ORGANIZATION THEORY - DEFINITIONS
INTER ORGANIZATION THEORY (IOT)
● Absorptive capacity – The ability people or organizations have to process information
● Cognitive overload - Too much information leads to lower quality
● Governance structure – Specific institutional arrangement that coordinates and control transactions
● Transactions – Transfer of goods/service across a technologically separable interface
● Information asymmetry – When all parties do not possess the same information
● Appropriability – The degree to which an economic actor can protect its knowledge from leakage to other
parties
● Relational governance – Ongoing recurrent transactions, more than only economic relation (embedded
relationships between parties)
trust, embeddedness or reputational concerns = !
● governance structure - institutional arrangement that coordinates and controls economic transactions
between actors.
● Partial inclusion – Social actors can be part of different organizational structures, organization of activities
and behaviours into structures
● Organization’s boundaries – ‘Area’ where organization has control over participant’s actions relative to the
control of other social entities over these same activities
● Control – Ability to initiate or terminate actions at one’s discretion - Not absolute; There are always
competing claims of others
● Social control – Different extents to which individuals can be controlled by organization(s)
● Process of enactment – Perceptions, attention, and interpretation by organization members come to
define the context for the focal organization
● personal causation - we sometimes think that what a leader does is of vital importance of the
performance of the organization (see symbolic role management)
Relational exchange norms (ontmoedigen opportunistic behavior)
○ Relational focus - reflects the extent to which the change relationship is perceived as being
relatively more important to the parties than individual transactions
○ Restrain on power use - reflects the extent to which parties will exercise their legal rights under
contract. In relational exchange, the expectations is that restraint will be exercised
○ Solidarity - the process by which an exchange relationship is created and sustained. Complex
relational exchanges rely on trust
○ Role integrity - relational exchange involve high complex, multidimensional roles which
participants must keep fairly stable
○ Mutuality - implies requirements of a + incentive to exchange for both parties. In relational
exchanges, the parties expect generalized reciprocity emating from the ongoing relationshio
○ Flexilbility - change in the contract must be permitted within the existing relationship or it must
be possible for the outdated transaction to e renegotiated
● Resource interconnectedness – Defined as the number and pattern of linkages among organizations
● Economic institutions - Rules that structure economic behavior. How transactions are made
● RDT: activities of the actors are interlocked <verweven> in organizational structures.
→ in TCT: organization is there to organize transactions
⇒ completely different! No activities / social things happening here
INTER ORGANIZATION THEORY (IOT)
● Absorptive capacity – The ability people or organizations have to process information
● Cognitive overload - Too much information leads to lower quality
● Governance structure – Specific institutional arrangement that coordinates and control transactions
● Transactions – Transfer of goods/service across a technologically separable interface
● Information asymmetry – When all parties do not possess the same information
● Appropriability – The degree to which an economic actor can protect its knowledge from leakage to other
parties
● Relational governance – Ongoing recurrent transactions, more than only economic relation (embedded
relationships between parties)
trust, embeddedness or reputational concerns = !
● governance structure - institutional arrangement that coordinates and controls economic transactions
between actors.
● Partial inclusion – Social actors can be part of different organizational structures, organization of activities
and behaviours into structures
● Organization’s boundaries – ‘Area’ where organization has control over participant’s actions relative to the
control of other social entities over these same activities
● Control – Ability to initiate or terminate actions at one’s discretion - Not absolute; There are always
competing claims of others
● Social control – Different extents to which individuals can be controlled by organization(s)
● Process of enactment – Perceptions, attention, and interpretation by organization members come to
define the context for the focal organization
● personal causation - we sometimes think that what a leader does is of vital importance of the
performance of the organization (see symbolic role management)
Relational exchange norms (ontmoedigen opportunistic behavior)
○ Relational focus - reflects the extent to which the change relationship is perceived as being
relatively more important to the parties than individual transactions
○ Restrain on power use - reflects the extent to which parties will exercise their legal rights under
contract. In relational exchange, the expectations is that restraint will be exercised
○ Solidarity - the process by which an exchange relationship is created and sustained. Complex
relational exchanges rely on trust
○ Role integrity - relational exchange involve high complex, multidimensional roles which
participants must keep fairly stable
○ Mutuality - implies requirements of a + incentive to exchange for both parties. In relational
exchanges, the parties expect generalized reciprocity emating from the ongoing relationshio
○ Flexilbility - change in the contract must be permitted within the existing relationship or it must
be possible for the outdated transaction to e renegotiated
● Resource interconnectedness – Defined as the number and pattern of linkages among organizations
● Economic institutions - Rules that structure economic behavior. How transactions are made
● RDT: activities of the actors are interlocked <verweven> in organizational structures.
→ in TCT: organization is there to organize transactions
⇒ completely different! No activities / social things happening here
