Week 2 Discussion

Organizational Relationships

In our global, competitive environment, no company can afford to adopt a singular isolationist attitude. The complex global landscape widens competition. It expands technologies. It increases regulations. Any organization today that isolates itself from joining forces is risking annihilation. Automobile manufacturers have been cooperating with each other for years and have set the tone for how cooperating with your competitor is a win-win deal.

The business environment once thought of as “distinct entities working secretly and independently to beat the competition” no longer works today. The competitive landscape is changing where competitors rely upon one another in order to compete. As oxymoronic as that sound, it is true. Organizations are choosing to (or are being forced to) cooperate with one another. Not only are organizations coevolving with one another but governments and nonpro�ts are also working with one another to resolve problems. For example, cybersecurity threatens everyone and joining forces across industries to �ght cybercrimes makes good sense.

Cooperating with Competitors Review each example to learn more.

Traditional competition is speeding to a cooperative strategy because no organization today can operate solo and survive. No industry and no �rm is immune from the risks of isolating itself from this strategy. Organizations are working in new and innovative ways—expanding their cooperative strategy and dependence upon each other and upon noncompetitive entities such as suppliers, including governments. To accomplish this, organizations are utilizing the business tools of partnering, contracts, agreements, joint ventures, and mergers and acquisitions. If an organization �ghts the cooperative strategy today, it might �nd itself forced to cooperate through painful measures.

The largest car manufacturer Toyota has been offering its engine and transmissions to its competitors as a part of its global growth strategy. Toyota understands that joining with its competition helps everyone grow stronger while weeding out the weaker competitors.

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Additional Materials

From your course textbook Organization Theory and Design, read the following chapter:

Interorganizational Relationships