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Research On Value-creating Mechanism Of Inter-organization

Posted on:2009-02-23Degree:DoctorType:Dissertation
Country:ChinaCandidate:X M PanFull Text:PDF
GTID:1229330377454990Subject:Business management
Abstract/Summary:PDF Full Text Request
The age of knowledge-based economy urges the innovation of organizational structure and its managing mode, In order to adapt to the future competition, the original strict-layer organizational model needs to be changed for rebuilding the concept of organization and the boundary and operational mechanism. Under this condition, a new organizational structure that exists between market and bureaucracy has emerged, which becomes the hot topic of organizational theory researches.Value-creation issue has always been the important point in the fields of economics and management research. Most of researches in economics are concerned about labor value and marginal utility theory of value, Theory of Labor Division is considered as the source of value creation in the Wealth of Nations written by Adam Smith, the following theory of Smith-Young Theorem indicates that the increasing return in the rise of economy does not originate from Economics of Scale, but from division of labor and specialized economy. In fact, with the development of communication skills and Property Rights system, division of labor is not only happened inside the enterprises, but among small and more specialized companies. On the other hand, the early researches of value creation in management mainly focused on issues inside organization which investigated the resource and capacity allocation, the knowledge sharing of different department in an organization, and customer value creation through optimizing business processes inside organization. But with more intense competition, to be successful in the fierce competition for an individual firm becomes more difficult. So nowadays, the focal point of current research shifts to the value creation through coordination among different firms, that is to say, the value creation of inter-organizations such as strategic alliance and network organization becomes more important in the current research.The main contents and viewpoint of this paper are as follows: Part one reviews the literatures of Inter-organizations and value creation system.This paper first analyzes the limitation of dichotomy theory of enterprise and market, and comes to the conclusion that resource allocation mechanism between market and enterprises is needed, which is inter-organization, this inter-organization is used to explain the multi-system arrangement and organization forms. Actually, inter-organization is dynamic alliance and network framework which formed by many firms, the essential is cooperation among organizations. The newly developed forms such as enterprises cluster, strategic alliance, virtual enterprise and network organization all belong to inter-organizations.There are two systems in the research of value creation in economics which are theories of labor value and utility value. The main viewpoint of labor division theory of Adam Smith which is promoting the increase of economy through division goes by the name of Smith theorem. The famous American economist Allyn Young developed Smith theorem into Young theorem, this theorem thought the division of labor was mainly represented as devious economic ability, labor division relied on the limitation of market boundary and at the same time, limitation of market boundary also depended on labor division. Smith-Young Theorem indicates that the increasing return in the rise of economy does not originate from Economics of Scale, but from division of labor and specialized economy. Because division inevitably leads to cooperation, so it is necessary to investigate the value creation mechanism among inter-organizations.Part two explains in detail dimensions of inter-organization’s value creation.In this part, we think two dimensions exist in inter-organization value creation which are structural and relevancy dimensions. Structural dimension describes the interior characteristics of value creation in inter-organizations. This dimension includes the following three parts:the first part is resource, because of the heterogeneity of resource and because resource is the basis to take organizational activities. In order to maximize the common interest, it is necessary to integrate all recourses. Second is ability. Differences in ability between organizations have become the key point to integrate value creation of inter-organizations; third is knowledge, the inadequate and complementarily of knowledge has lead the division and collaboration of knowledge becoming the focal point among organizations.Relevant dimension describes the relationship between organization and external environment. It includes social-network relationship, organization ecosystem. First, social-network relationship points out that because economic activities are embedded in social structure, it has some influence on economic activities, that is to say, the relationship among inter-organizations gives influence to the performance of coordination. Second, organization ecosystem consists of material suppliers, distributors, outsource firms, technology providers and other organizations which are relevant to organizational operating activity, this ecosystem largely influences the ability of organization to create value and obtain competitive advantages.Part three mainly discusses resource and ability integrating mechanism of inter-organizations.Use the dynamic capability idea for reference, this paper thinks that there doesn’t have any company who can optimize all links in value chain, so the conventional value chain must be deconstructed. The