Sunday, July 1, 2012

Ending Relationships – Practitioner Article – Inter-Organizational Studies

The Process of Ending Inter-Organizational Cooperation by Annika Tidstrom and Sara Ahman

This article expresses some interesting opinions and theories. The article focuses on the process of ending inter-organizational relationships. The authors state that this is a topic that is not discussed much due to the usually negative nature of ending a business relationship. Usually people do not want to share their unfortunate experiences so most managers choose not to write about them. The journal is just slightly older than three years, but I found it interesting enough and well written enough to take a hit on my grade.

Summary
The authors start out with defining their definition of “ending”. Because ending is a very generic term, a reader will get the basic idea of what is meant, but due to the complexity of ending a business relationship, many authors who write on this subject feel it is necessary to define the scope of what is meant by the term. In this journal, the authors define ending as, “implies that all resource ties and activity links between the participants are broken.”

As anyone could assume, there are countless reasons as to why a business relationship should end. Usually businesses enter a relationship to achieve some sort of benefit or to create “some kind of synergy”. A business relationship can be expected to end whenever the benefit is no longer being received. Now that is a very simplified explanation as to why relationships are created and ended. The authors state that there are two subgroups for reasons for an ending. One being a forced ending, where the reason is usually negative. Two being a natural ending, where the relationship ends after it has served its purpose.

The authors have cited many sources in the journal to researchers that have created models and written about the ending process. The authors cite works that describe the process of have two main phases, and subgroups, and more subgroups for each of both of the main phases. In a very simplified summary of the phases, it seems kind of similar to a twelve step alcoholism recovery program. Of course the process if much more complicated than that due to the nature of a business relationship, which sometimes consists of multiple businesses. Because of these complexities, even the process models can vary greatly from what actually happens in reality, no ending is the same as another. The authors include a very nice illustration of a business relationship process at the end of the journal.

Implications
The authors state that it should be known that even in a healthy business relationship, the end is almost always inevitable. When undergoing the process of creating a business relationship, all sides of the arrangement should identify factors that may result in an ending. Also, managers should develop strategies for a potential ending while developing their agreement. Basically the every aspect and potential event should be thought of and agreed upon how to handle it. It is also important that managers have their own exit strategies due to potential complications that were not foreseen in an ending.

Work Cited
Tidstrom, Annika, and Sara Ahman. "The Process of Ending Inter-Organizational Cooperation." Journal of Business & Industrial Marketing 21.5 (2006): 281-90. Emerald. Emerald Group Publishing Limited, 2006. Web. 01 July 2012. http://libproxy.uhcl.edu:2159/journals.htm?issn=0885-8624&volume=21&issue=5&articleid=1567359&show=html.

4 comments:

  1. This may seem a bit simplistic, but this is my view of endings in inter-organizational relationships. I think an inter-organizational relationship is like a marriage. Each business goes into the relationship with high hopes of improved value and competitive edge that mutually benefits each partner. Just as in a marriage, each partner must have the same goals and strategies for reaching those goals as well as the desire to work together to achieve them. Trust is a huge element in the relationship, just as it is in a marriage. However, many factors can erode the trust in a business relationship or can harm it in other ways, and when that trust is no longer there, a relationship suffers, just as in a marriage. Exit strategies in a business relationship are sort of like pre-nuptial agreements that people sign before the wedding.They need to be decided upon and put in place during the strategic planning stages. In the event of the ending of the relationship, each firm knows what will be taken from the experience and what will have to be given up and which strategies will be used to dissolve the relationship.

    I think it is to the companies' benefits to have everything set in a plan for every contingency if the relationship has to be terminated in the future. Then there are no surprises or hard feelings if and when it does happen, and all the legal issues will be easier to deal with.

    Good article and good blog!!

    ReplyDelete
  2. That’s funny Ehric; when I was reading this article I was thinking about pre-nuptial agreements in a marriage. Hearing about different divorces and the legal battles, I’ve thought that marriages are treated a lot like business relationships. Really I think pre-nuptial agreements themselves are good signs of that.

    I like the implications that you stated Travis. I agree completely. As any other relationship, people or parties can become devious when it ends.

    ReplyDelete
  3. I like the marriage analogy as well Ehric, I didn't really think of it in that way, but it makes complete sense. Travis, I really like how you ended your article by saying that businesses should have an exit strategy in place when entering an alliance of some sort. This is so often overlooked when companies begin a partnership, because the ending of the partnership seems so far away and unheard of at the time. I also think that coordination of goals and expectations is crucial, but I'm it almost sounded like you were explaining a contract (pre-nuptial agreement in the comments as well). In some of the previous blogs we have mentioned how lengthy, wordy contracts can hurt business partnerships by deteriorating trust. However, while reading those articles and blogs, I, like the businesses addressed in this article, had not thought about the end of the business relationship. Great blog.

    ReplyDelete
  4. I couldn't agree more with all your comments! A big, lengthy, bullet proof contracts may seem like there is distrust in the relationship. But a contract should be looked at like reasurnace to the other company to signal to your partner that there is nothing to fear.

    ReplyDelete