show
they are legitimate and meet industry expectations.
Resource-Based View (RBV):
• What it is: This theory argues that organizations gain competitive advantage by controlling valuable
resources that are rare, difficult to imitate, and hard to substitute. These resources can be knowledge,
technology, or specific capabilities.
• Connection to collaboration: The Resource-Based View (RBV) says that organizations form
relationships with others to access things they don’t have on their own, like knowledge, skills, or
materials. No organization can do everything by itself, because trying to do so would mean missing
out on the benefits of specialization—where other organizations focus on doing certain tasks really
well.
For example, a furniture company doesn’t mine its own wood or produce its own raw materials.
Instead, it buys the wood from a supplier who specializes in mining and processing it. This way, the
furniture company can focus on what it does best—making furniture—while relying on specialized
suppliers for the materials it needs. By forming relationships with other organizations, the furniture
company gains access to resources and expertise that it wouldn’t be able to produce on its own.
Transaction Cost Theory (TCE):
• What it is: This theory suggests that organizations seek to minimize the costs associated with making
transactions, such as negotiation costs or the costs of writing and enforcing contracts. It looks at the
best way to organize exchanges to avoid unnecessary expenses.
• Connection to collaboration: If the cost of negotiating contracts or constantly buying resources is
high, organizations might choose to form closer relationships or even buy from one partner directly.
Collaboration can help organizations streamline operations and avoid expensive or inefficient
transactions.
• → Transaction Cost Theory is about finding the most efficient way to work with others. If you
frequently work with partners, and the things you're exchanging are very specific (like custom-made
parts) and there's a lot of uncertainty, it might be better to just produce those things yourself or buy
them directly. On the other hand, if the exchanges are rare, the things you're buying are not unique, and
there’s little uncertainty, it’s easier and cheaper to just buy them. In between, there’s a middle ground,
where you might have a stable relationship with another organization, balancing both frequent
exchanges and some uncertainty.
1. Selection and deselection of partners:
This refers to the process of choosing the right organizations to work
with and, if necessary, removing or ending relationships with partners
that are no longer beneficial. Managers need to carefully select partners
who align with their goals, values, and needs. If a partner is not
performing well or no longer fits with the organization’s strategy, the
relationship might be ended (deselected).
2. Allocation and reallocation of tasks, resources, and responsibilities:
This involves deciding who will do what, and how tasks, resources (like
money or materials), and responsibilities will be shared between the
partner organizations. It’s a matter of deciding how much to formalize the relationship. For example:
o In more flexible partnerships (like alliances), organizations might prefer to keep things informal
and adaptable since they are working together on complex problems.
o In a supplier-customer relationship, however, it might be more important to make things very
clear and formal, perhaps putting everything in a written contract to avoid misunderstandings.
3
, 3. Regulation: negotiation and renegotiation of rules for collaboration:
This is about setting and adjusting the rules and terms for how the organizations will work together.
Sometimes, these rules need to be negotiated when the relationship begins, and they may need to be
renegotiated later as things change. This ensures that the collaboration stays fair, effective, and
aligned with both parties' needs and goals over time.
4. Evaluation of exchange relationships:
This means reviewing and assessing how well the relationship is working. Are both organizations
getting what they need from the partnership? Are they meeting their goals? Managers need to regularly
evaluate whether the relationship is still valuable and beneficial. This could include looking at things
like performance, efficiency, and mutual satisfaction.
Networks
What is a network?
The first part of this lecture was on inter-organizational relationships (bilateral relationships). If we’re going to
look at a network then we usually talk about three or more organizations. That is an important step.
Example: If you have one friend then you have a one-to-one relationship. If a third person comes into that, then
that brings more social dynamics.
1. Network as Social Structure:
• What it is: A network is made up of nodes (which could be
people, teams, or organizations) and ties (connections between
them). The important thing to understand here is that a network
isn't just about the existing connections, but also about the lack of
connections.
• Why the lack of ties matters: If every possible connection is made
between nodes (100% density), then there’s no real structure. For
example, in a network where everyone is connected to everyone
else, there is no clear pattern or structure. A structure only starts to
emerge when some connections are missing.
• Example: Imagine a network where one organization is in the
center, and others are on the edges. This structure only happens because there are missing ties between
the organizations on the edges (they’re not directly connected to each other). The missing connections
are what make the structure meaningful.
2. Networks as a Perspective and Empirical Tool:
• What it is: Social network analysis (SNA) is a way of studying patterns in the interactions between
people or organizations. It’s like looking at how people or groups are connected to each other and
identifying stable patterns in those connections.
• Example 1: Think of an anthill. If you look from a distance, all you see is ants moving around. But if
you watch a time-lapse video of the ants, you can see a pattern forming in their movement, like where
they gather or travel. Similarly, in social networks, even though interactions can change over time,
there are still recognizable patterns that we can study and understand.
• Example 2: In the traffic in the Netherlands, you could track how people move from suburban areas to
cities during rush hour. If you map this out, you can see a pattern in how people travel. This helps us
understand the structure of traffic flow, just like how social network analysis helps us see patterns in
people's interactions.
4
