Inter-Organizational Collaborations - Essay Example

Some organizations are driven into partnerships as a strategy of managing operating costs. Real inter-organizational collaboration can enable an entity to control its operating costs in a better way. In addition, these partnerships allow institutions to focus and direct their core capabilities to areas of significant returns. 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 the inter-organizational collaboration is the resource-based theory. The postulation of this theory is that joint ventures give entities a 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 the monopolistic advantage created by the strategic partners.

At the same time, The New Institutional Theory also tries to explain the 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 an organization’s ability to share an understanding of certain social structures in order to gain legitimacy. Moreover, there is also a regulatory dimension that emphasizes regulations that 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.

In terms of implications, inter-organizational collaborations give birth to a number of issues. These issues can be discussed theoretically as well as empirically. The structural theory is one of the approaches that have been widely used to explain the implications of inter-organizational arrangements (Cooper & Slagmulder, 2004, P. 16). According to the theory, inter-organizational arrangements affect the power, organizational culture, and general communication structures. In the real sense, this theory highlights the power redistribution effect as a result of inter-organizational arrangements. These methods directly affect the distribution of resources and technologies used in their production. They have a significant impact on the buyer-supplier relationships that the entity can enter into (Cooper & Slagmulder 2004, pp. 23).

In essence, different kinds of controls characterize inter-organizational arrangements. Entities entering into arrangements of this kind must be wary of both informal and informal controls that come into effect upon the enactment of these arrangements. Formal controls may take the nature of formal contracts and other formal procedures (Cooper & Slagmulder, 2004, pp. 25). Entities giving into collaborations with other organizations must be ready to give away controls regarding budgeting, regular preparation of financial accounts, variance analysis, etc. ( Dekker 2004, pp. 34)

The basis for government backing of collaborative groups is usually that such groups will lessen a perceived present lack of coordination among network actors. Policymakers can employ collaborative partnerships to reduce the transaction costs of networking. It can be done by doing things like backing a venue, sponsoring a coordinator, as well as staff, along giving administrative support. Other network organizations must not put up with these costs, this transforms the benefit-cost equation of membership of groups because organizational costs are now restricted mainly to time as well as travel. For group members then, the fundamental assertion is that contribution in group activities will boost awareness and trust.