deconstruction of value chain separates supply, production and sale, just selects the links that relevant to organization competitive advantage, left other links that they are not good at to the best-fit collaborator or obtain this activity through business in market. Based on this idea, this paper proposes the following two methods to restructure value chain: The first is to change the analysis approach. The tradition analyses of value chain begin with analyzing the asset and core ability of organization, and then shift to the analysis of input elements, production, distribution channel and then customers. New analyses should begin with the demand of customers, and then consider how to satisfy customers, how to organize production, select distribution channel and so on, and at last rigid characters of asset and core capability needed, something noticeable is that the allocation of resources and capability should not be limited inside the organization. The second method is to change the management focal point of value chain. The intense competition leads to higher requirement of organization capability, so under this condition companies are hard to optimize all links in the whole value chain. Within this problem, the management of supply chain extends from internal to external value chain which obtains competitive advantage through the coordination with other enterprises. In fact, the process of value chain deconstruction is indeed the process of modularization of value chain’s node. After the value modularization by the deconstruction of value chain, coupling between modules becomes more and more important in order to guarantee the whole system’s efficiency.Part four studies knowledge transfer and innovation mechanism of inter-organizationsBased on the knowledge transfer theory, the paper has built analyzing framework of knowledge transfer which is knowledge searching, knowledge transfer and knowledge absorbing. The framework includes the following points: First, not all the organizations have intense desire for knowledge searching, the effectiveness and intension of knowledge searching just rests on the learning desire and market-orientation of an organization. Second, on one hand, the knowledge transfer among organizations needs to span the boundary of each firm, so the performance of knowledge transfer largely depends on the relationship among the partners; on the other hand, because costs are needed when transferring knowledge, so a motivation mechanism should be established in order to promote knowledge sharing. Third, the reorganization of knowledge transferring path is propitious to establish proper organization form. There not only exists flows of logistics and capital, but lots of information and knowledge flow that relevant to production technology in supply chain. So it is easier to transfer and share knowledge; in strategic alliances, the interact among organizations is in favor of establishing trust mechanism, so it can increase the ability of boundary penetration among enterprises, shift imitation from outside organization to inside, make studying and imitation more easier. Admirals of multinational companies need to transfer relevant technology and management knowledge to local supplier out of consideration for improving productivity effect, so it leads to transnational knowledge flow. Fourth, the final performance of knowledge transfer depends on the knowledge absorption ability of organization which is consanguineous relevant to learning input, knowledge basis and organization culture.Another topic that is consanguineous to knowledge transfer is cooperative innovation among organizations. This article holds the viewpoint that it increases the possibility of cooperative innovation by deepening in specialization. However, in the process of cooperative innovation, it often emerges the problems that are knowledge abusing and equity problem among collaboration organization which lead the cooperative innovation obstacles. In order to promote the cooperative innovation among organizations, more considerations should be given when selecting organization form, which include the matching between complexity of knowledge and integration among organizations, network centrality, the relationship between formal and informal mechanism, the justification of resource allocation, etc.Part five discusses the embedding relation and trust mechanism of inter-organization.Embedding relation and trust mechanism are important issues in social network theory research. According to Granovetter, the embedding relation is divided into relational embeddedness and structural embeddedness. This paper studies the influences that the two kinds of embedding relations have on the enterprise performance between inter-organizations. We have two main viewpoints:①Relational embeddedness can help transfer professional information, increase mutually beneficial behavior among organizations, promote investment towards special assets and enhance the adaptability in face of market change, but it is not beneficial to the expansion of cooperation scale;②Structural embeddedness can help gain external economy, reduce endogenetic transaction expense, and afford multi-embedding administering mechanism.Trust mechanism plays a key role in successful cooperation between inter-organizational member enterprises. This paper studies the role of trust mechanism in typical form of inter-organizations, which means strategic alliance. A strategic alliance always meets with two kinds of uncertainty, that is, the uncertainty about future unknowns and the uncertain reaction of organization members towards these unknowns. Because of the two uncertainties, mutual trust becomes the key factor for successful strategic alliance. Mutual trust can reduce the complexity