Coping with Problems of Understanding in Interorganizational Relationships: Using Formalization as a Means to make Sense

Research into the management of interorganizational relationships has hitherto primarily focused on problems of coordination, control and to a lesser extent, legitimacy. In this article, we assert that partners cooperating in such relationships are also confronted with ‘problems of understanding’. Such problems arise from differences between partners in terms of culture, experience, structure and industry, and from the uncertainty and ambiguity that participants in interorganizational relationships experience in early stages of collaboration. Building on Karl Weick’s theory of sensemaking, we advance that participants in interorganizational relationships use formalization as a means to make sense of their partners, the interorganizational relationships in which they are engaged and the contexts in which these are embedded so as to diminish problems of understanding. We offer a systematic overview of the mechanisms through which formalization facilitates sensemaking, including: (1) focusing participants’ attention; (2) provoking articulation, deliberation and reflection; (3) instigating and maintaining interaction; and (4) reducing judgment errors and individual biases, and diminishing incompleteness and inconsistency of cognitive representations. In this way, the article contributes to a better understanding of the relationships between formalization and sensemaking in collaborative relationships, and it carries Karl Weick’s thinking on the relationship between sensemaking and organizing forward in the context of interorganizational management.Formalization;Sensemaking;Interorganizational Cooperation;Understanding

Consolidation in the air transport sector and antitrust enforcement in Europe

The paper aims at analysing the role for Antitrust intervention in the light of the consolidation trend of the airline industry in Europe. The almost full liberalization in the aviation sector (at least for intra-community routes) leaded to a situation where, at the same time, (i) new players have been entering the market with an increase in competition (actual and potential) on EU routes, and (ii) deep forms of co-operation (alliances and code sharing) and integration (mergers) have been exploited to better perform at national and international level. The paper highlights the economic analysis behind Antitrust assessment in the evaluation of mergers and cooperation agreements in the air transport sector. Consolidated standards for market definition, competitive assessment and feasible remedies are presented and discussed in the light of the relevant EU case law. Moreover, according to the radical changes occurring in the industry – i.e. the emergence of peculiar market forces such as low cost carriers and their interaction with traditional full service carriers – some preliminary considerations are introduced on the likely need for adjusting the assessment criteria for an effective Antitrust intervention

le réseau supply chain: approches pratiques et de confiance pour la réussite à long terme (supply chain network: trust and practical approaches to longterm success)

La Chaîne d’Offre (Supply Chain) fait partie de la coopération interentreprises et de la dynamique organisationnelle de nombreuses activités, processus et systèmes. C’est le défi pour chaque partenaire d’établir une stratégie de définition des facteurs clés de la réussite et de connaissance sur les façons dont lui et les autres partenaires interagissent. Etant donné que chaque relation joue un rôle crucial, tous les partenaires ont le même poids dans la satisfaction ininterrompue de la demande. La confiance est le connecteur le plus important du point de vue de réussite. Toutes les autres relations sont fondées sur la confiance. Par conséquent, ce papier considère le réseau de la chaîne d’offre comme un réseau de valeurs et met l’accent sur les différentes facettes de la confiance, sur les stratégies fondées sur la confiance et fait de propositions sur l’utilisation de la confiance comme facteur clé dans la réussite opérationnelle, tactique et stratégique d’un réseau de chaîne d’offre. The Supply Chain (SC) falls within the scope of inter-company co-operation and the organizational dynamic of new organizational forms and comprises many activities, processes and systems. It is the duty of each partner (participant) to get to know the key factors to success and how each interacts with the others. The connectors, given that each relationship plays a crucial role, are of equal value in continuously satisfying demand. Trust is the most important connector with a view to success. All the other relationships made are based on trust. Consequently, this paper lays stress on the Supply Chain network as a “network of values” and on the different dimensions of shared trust, the strategies based on trust and the suggestions for using trust as the key factor in the operational, tactical and strategic success of an SC network.the supply chain, trust, inter-company, cooperation

