Concept of Inter-Organizational Netw ork

B. Concept of Inter-Organizational Netw ork

1. Definition

St udy of int er-organizat ional net work is developm ent of m anagem ent lit erat ure (Savage, 1996). Based on history of organizational t heories, int er-organizational net w ork is

last change of organizational theory agenda t hat focuses on increasing int er-organizational net w ork (Leach et .al, 1994).

According t o Robert s (2000), “ collaborat ion, t ranslat ed as w orking t oget her is prem ised on t he principle t hat by joining forces part ies can accomplish more as a collect ive t han t hey can achieve by act ing as independent agent s” . Then, Gulati (1998) st at es “ int er- organizat ional cooperat ion is t hus a m eans by w hich organizat ion m anage t heir dependence on ot her organizat ions in t heir environment and at t em pt t o mit igat e t he uncert aint y generat ed by t hat dependence” .

Base on definition above, int er-organizational net w ork develop cooperat ion som e organizat ions that have forces t o cont rol scare resources in their environm ent .

2. Inter-organizational Netw ork Theories

There are some t heories t hat explain int er-organizat ional phenom ena, for exam ple resource dependency theory and inst itutional t heory.

According t o Preffer and Salancik, resource dependency t heory is t heory t hat explain that the goal of an organizat ion is t o m inimize it s dependency on ot her organizat ions for supply of scare resources in it s environm ent and to find ways of influencing them to m ake resources available (Jones, 2004). The st rengt h of one According t o Preffer and Salancik, resource dependency t heory is t heory t hat explain that the goal of an organizat ion is t o m inimize it s dependency on ot her organizat ions for supply of scare resources in it s environm ent and to find ways of influencing them to m ake resources available (Jones, 2004). The st rengt h of one

Therefore, organization att empt t o develop st rat egy t o m it igat e dependence on other organizat ions through int er-organizat ional net w ork.

Then, according t o Hodge and Ant hony (1988), there are 8 conditions t hat fost er int er-organizat ional relat ionships i.e.

1) Cost -benefit (inducem ent -cont ribut ion)

2) Pow er

3) Resource Scarcit y or Perform ance Dist ress

4) React ion t o Super ordinat e Goal or Out side Force

5) St ruct ural Conduciveness of t he Environment

6) Boundary Perm eabilit y

7) Organizat ion Goals

8) Opport unit ies t o Coorporat e

Resource dependence t heory is different from instit ut ional t heory. Resource dependence t heory focuses how develop st rat egy t o obt ain scare resource t hat is cont rolled by ot her organization. But, institut ional theory focuses values and norms in t he organizat ion t o obt ain essent ial resources in it s environment. To obt ain t hese resources, organizat ion at t em pt t o find out accept abilit y and legit imacy in it s environment .

Basically, inst itutional t heory places organizations in t he sam e cat egory as ot her social inst itutions such as t he fam ily and polit ical syst em . But, organizat ion and inst itution is different w hen t hey are cont rast ed w it h the economic or bureaucrat ic m odel t hat vies organizat ion as uniquely and form ally rat ional inst rum ent s for t he realization of clearly defined object ives. Once an organization is view ed as an inst itution, it takes on the sociological baggage t hat renders it less rat ional, less formal, and less single-mindedly goal direct ed. Calling organization “ inst itution” m eans t hat t hey are not simply black boxes t hat produce goods and services but human organizat ion driven by emot ional and t radit ion. View ing organizations as inst it utions means that organizat ion have a history, a culture, a set of values, t raditions, habit s, rout ines, and int erest s (Jaffee, 2001).

Inst it ut ional t heory is a theory t hat learn how organizat ions increase t heir capabilit y for survive and grow t h in environment sit uat ion unpredict able and compet itive t hrough legit imacy by t heir st akeholders (Jones, 2004). According t o Scot t (2001), institut ion is “ inst it ut ions consist of cognit ive, normat ive, and regulat ive st ruct ures and act ivit ies t hat provide st abilit y and meaning t o social behavior. Inst it ut ions are t ransport ed by various carriers – cult ures, st ruct ures, and rout ines – and t he operat e at mult iple levels of jurisdict ion” .

Based on definition above, t hree pillars of inst itut ions that becom e base on them t o obt ain legit imacy from their environm ent i.e. cognitive pillar, norm at ive pillar, and regulat ive pillar. Cognitive pillar involves sym bols, believes, and social ident ities. Normat ive pillar involves obligat ions, norms, and social values. Regulative pillar involves rulers, law s, and sanct ions (Jaffee, 2001; pow ers, 2001).

An institut ion find out legit im ating, according to M ayer and Row an (Jaffee, 2001), is required inst itutional isomorphism. Isom orphism is a single form or shape, anticipat es a An institut ion find out legit im ating, according to M ayer and Row an (Jaffee, 2001), is required inst itutional isomorphism. Isom orphism is a single form or shape, anticipat es a

M im et ic forces refer t o t he t endency for organizat ions t o imit at e t he procedures and st ructures of t hose organizat ions that are exem plary m odels, carry high prest ige, or have successfully adapt ed to t he environm ent . Japanese m anagem ent t echniques are prim e exam ple.

Norm at ive pressures operat e t o channel organizational behavior and procedures in appropriat e, expect ed, and legit im at e direct ions. The exam ples from higher educat ion apply here.

Coercive m echanisms imply som e form al consequences for failure t o conform wit h part icular operat ing procedures and st ructures. An exam ple would be t he regulat ory requirem ent s for indust ry.

This research is not focuses on shaping int er-organizat ional st rat egy, but it focuses on organizat ional capabilit y as inst itution that develops cooperat ion w ith other organizat ions t o democrat ic public service delivery. Therefore, inst itutional t heory is pow erful t heory t hat explains inst itutional phenomena, such as Becerra (1999) st at ed that legit im acy and st at us of an organizat ion depend on int er-organizat ional net w ork.