and uncertainty within an alliance more quickly and economically than using such means as forecast, authority and negotiation. It can also help the alliance members cooperate with each other, improve the administration of alliance conflicts, share knowledge and study mutually among alliance members, and promote company innovation. Part six studies the ecosystem and synergy mechanism of inter-organization.Considering co-operation based on division of labor and the need of further exploiting potential profit, a corporation should employ right organization form, which is easy for people to communicate with each other, so that the corporation can fit the needs of knowledge share, information transfer and technical diffusion. Supply chain makes for knowledge transfer among organizations, which affords a single corporation more chance of survival and development. However, with the increase of supply chain nodes, it’s difficult for traditional simple supply chain to meet the need of value creation. Therefore, through some improvement measure such as reengineering and synchronization, the traditional supply chain inclines to extend, that is to say, the form of supply chain is not limited to be linear any more, but become a value-net, which is so called organizational ecosystem.On the other hand, industrial organization theory starts to introduce co-evolution thought to explain the mutual promotion between corporations and environment. Through analysis about co-evolution mechanism, this paper gives some suggestions about how to realize the synergy effect among member corporations of inter-organization:①Inter-organizational information system is useful to support or realize two or more organization activities, so the synergy among member corporations is based on the premise that inter-organizational information system is set up.②There are many problems in supply chain, such as the contradiction among entity interests, the universality that the information is difficult to share, the uncertainty in supply chain, and so on. However, supply chain synergy can help improve the competitiveness of the whole supply chain value network. Therefore, supply chain synergy is the keystone of organization synergy.③Inter-organizational cooperation usually involved many enterprises of various aspects in the value chain, their resources need centralized dispatcher, and shared resources need inter-organizational processes to realize seamless operation. Many corporations are highly effective as a result of internal process optimization, but they can’t do well in shared process. Therefore, inter-organizational synergy is a difficulty of organization synergy.Part seven performs an empirical study——Lifeng Corporation of HongKongThorough the analysis about the development history of Lifeng, this part validates the approach with which organizations carry out value creation:value chain deconstruction and the integration of resources and capacity, the construction of symbiosis and the emergence of value network.Main innovation of the dissertation were placed in follows:First, this paper definitely puts forward structural dimension and relevant dimension in inter-organizational value creation. Structural dimension describes the internal character of inter-organizational value creation, which is not only the foundation of value creation of single organization, but also the base for inter-organizational member enterprises to create value together. Relevant dimension describes the relationship among the organizations, external environments and other enterprises, which tells the difference between inter-organizational value creation and single organization, it’s also the main content of inter-organizational value creation mechanism.Second, this paper studies the resource and capacity integration mechanism of inter-organizational value creation and suggests value chain reconstruction based on capacity elements. Traditional value chain deconstruction can lead to the change of enterprise value creation, delamination of value chain, value chain reconstruction based on core ability, and modularization of value chain node.Third, the paper has built analyzing framework of inter-organization of knowledge transfer which is knowledge searching, knowledge transfer and knowledge absorbing. The effectiveness of knowledge searching rests on the learning desire and market-orientation of an organization, the relationship of organizations and motivation mechanism are the main factors that influence knowledge transfer. Supply chain, multinational and strategic alliance are the main path for knowledge transfer, and knowledge absorption is the ultimate expression of value creation.Last, but by no means the least, on the bases of related theory of economics, management and sociology, this paper studies the influence that embedding relation have on organizational cooperation performance. We think that relational embeddedness can help organization to transfer professional information, increase mutually beneficial behavior among organizations, promote investment towards special assets and enhance the adaptability in face of market change, but it is not good for the expansion of cooperation scale. Structural embeddedness can bring external economy, make the relationship between corporations transfer to social, time after time trust game from individual, one-off trust game, and reduce endogenetic transaction expense. Besides, structural embeddedness leads to effective management among organizations by producing the relationship of repeated enbeddedness.
Keywords/Search Tags:Inter-organization, Value-creation, Value Chain, Value Network, Knowledge Transfer, Cooperative Innovation, Embedding Relation, Trust, Ecosystem, Synergy Effect
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