Designing Allocation Mechanisms for Carrier Alliances

The goal of the first part of this thesis is to obtain a high-level theoretical understanding of how an alliance can be managed such that its resources are used in an optimal manner. We propose a pricing mechanism to manage the interactions of carriers, through the allocation of alliance resources and profits, in a manner that encourages individual carriers to make decisions that are optimal for the alliance. Our methodology is based on modeling carrier behavior as linear programs, which are incorporated into a mechanism that manages carrier interactions by appropriately setting resource prices. After introducing two distinct behavioral models, the performance of the mechanism using each model is analyzed for its ability to ensure alliance optimal behavior is attained. We find that the behavioral model selected can significantly impact the characteristics of allocations obtained using the mechanism. In the second part of the thesis, we seek to establish practical insights regarding how the characteristics of potential partners impact the benefit that can be gained by collaborating with these partners. Computational experiments are conducted to evaluate the impact of network size, fleet capacity, demand distribution, and network compatibility on the benefit associated with collaborating. A comprehensive study for simulated two and three-carrier alliances establishes general insights regarding the compatibility of carriers with varying network sizes and fleet capacities. The impact of increasing hub-to-hub connectivity between partnering carriers is then investigated, followed by a study of the effect of market overlap on alliance success. Finally, a real-world cargo alliance is analyzed. In the third and final part of this thesis, we develop new approaches for determining and inducing fair profit allocations in alliances, providing alternatives to traditional approaches which equate minimum acceptance requirements and satisfaction. The mechanism established in the first part of the thesis is adapted to more precisely control the profit allocations obtained, in particular so that an allocation as close to some predetermined fair" allocation is obtained. Several measures of fairness are proposed and implemented, and their performance analyzed for each of the behavioral models discussed in the first part of the thesis.Ph.D.Committee Co-Chair: Ergun, Özlem; Committee Co-Chair: Sokol, Joel; Committee Member: Erera, Alan; Committee Member: Johnson, Ellis; Committee Member: Toktay, Beri

Modeling the Impacts of Alternative Emission Trading Schemes on International Shipping

Various market-based measures have been proposed to reduce CO2 emissions from international shipping. One promising mechanism under consideration is the Emission Trading Scheme (ETS). This study analyzes and benchmarks the economic implications of two alternative ETS mechanisms, namely, an open ETS compared to a Maritime only ETS (METS). The analytical solutions and model calibration results allow us to quantify the impacts of alternative ETS schemes on the container shipping sector and the dry bulk shipping sector. It is found that an ETS, whether open or maritime only, will decrease shipping speed, carrier outputs and fuel consumption for both the container and dry bulk sectors, even in the presence of a “windfall” profit to shipping companies. Under an open ETS, the dry bulk sector will suffer from a higher proportional reduction in output than the container sector, and will thus sell more emission permits or purchase fewer permits. Under an METS, container carriers will buy emission permits from the dry bulk side. In addition, under an METS the degree of competition within one sector will have spill-over effects on the other sector. Specifically, when the sector that sells (buys) permits is more collusive (competitive), the equilibrium permit price will rise. This study provides a framework for identifying the moderating effects of market structure and competition between firms on emission reduction schemes, and emphasizes the importance of understanding the differential impacts of ETS schemes on individual sectors within an industry when considering alternative policies

Coping with Problems of Understanding in Interorganizational Relationships: Using Formalization as a Means to make Sense

Research into the management of interorganizational relationships has hitherto primarily focused on problems of coordination, control and to a lesser extent, legitimacy. In this article, we assert that partners cooperating in such relationships are also confronted with ‘problems of understanding’. Such problems arise from differences between partners in terms of culture, experience, structure and industry, and from the uncertainty and ambiguity that participants in interorganizational relationships experience in early stages of collaboration. Building on Karl Weick’s theory of sensemaking, we advance that participants in interorganizational relationships use formalization as a means to make sense of their partners, the interorganizational relationships in which they are engaged and the contexts in which these are embedded so as to diminish problems of understanding. We offer a systematic overview of the mechanisms through which formalization facilitates sensemaking, including: (1) focusing participants’ attention; (2) provoking articulation, deliberation and reflection; (3) instigating and maintaining interaction; and (4) reducing judgment errors and individual biases, and diminishing incompleteness and inconsistency of cognitive representations. In this way, the article contributes to a better understanding of the relationships between formalization and sensemaking in collaborative relationships, and it carries Karl Weick’s thinking on the relationship between sensemaking and organizing forward in the context of interorganizational management