RESOURCE DEPENDENCE

THEORY

MINIMIZE

AXIMIZE

Dependence on other org

Influence to make resource availa

Resource
Symbiotic
Competitive
Dependence
interdependencies
interdependencies
Theory

Resource
Symbiotic
Competitive
Dependence
interdependencies
interdependencies
Theory

Inter-organizational Strategies for

Managing Symbiotic

interdependencies

Strategy 1

REPUTATIO
N
How do they build reputation ???

fairnesspayment
high-quality
prompt
and goods
honesty
ofand
billsservices

Resulting in good
& relationships
With
suppliers / distributers
De Beers - Assorted diamonds but high quality

Strategy 2

COOPTATION

Bringing opponents to its side by giving

them stake or claim in what it does
EXAMPLE
Pharma companies & Doctors
Corporates & Top Executives of Banks
(Interlocking Directorate)

Strategy 3

STRATEGIC
ALLIANCE
2 or more organizations come
together to share resources

RPOSE: To develop new business opportunities Join

EXAMPLE: Microsoft & MTV

2005 Microsoft & MTV to integrated
MTV entertainment offering into
Windows media platform to compete with I Pod Apple
BMW & INTEL

STRATEGIC
ALLIANCE

Under SA 1

LONG TERM
CONTRACT

eement between 2 or more companies (mostly Proje

uce cost by sharing resources & also reduce financia

POOLED RESOURCES SHARING

(No bench time)

EXAMPLES
2 Construction companies- 850 million pipeline project
Truck company (less cost, trailer) & railroad company
(revenue)

Under SA 2

NETWORKS

Contracts between core company and

stakeholders/partners
Sharing resources with partner companies,
so that they also become efficient

SEE DIAGRAM

EXAMPLES
AT&T created network organization and linked its partners
so that it could produce digital answering machine

PRODUCT TRAINING
HELPING IMROVE
SERVICE DELIVERY

FARMER TRAINING
r SHARING Co. WAREHOUSE

CUSTOMER
AWARENESS
PROGRAM

Under SA 3

MINORITY OWNERSHIP

Will have minority stake in each other

Improve interdependencies leading to
strong co-operative bonds
Also know as Keiretsu

KEIRETSU

Capital Keiretsu

Financial Keiretsu

KEI RET SU

1) Capital Keiretsu

Used to manage input output linkag

2)Financial Keiretsu
Used to manage linkages among
diverse companies and usually
have a bank at their centre

Capital Keiretsu
In CK all companies in the network
benefits
Mainly the dominant ones
EXAMPLE
TOYOTA
Car reliability depends upon quality of input
Managing critical linkage (input output) is vital for success
To control input (price and quality)
Toyota took 49% stake in most of the supplier companies
Toyota not afraid of sharing proprietary information
because of its ownership stake

Financial Keiretsu
Cross share holding
Dominated by a large bank functioning as a
interlocking directorate
Dominant member selected from diverse
company and made the directors of the
bank
And also on each other company
Sharing of trade proprietary information possible

Under SA 4

JOINT VENTURE
IDBI & FEDRAL BANK
Gas Authority of India Limited(GAIL),
Oil and Natural Gas CorporationLimited
(ONGC),
Indian Oil CorporationLimited (IOC)
and
Bharat
Petroleum
Limited
A BHARATHI
GROUP Corporation
WALMART VENTURE
(BPCL)

Strategy 1

MERGER & TAKEOVER

Take over a supplier or Distributer

Now resource exchanges occur within

not between organisation

EXAMPLE
McDonaldss own vast ranches in Brazil (rears low
cost cattle)

Resource
Symbiotic
Competitive
Dependence
interdependencies
interdependencies
Theory

Resource
Symbiotic
Competitive
Dependence
interdependencies
interdependencies
Theory

Inter-organizational Strategies for

Managing Competitive

interdependencies

COLLUSION
a secret agreement among competitors to
share information for a deceitful or illegal purpose

CARTELS
an association of firms that explicitly agrees to
coordinate their activities
cartels restrict competition and result in higher prices for

COLLUSION
a secret agreement among competitors to
share information for a deceitful or illegal purpose
Competitors collude & sets industry standards

What price ? What product Specification ?

Or profit markup ?

CARTEL
Through collusion they form cartel
Without formal written agreement by signaling their
intension

Public announcement are one medium

ine announces price hike and wait for others to resp

Dell always ready to match up the
price decrease announced by HP

THIRD-PARTY LINKAGE
MECHANISMS
Regulatory body that allows organizations to
share information and regulate the way they
compete
EXAMPLE

Trade association , An organization that rep

other Co
Enables them to competitor to meet, share info &
informally allow them to monitor one another
Helps in reducing the fear of one organization
may deceive or outwit other

STRATEGIC
ALLIANCE