This is because collaborations make internal resources available which can be directed to other purposes in the organization (Dekker 2004, pp. 29). At the same time, partnerships of this kind can enable some organizations to gain access to restricted markets especially in international markets. This directly widens the market for the products of the organization. Moreover, inter-organizational collaborations enable the involved entities to share risks. Spreading risks is an important strategy for managing risk.
Another perspective of motives behind inter-organizational collaboration is the resource-based theory. The postulation of this theory is that joint ventures give entities competitive edge over other players in the industry. These collaborations bring together gifts and talents that act as an incredible ingredient for innovation and creativity. These skills and capabilities are not only unique, but not easily replicable as well. These skills and capabilities are used strategically by the organization to harness superior productivity in all aspects of the organization. In addition to resource-based theory, there is also the Such Theory. This theory thrives on monopolistic advantage created by the strategic partners.
At the same time, The New Institutional Theory also tries to explain motives behind inter-organization collaboration in relation to gaining legitimacy. These collaborations can enable an organization to gain legitimacy in any given social setup. A normative approach highlights organization’s ability to share understanding of certain social structure in order to gain legitimacy. Moreover, there is also a regulatory dimension that emphasizes on regulations which facilitate the establishment of joint ventures (Dekker 2004, pp. 33). Lastly, it has been proven that collaborative strategies have the ability to minimize uncertainty caused by market failures.