Firms, Organizations and Contracts: A Reader in Industrial Organization

By Peter J. Buckley; Jonathan Michie | Go to book overview

14 Joint Ventures and Interorganizational Interdependence

Jeffrey Pfeffer and Phillip Nowak

There are many varieties of interorganizational linkage. Corporations interlock their boards of directors ( Dooley, 1969; Levine, 1972; Pfeffer, 1972a); there is movement of personnel from one organization to another ( Baty, Evan, and Rothermel, 1971; Pfeffer and Leblebici, 1973); forms of contractual and noncontractual relations develop ( Macaulay, 1963); and, at times, organizations absorb other organizations through merger ( Pfeffer, 1972b). The varieties of linkage have been discussed by Thompson and McEwen ( 1958), who noted that goals and actions of organizations inevitably are constrained by their environments. Interorganizational linkages enable the organization to manage some of its environmental constraints and control some of the contingencies it confronts. Thompson and McEwen wrote that organizations face a dilemma in dealing with their environments. To the extent that the organization becomes more interlocked with another organization, it can rely more on the other organization's performance; but, also, it loses some of its own independence and discretion. Guetzkow ( 1966), discussing interorganizational relations, has hypothesized that less formal varieties of interorganizational linkage precede more formal arrangements.

There are several conceptual frameworks available for use in understanding interorganizational phenomena. Levine and White ( 1961) have argued for the utility of an exchange framework, and Evan ( 1966) has proposed the organization-set as a useful analytical concept. Pfeffer ( 1972b) has argued that interorganizational activity is undertaken to manage the

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The authors gratefully acknowledge the support of the Institute of Industrial Relations at the University of California at Berkeley. The Federal Trade Commission, particularly Mr David Penn, was most helpful in furnishing the data used in this study. The conclusions and inferences are those of the authors alone. The comments of Howard Aldrich and Hans Pennings on an earlier version of the article are appreciated.

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