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

Inter Organizational Relationships Performance in Third Party Logistics: conceptual framework and case study

Supplier relationship management is an important challenge for shippers in logistics outsourcing. This paper attempts to understand the factors which affect inter organizational relationships performance in third party logistics and proposes a conceptual framework specifically for inter organizational relationship performance in third party logistics. We also draw a set of propositions from published research and exploratory inter-views with practitioners to explain inter organizational relationships performance in third party logistic net-works. Five main dimensions of inter organizational relationships are identified which affect performance in third party logistics: commitment, supplier adaptation, conflict resolution, partner fit and communication. In order to assess the validity of our conceptual model we include a case study in this paper. The case study is based on Shell Chemicals Europe and their portfolio of seventeen third party logistic service suppliers

Leveraging Open-standard Interorganizational Information Systems for Process Adaptability and Alignment: An Empirical Analysis

PurposeThe purpose of this paper is to understand the value creation mechanisms of open-standard inter-organizational information system (OSIOS), which is a key technology to achieve Industry 4.0. Specifically, this study investigates how the internal assimilation and external diffusion of OSIOS help manufactures facilitate process adaptability and alignment in supply chain network.Design/methodology/approachA survey instrument was designed and administrated to collect data for this research. Using three-stage least squares estimation, the authors empirically tested a number of hypothesized relationships based on a sample of 308 manufacturing firms in China.FindingsThe results of the study show that OSIOS can perform as value creation mechanisms to enable process adaptability and alignment. In addition, the impact of OSIOS internal assimilation is inversely U-shaped where the positive effect on process adaptability will become negative after an extremum point is reached.Originality/valueThis study contributes to the existing literature by providing insights on how OSIOS can improve supply chain integration and thus promote the achievement of industry 4.0. By revealing a U-shaped relationship between OSIOS assimilation and process adaptability, this study fills previous research gap by advancing the understanding on the value creation mechanisms of information systems deployment

Trust, Organizational Controls, Knowledge Acquisition from the Foreign Parents, and Performance in Vietnamese International Joint Ventures

Successful adaptation in strategic alliances "calls for a delicate balance between the twin virtues of reliability and flexibility" [Parkhe 1998]. On one hand, the joint venture must be flexible enough to respond to the uncertainties of competitive business environments because it is not feasible to plan for every possible contingency. Yet, on the other hand, unfettered flexibility invites dysfunctional behavior, such as opportunism and complacency. This delicate balance accompanies a parallel balance between trust and control of the joint venture. The primary goal of this study is to empirically examine this relationship in the context of Vietnamese international joint ventures (IJVs) by building on the model of knowledge acquisition and performance in IJVs established by Lyles and Salk [1996]. This study makes three major contributions to the literature. First it confirms several findings of the original Lyles and Salk study [1996]. Second, we strengthen Lyles and Salk's original model by incorporating multiple measures of both interorganizational trust and control as independent variables. Finally, this study represents one of the first in-depth examinations of business in the emerging Vietnamese economy.http://deepblue.lib.umich.edu/bitstream/2027.42/39713/3/wp329.pd

The Impact of Interorganizational Information Systems on the Flexibility of Organizations

A number of studies have shown that although the utilization of interorganizational information systems (IOS) can contribute significantly to organizational flexibility, they do not provide equal benefits to all trading partners. Also, the emergence of new technologies and the increasing use of the Internet in business-to-business commerce challenge the viability of the traditional “hub and spoke” systems and affect the flexibility of the participating organizations. By conducting this study we will try to understand not only how the use of IOS affects flexibility, but also, how organizational, behavioral and political issues influence the application and use of technology. This paper argues that a better understanding of the aforementioned issues, could result by re-examining the notion of flexibility both from a business network and individual firm perspective, and proposes a research approach

The effects of contract detail and prior ties on contract change : a learning perspective

Despite the large literature on alliance contract design, we know little about how transacting parties change and amend their underlying contracts during the execution of strategic alliances. Drawing on existing research in the alliance contracting literature, we develop the empirical question of how contract detail and prior ties influence the amount, direction, and type of change in such agreements during the collaboration. We generated a sample of 115 joint ventures (JVs) by distributing a survey to JV board members or top managers and found that the amount of contract change is negatively associated with the level of detail in the initial contract but is positively associated with the number of prior ties between alliance partners. In relation to the direction of contract change, we find that the level of detail of the initial agreements negatively correlates with the likelihood of removing or weakening existing provisions and that prior collaborative experience positively correlates with the likelihood of strengthening of existing provisions or adding of new ones. We also find that prior ties affect the type of change in that JV parents prefer to change enforcement provisions more so than the coordination provisions in the contract. Our paper generates new insights on the complementarities between relational governance and transaction cost economics perspectives on alliance contracting