Interorganizational Relationships and Learning

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Interorganizational Relationships and Learning
By
Nicole Kehler

Copyright 2004, Nicole Kehler

Introduction
In the last two decades the literature concerning interorganizational relationships (IRs), particularly strategic alliances, joint ventures, and social network analysis, has exploded. There has been a growing interest in how learning occurs in these various forms of cooperative arrangements. The nascent literature concerning learning processes in IRs suggests that learning occurs on both micro and macro levels (e.g. Knight 2002). At the micro level of analysis, inter-personal links generally offer individuals the opportunity to share and learn skills that will improve their personal lives. At the macrolevel of analysis, IRs often provide a forum for professionals to share and receive knowledge which may result in improving their companies’ competitiveness and profitability. It is the latter level of analysis that this essay addresses, primarily focusing on the ways in which learning through IRs improves organizational life. IRs have the potential to add value to organizations in two ways: 1) they provide the possibility for firm innovation and enhancement, and 2) they also offer employees the chance to discuss current professional practices with others in related fields, which may enable employees to perform better their various tasks.

The purpose of this essay is to understand better the ways in which organizations learn through their use of IRs. First, it explores literature that discusses the various kinds of IRs and their functions and how interorganizational partnerships may contribute to learning within an organization. Next, it highlights the results of interviews of two local nonprofit CEOs who participate in IRs in an effort to compare the extent in which these individuals’ practical experience relates to and agrees with the scholarly literature. While the benefits of IRs are usually discussed in reference to their utilization in the public, private and nonprofit sectors, “dark networks,” or organizations and individuals which conduct illegal business transactions, also heavily rely on IRs. This issue is briefly discussed before the final section that discusses how the research of networks relates to several paradigms of organizational theory, particularly transaction costs economics, resource dependence, and institutional theory.

Types of Interorganizational Relationships
The importance and utilization of IRs is not a new phenomenon in organization theory research. What is new, however, are the efforts to study empirically the various aspects of IRs, including the learning that takes place through them, and a better understanding of how to manage them. Part of the challenge in studying IRs is the fact that they appear in many forms. An informative article by Barringer and Harrison (2000) distinguishes between the most commonly found types of IRs used by firms: joint ventures, networks, consortia, alliances, trade associations, and interlocking directorates. While these IRs are difficult to delineate clearly and privilege the for-profit sector, the distinctions offered by Barringer and Harris provide a valuable framework upon which future IR research can build1. Their findings are summarized in Table 1.

1

If these descriptions in are adhered to, there are certain characteristics that distinguish a network from an alliance, for example. However, much of the literature on IRs do not make these distinctions, and most IRs are referred to as network relationships. Therefore, much of the following discussion will use this same terminology.

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Table 1: Types of Interorganizational Relationships

Types of Interorganizational
Relationships
Joint Venture

Networks

Consortia

Alliances

Trade
Association

Description
• A circumstance in which two or more firms pool a portion of their resources to form a separately owned venture.
• They are traditionally used to enter into...
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