Making Sense of Formalization in Interorganizational Relationships: Beyond Coordination and Control

Paul W.L. Vlaar (Obdam, January 4, 1978) obtained his M.Sc. degree in Economics (Cum Laude) from Wageningen University, The Netherlands. He is currently an assistant professor of strategic management at RSM Erasmus University. His research interests include interorganizational cooperation, crossdisciplinary initiatives focusing on organizational structuring and design processes, new business development, and strategic change. His research has been published or is forthcoming in the European Management Journal, several edited books by Elsevier and Palgrave, and the Maandblad voor Accountancy en Bedrijfskunde (Dutch). He currently serves as an ad-hoc reviewer for the Strategic Management Journal and he has presented his research at major international conferences, such as those of the Academy of Management and the Strategic Management Society.Strategic alliances, buyer-supplier relationships, joint ventures and other forms of interorganizational cooperation are of increasing importance for the competitive advantage of organizations. Formalization – in the form of contracts, rules and procedures – is considered to be a crucial factor for these relationships. Nevertheless, an integrative framework of its role in interorganizational relationships has hitherto remained absent in the literature. Drawing on conceptual developments, an in-depth case study and survey data, this study provides such an integrative framework. Six main research findings emerge. First, tensions between the need and the ability to formalize can be reduced by investing in information processing and sensemaking. Second, formalization has functions beyond coordination and control, such as increasing legitimacy and enabling sensemaking. Third, managers are not only occupied with the “right” degree of formalization, but also with managing tensions between the functions and dysfunctions of formalization. Fourth, when formalization is accompanied by standardization, its contribution to interorganizational performance declines, due to lower degrees of “mindfulness” by contracting parties. Fifth, interorganizational performance is highly dependent upon the levels of formalization and trust at the start of relationships, with intermediary levels of both governance forms exhibiting more positive effects than extreme levels. Finally, formalization is substituted and complemented by other governance mechanisms, requiring partners to consider portfolios of mechanisms when deciding on formalization. These findings and the integral framework to which they are connected suggests that researchers and practitioners should regard formalization from multiple disciplines, theories and perspectives. They enrich their understanding of its role in interorganizational relationships, and enable them to utilize formalization so that it contributes to performance.Strategische allianties, klant-leverancier relaties, joint ventures en andere vormen van interorganisatorische samenwerking zijn van toenemend belang voor het concurrentievermogen van ondernemingen. Formalisering – in de vorm van contracten, regels en procedures – wordt beschouwd als een cruciale factor voor het slagen van dergelijke relaties. Desondanks bestaat er in de literatuur tot op heden geen integraal raamwerk dat de rol van formalisering in interorganisatorische relaties beschrijft. Op basis van conceptuele ontwikkelingen, een case studie en enquêtes, voorziet deze studie in een dergelijk raamwerk. De studie leidt tot zes kernbevindingen. Ten eerste kunnen spanningen tussen de behoefte en de mogelijkheid tot formalisering worden gereduceerd door te investeren in informatieverwerking en zingeving. Ten tweede functioneert formalisering niet alleen als middel om coördinatie en beheersing te bewerkstelligen, maar ook als een mechanisme ten behoeve van legitimatie en zingeving. Ten derde zijn managers niet alleen gericht op de “juiste” mate van formalisering, maar ook op het managen van de spanningen tussen de functies en disfuncties van formalisering. Ten vierde wordt de functionaliteit van formalisering in interorganisatorische relaties sterk gereduceerd door het gebruik van standaardprocedures voor onderhandelings- en contracteringsprocessen, omdat dit een lagere mate van “mindfulness” van contractpartijen met zich meebrengt. Ten vijfde zijn interorganisatorische prestaties sterk afhankelijk van initiële niveaus van formalisering en vertrouwen, waarbij intermediaire niveaus van beide beheersingsvormen een positievere invloed hebben op interorganisatorische prestaties dan extreme niveaus. Ten slotte blijkt dat formalisering wordt gesubstitueerd en gecomplementeerd door andere mechanismen. Deze bevindingen en het integrale raamwerk waaraan ze zijn verbonden, geven aan dat onderzoekers en managers formalisering vanuit meerdere disciplines, theorieën en perspectieven dienen te beschouwen. Ze verrijken ons begrip van de rol die formalisering inneemt in interorganisatorische relaties en zorgen ervoor dat formalisering zo wordt ingezet dat het bijdraagt aan interorganisatorische prestaties

Free Access to Public Information - More Transparency, Less Corruption: The Case of Republic of Macedonia

The traditional model of not transparent administration today disappears step by step. Citizens are increasingly becoming an equal entity with state institutions which have responsibility to ensure protection of their rights, accountability, openness and transparency in its operations - as the basic principles upon which rests the principle of good governance. Therefore, adoption of a law of free access to public information in many countries in the world which seek to enhance democracy in their societies today is a trend (process) that can not stop. Nowadays, countries that don’t have such a law can not claim that they have full democracy. One of the reasons for passing this law is reducing corruption. Corruption is based on secrecy. Citizens and institutions become corrupted when the public has no insight into their work. If the work of public institutions is transparent and offered for public inspection, then the chance for them to be corrupt is smaller. Republic of Macedonia has adopted the Law of free access to public information in 2006. This paper analyzes the law and its application; the situation in Macedonia after the adoption of the law; concluding that despite some inconsistencies, the law has contributed to increasing transparency and reducing corruption. Keywords: Free access, information, transparency, corruption