This paper tries to study the different aspects of Inter-Organizational Network through literature survey method. It concentrates on the core reasons for forming networks from two different perspectives (transactional and sociological). The elements of network formation are identified dividing them into essential and facilitating factors. It discusses effects of inter-organizational network on the industry. The paper also highlights the feature of knowledge transfer in organizations through networks. Lastly, it tries to focus on the possible impacts that the formation of networks can have on Human Resource Management functions of the networked organization. The paper concludes by asserting the need for more in-depth study on the possible impact on Human Resource Management of a networked organization.
Inter-organizational relations have taken shape in different forms. Organizations, among themselves, have formed contractual relationships or joint ventures or informal associations. Inter Organizational Network as a successful measure of increasing competitiveness has been recognized in various studies, e.g. the studies performed by Hartley et al (2002), Elworth (2000), Nooteboom et al (2000). Organizations form networks to be more successful in an increasingly competitive and uncertain market scenario. There have been studies to establish the effectiveness of forming and operating of these networks. (Samson Wong et al 2005, Downie et al 2002). The number and scope of inter-organizational networks have shown an increasing trend, especially in research oriented fields like biotechnology and pharmaceuticals. The growing phenomenon of inter- organizational network has also been referred as “virtual firm”.
The present study of Inter-organizational network limits itself to the following objectives- •To understand the reason or motivation behind forming of networks from different view-points. •To identify the different factors that are essential and helpful for the formation of inter-organizational network. •To find out the different impacts these networks can have on the industry. •To understand the important process of knowledge transfer within the network. •To study the possible impact of the network on the networked organization’s Human Resource Management function.
This paper is based entirely on literature-survey. This is also a limitation of the study. Articles published in international journals on Organization Theory and related subject, have been studied and utilized to derive the conclusions to the objectives specified. 2
4. Two perspectives: Transactional and Sociological-
The process of formation of inter-organizational network has been analyzed as a self-organizing process by Biggiero (2001). Examples of this kind of network in manufacturing sector in U.K. have been studied by Robertson (1996). The study of Cux et al (2003) about the Food processing industry in U.K. has revealed that the formation of inter-organizational network is an institutional response to technology.
Organization Theorists like Powell (1998) have generally explained the formation of networks from two distinct perspectives- i)One perspective views inter-organizational networks as a form of transaction and mutual exchange of rights. The perspective is based on the tenets of organization economics and business strategy. It focuses on the mechanism of contracts to explain inter-organizational network. ii)The second perspective views the phenomenon of inter-organizational network from a sociological point of view. It concentrates on the process rather than the output. This perspective also judges whether collaboration within the network is embedded in various networks. This perspective also focuses on the ability of organizations to combine their existing capabilities and competencies with those of the...