Collaborative Communities of Firms: Purpose, Process, and Design (Information and Organization Design Series Book 9)

Faced with the ever-accelerating pace of technological change and the restructuring of markets, many firms have been questioning the appropriateness of their own organizational structure and effectiveness. Consequently, we have witnessed much organizational experimentation and the development of new forms of organizing over the last decade. Firms are more dependent than ever on the need for continuous and radical innovations – and often innovations that go beyond their existing businesses. This challenges firms in terms of knowledge and idea sharing, and often necessitates the need to expand beyond the boundaries of the single firm for multi-party collaboration to meet serious challenges and develop creative solutions. Drawing from the Fourth International Workshop on Organization Design, and featuring contributions from an international array of specialists, this volume focuses on the expansion beyond the boundaries of the single firm and multi-firm networks, to include, for example, community-based organization designs. A community is a connected set of firms; the connections can take on many different dimensions. For organization design theory, community-based organizations have many implications. For one, organization design theory has to identify and describe designs that enhance collaborative behavior among firms without restricting the ability of the individual firm to continue to compete within its own marketplace. Moreover, organization design theory also has to identify and describe information processing strategies and designs that allow the continuous generation, sharing, and application of existing information and knowledge. The development of effective collaborative community designs is critically important to the global economy because, increasingly, our future depends on pursuing shared goals and sustainably developing our global commons. Ideally, the ideas and findings in this book will contribute to increased attention to new organization designs capable of meeting 21 st -century opportunities and challenges. Collaborative Communities of Firms 3 Contents 5 Contributors 7 Chapter 1: Introduction 9 1.1 Evolution of Collaboration Within and Between Organizations 9 1.2 Purposes and Benefits of Collaboration 10 1.3 Emerging Organization Designs for Innovation via Collaboration 11 1.4 Conclusion 12 References 12 Part I: Collaborative Capabilities and Processes 14 Chapter 2: Open Innovation Networks: The Evolution of Bureaucratic Control 15 2.1 Introduction 15 2.2 Open Innovation Networks as a Community-Based Organizational Form 17 2.2.1 Trust and Culture in the Community-Based Organizational Form 17 2.2.2 Bureaucratic Control in the Community-Based Organizational Form 18 2.2.3 Government Involvement in Open-Innovation Networks 19 2.3 Methods 19 2.3.1 Setting 20 2.3.2 Data Collection 22 2.3.3 Data Analysis 22 2.4 Findings 23 2.4.1 Phase 1: Mobilizing the Networks with Emphasis on Private Interests 23 2.4.2 Phase 2: Tightening Bureaucratic Control with Emphasis on Public Interests 25 2.4.3 Phase 3: Adaptation to Balance Private and Public Interests 28 2.5 Discussion and Implications 32 2.5.1 Implications for Community-Based OD Literature 32 2.5.2 Implications for the Control Literature 33 2.5.3 Implication for Practice 35 2.5.4 Limitations and Conclusion 35 References 36 Chapter 3: Network or Matrix? How Information-Processing Theory Can Help MNCs Answer This Question 40 3.1 The Need for MNCs to Use Multidimensional Strategies 40 3.2 Defining Characteristics of the Network Organization and the Matrix Structure 42 3.2.1 Network Organizations 42 3.2.2 Matrix Structures 44 3.3 Information Processing in a Network Organization and in a Matrix Structure 46 3.4 Some Contingency Variables Relevant to the Choice Between Network Organization and Matrix Structure 53 3.4.1 Contingency Variable 1: Relative Importance of an MNC’s Need for Local Adaptation and Global Integration 53 3.4.2 Contingency Variable 2: Need for Cross-Border Learning 55 3.4.3 Contingency Variable 3: Relative Importance of Exploration and Exploitation for an MNC 56 3.4.4 Contingency Variable 4: Average Level of Cultural and Geographic Distance Existing Between the Home and Host Countries of an MNC 57 3.5 Summary and