Academic journal article Advances in Management

Case Study: Co-Operation, Coordination and Specific Assets in Inter-Organizational Relationships in Hong Kong's Engineering Firms

Academic journal article Advances in Management

Case Study: Co-Operation, Coordination and Specific Assets in Inter-Organizational Relationships in Hong Kong's Engineering Firms

Article excerpt

Introduction

In recent years, the concept of globalization becomes more and more common among different countries because of a great benefit to their countries. Therefore, improvement and further development of the economics of their own countries are needed to fit in the basic conditions of globalization. The ultimate target of each organization is to gain the maximum profit undoubtedly by working together with other organizations. Besides, this method may be the most effective way to help the organizations to grow.

The relationships between the companies or organizations are improved and intensified. But this idea of "working together" often confuses the management level of the organization because they often think that other companies would only be competitors and ignore the importance of "working together".

Alderson1 pointed out the importance and the power of the organizations to work together. Alderson also voiced the need for a rather comprehensive theory in this area to fit the development of those competitive theories because of an increasing number in the elimination of organizations which are only operated by them only but seldom cooperate with other competitors as their partners1. There is also an increasing number of examples about organizations working together in the same business environment and getting a great success in the market. Those organizations are willing to share their strength with their partners to create a brand new product which can gain a great market share. Moreover, this action helps those organizations open up a totally new development direction. This may also be able to benefit some small organizations to use this chance to confirm their marketing positioning and the target customers.

There are more and more researches which are mainly focus on the aspect of how can the organizations working together. And such researches include the models of how the organizations working together and also some of the empirical studies for example, the channel behavior of the organizations, relational exchange and also the transaction cost economics. Based on those researches, they show that there are three marketing constructs which are associated with the organizations working together. They are cooperation, coordination and also the specific assets. The objective of this study is to fill this gap and identify the correlations between these three constructs and other related factors in engineering companies in Hong Kong. The research question is "what is the correlation between factors affecting the inter-relationship relationship in Hong Kong's engineering firms?'

Review of Literature

Precursors of Co-operation, Coordination, and Specific Assets: The basis of this research is the Key Mediating Variable (KMV) model because it is the most comprehensive inter-organizational models in the literature. And just like the KMV model, this research included the key variables of "Trust" and also the "Commitment" as the precursors to the inter-organizational joint activities. But for this study, there one more precursor variable is added and the variable is "Communication". In addition, for the KMV model, it only includes one construct described and measured as the specific joint activities between organizations and it is "Co-operation". In contrast, this study includes three constructs which are related to working with other organizations and they are "Cooperation", "Coordination" and finally the "Specific Assets".

Trust: For the factor "Trust", it would be considered as the expectation that another business can be relied on so as to fulfill the obligations and will act and negotiate fairly when the possibility for opportunism is present42. Geyskens and Steenkamp17 suggest that trust would properly reduce the uncertainty in a relationship. In the light of this, if an organization trusts another partner organization, it will certainly attribute co-operative intentions to the trusted organization. …

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