| Inter-organization relationships enable cooperation between companies by complementing a resource shortage, or creating an opportunity for knowledge transfer, or satisfying strategic objectives such as entering new markets or sharing the risks of developing new technologies. Despite these benefits, many fall short of meeting their partners' expectations with alarming failure rates in excess of 50%. This work studies the creation dynamics of 613 relationships between a large conglomerate and other small firms across seven business units between 1998 and 2002.; This work proposes a change framework that encompasses resource dependence theory and social networks theory to predict the success of inter-organization relationships. The uniqueness of this study comes from its focus on inter-organization relationships created between asymmetrical large and small partners that differ in size, resources, finances, expertise, and the benefits that each aim to realize through the relationship. The study is a test of post-relationship formation dynamics regarding what kind of relationships (as operationalized by partner characteristics and partnership characteristics and their interaction) lead to beneficial outcomes for the large organization as manifested by its stock price change and stock stability and for the small firm as manifested by its survivability. The careful selection of these characteristics for these asymmetrical organizations offer a unique opportunity to increase the likelihood of success while resulting in further advances to the field of organization development, management and organization theory.; The results support the authors' hypotheses that in asymmetrical relationships, partners' and partnership characteristics that proved to benefit the large partner when it comes to this partner's intended outcomes are antithetical to what benefits the smaller partner when it comes to this partner's intended outcomes. While large firms can increase their stock valuation by building secret, informal, longer time to build, and technology oriented relationships, small firms can increase their survivability if they are highly mature, financially stable and engage in building open, shorter time to build, and operational oriented relationships. |