Conclusions 59 References 59 Chapter 4: Participation in Innovation Communities: Strategies and Contingencies 63 4.1 Introduction 63 4.2 Innovation Communities and Organizational Transparency 64 4.3 Designing Organizational Interfaces for Transparency 67 4.3.1 Organizational Interface Design 67 4.3.2 Task Structure Design 69 4.3.3 Control of Employee Participation 71 4.4 Contingency Factors Affecting the Firm’s Transparency Strategy 73 4.5 Implications for Organization Design Theory and Practice 75 4.6 Conclusions 76 References 76 Chapter 5: Interfirm Communities: Neither Weak nor Strong Ties 78 5.1 Introduction 78 5.2 Knowledge Exchange in Social Networks 79 5.2.1 Knowledge Exchange in Social Networks: Contingent Factors 80 5.2.2 Critique of the Traditional Framework 81 5.3 Research Design 82 5.3.1 Case-Study Research Design 82 5.3.2 Empirical Background 83 5.4 Unisense: Neither Embedded nor Arm’s Length Ties 84 5.4.1 The Search Process 84 5.4.2 The Relations 84 5.5 Discussion 87 5.6 Implications for Theory on Organizational Design 89 5.7 Implications for Practice 90 References 90 Chapter 6: Collaborative Communities of Firms: Role of the Shared Services Provider 92 6.1 Introduction 92 6.2 From Self-contained Organizations to Collaborative Communities of Firms 93 6.2.1 Emergence of the Multi-firm Network Design 94 6.2.2 Enhancing Network Organizations with Community Values and Properties 94 6.3 Role of the Shared Services Provider in Three Collaborative Communities of Firms 95 6.3.1 Blade.org 96 6.3.1.1 Purpose/Shared Interest 98 6.3.1.2 Role of the Shared Services Provider 98 6.3.2 Kalundborg Industrial Symbiosis 100 6.3.2.1 Purpose/Shared Interest 101 6.3.2.2 Role of the Shared Services Provider 101 6.3.3 MG50 102 6.3.3.1 Purpose/Shared Interest 103 6.3.3.2 Role of the Shared Services Provider 104 6.4 Discussion and Implications 106 6.5 Conclusion 106 References 107 Chapter 7: Organizing for Flexibility: Addressing Dynamic Capabilities and Organization Design 108 7.1 Introduction 108 7.2 Theory Development 110 7.2.1 The Managerial Task: Developing Dynamic Capabilities 111 7.2.2 The Organization Design Task: Creating Adequate Organizational Conditions 112 7.2.2.1 The Design of Technology and Operational Flexibility 113 7.2.2.2 The Organizational Structure and Structural Flexibility 113 7.2.2.3 The Organizational Culture and Strategic Flexibility 114 7.2.2.4 Information Processing Routines 114 7.2.3 Hierarchy of Relationships 115 7.3 Methods and Results 116 7.3.1 Sample 116 7.3.2 Construct Measurement 120 7.3.3 Two-Stage Structural Equation Modeling 121 7.3.3.1 Analysis of Direct Relationships 122 7.3.3.2 Comparison of Models 123 7.4 Discussion 124 7.4.1 Implications for Organization Design Theory 124 7.4.2 Implications for Organization Design Practice 125 7.4.3 Limitations 125 References 125 Part II: Technical Issues 129 Chapter 8: Statistico-Organizational Theory: A New Theoretical Approach to Organizational Design 130 8.1 Introduction 130 8.2 Statistico-Organizational Theory 131 8.2.1 The Law of Small Numbers 134 8.2.2 Measurement Error 135 8.2.2.1 Profit Tends to Have More Measurement Error than Sales or Costs 136 8.3 Designing the Organizational Structure for Inference 140 8.4 Implications for the Theory and Practice of Organizational Design 143 8.5 Conclusion 145 References 146 Index 148 Front Matter....Pages i-viii Introduction....Pages 1-5 Front Matter....Pages 7-7 Open Innovation Networks: The Evolution of Bureaucratic Control....Pages 9-33 Network or Matrix? How Information-Processing Theory Can Help MNCs Answer This Question....Pages 35-57 Participation in Innovation Communities: Strategies and Contingencies....Pages 59-73 Interfirm Communities: Neither Weak nor Strong Ties....Pages 75-88 Collaborative Communities of Firms: Role of the Shared Services Provider....Pages 89-104 Organizing for Flexibility: Addressing Dynamic Capabilities and Organization Design....Pages 105-125 Front Matter....Pages 127-127 Statistico-Organizational Theory: A New Theoretical Approach to Organizational Design....Pages 129-146 Back Matter....Pages 147-148 Drawing from the Fourth International Workshop on Organization Design, with contributions by worldwide specialists, this book focuses on expansion beyond the boundaries of the single firm and multi-firm networks, including community-based organization designs.