Why collaborate

“no single agency or individual possesses all of the information, skills, or resources needed to manage large-scale threats alone”

(Sylves & Comfort, 2012, p. 78)

The Corporation is a creation of society, a legal mechanism for pooling capital to allow us to accomplish tasks that individuals alone cannot do. In effect, it is the original legal mechanism for collaboration. Collaboration between organisations is no different; it can be thought of as a mechanism for pooling capital (of any form) to allow us to accomplish tasks that individual organisations alone cannot do.

The field of organisational strategy is concerned primarily with “explaining differential firm performance” (Dyer & Singh, 1998, p. 660). This is fundamentally what studies of business recovery from disaster also seek to explain – why it is that some organisations fail, some survive and some thrive post-disaster. There are traditionally two fundamental approaches to explaining differential performance. Firstly the industry view which believes the structural characteristics of an industry and firms strategic choices related to them are key factors and where strategy formulation is about looking at external opportunities and threats. Secondly the Resource Based View which argues that good strategy formulation involves looking internally at what resources an organisation has and what you can do best with them before considering the external environment (Barney & Hesterley, 2008; Dyer

& Singh, 1998; Hill et al., 2007; Peng, 2009). Peng (2009) also suggests a third view or perspective, the institutional, which argues that along with the external environment and the internal resources, organisations need to also consider the influences of the formal and informal rules of the game that exist in their environment. While this view was focused on examining largely nation state differences it may also be applicable in considering the context that exists post-disaster – for example, did a norm or informal rule exist that companies would share resources to get through the immediate post disaster period? In practice, it is suggested that each of these perspectives is needed to provide a full account of differential firm performance (Peng, 2009).

The Resource Based View of the firm sees competitive advantage as stemming from an organisations control of resources that are in some way superior to those of their competitors (Barney, 1991). While the original development of the concept focused primarily on things within the boundaries of the firm itself, many authors (Barney, 1991; A. Cameron & Street, 2007; Hoffmann & Schlosser, 2001;

Nahapiet & Ghoshal, 1998) suggest that the potential benefits brought by external relationships can be considered as part of these resources. Hence, collaboration is entered into because it generates some

34 kind of superior resource or capability than that of its competitors. However to be valuable the relationships must still fit the Value, Rarity, Imitability and Organisation (VRIO) criteria – see Table 4.

Table 4 - VRIO Criteria to assess relationship value potential – Source: Adapted from (Barney & Hesterley, 2008)

This framework helps to illustrate why successful collaboration is difficult – the relational skills required to make collaboration work are rare; most particularly in a culture where individuality and competition are predominant, relational skills are not easily imitated and firms organised around common principles of closely holding information may not be well placed to actually benefit from any relationships. The specific leadership skills required to enable successful collaboration may differ from the skills required to lead in traditional hierarchical organisations (R. Morse, 2008).

Peng (2009) suggests that the reasons for collaborating all fit within these existing views of strategy as per Figure 4.

•Does the relationship enable (or potentially enable) an organisation to exploit an opportunity or counter a threat?

Value

•Does everybody have it?

Rarity

•Is it easy for another organsiation to obtain or develop (either the relationship or the benefits the relationships confers)?

Imitability

•Is the firm organised to actually be able to get the benefits from the relationship?

Organisation

35 Figure 4 – Why collaborate?

Sources: (Adobor, 2006; Battisti & Peter, 2011; Dacin, Oliver, & Roy, 2007; Fjeldstad, Snow, Miles,

& Lettl, 2012; Hardy et al., 2003; Peng, 2009; Waite & Williams, 2009; Woodland & Hutton, 2012)

A further two explanations are offered that do not fit within the strategy viewpoints but come more from a political perspective. These are to acquire power or control over other members (Hardy et al., 2003) and to enable the sharing of power and responsibility (Bryson et al., 2006)

Dyer & Singh (1998) simplify this by suggesting that there are four ways that alliances or collaborations can create a competitive advantage. Firstly, by investments in assets specific to the relationship allowing for the combining of resources to obtain some kind of specialised asset that generates greater value for the firms. Secondly, through significant exchange of knowledge between the partners to result in joint learning that enables either process or product to be in some way superior to competitors. Hardy et al (2003), differentiate this aspect stating that there can be both

• To reduce rivalry (because rivalry reduces profits)

• To enable scaling of high entry barriers

• To reduce the bargaining power of suppliers

• To reduce the bargaining power of consumers

• To materialise the commerical potential of possible substitute products Industry Based View

• Create value

• Reduce costs, risks and uncertainties

• To tap into complementary assets or resources

• To facilitate opportunities to learn from partners

• To cultivate innovation

• To gain an insider view of a potential acquisition

• To grab a partner with desirable attributes before anyone else does

• To over come the impediment of smallness

• To overcome the liability of foreignness Resource Based View

• Because everyone else is doing it

• To acquire legitimacy Institutional View

36 knowledge transfer effects between partners and also knowledge creation as a result of the interactions between partners. Thirdly, through the combining of scarce resources or capabilities that are complementary, and that allow the partnership to create unique products or processes. Lastly, the potential for lower transaction costs due to efficient and effective governance mechanisms.

In relation to not for profits and governmental organisations, it is argued that the value of collaboration is in providing solutions to problems that seemed otherwise unsolvable (Donahue, 2004;

Trist, 1983). Disasters seem to have much in common with the ‘mess’ described by Ackoff (B. Gray, 1985) and ‘messes’ require responses that are inter and multi organisational. Bryson, et al., (2006) continue this theme in suggesting that complex modern problems require not just collaboration between organisations within a sector but collaborations across all sectors; businesses, non-profits, government, communities and the entire public. They also suggest that resistance to collaboration is such that this will only occur when prior efforts to solve the problem have failed and it becomes apparent that an organisation cannot get what it wants without doing so. Much of the literature (Hoffmann & Schlosser, 2001; Innes & Booher, 1999; Meyer et al., 1990) suggests that collaboration is more likely to occur in dynamic, turbulent environments. However, countering the usefulness of collaboration in the post disaster environment is the idea that both forming and maximising the benefits of alliances takes time (Hoffmann & Schlosser, 2001).

While it seems clear that the potential reasons to, and advantages of, entering into a collaboration apply equally to small or large organisations, studies show that “SMEs” propensity to co-operate is significantly less than that of large companies” (Hoffmann & Schlosser, 2001, p. 358). In the New Zealand context, Battisti & Peter (2011) report that, based on a Statistics New Zealand Innovation Survey, collaborative arrangements are quite rare. These authors identify three specific barriers to collaboration in a study of New Zealand SME’s. These were owner/managers perceptions that collaboration involves high risk, the wish to maintain independence and a lack of knowledge about who might be suitable collaborators. The potential benefits of collaboration are recognised by the Economic Development Agency of New Zealand (EDANZ) which is the linking organisation for all of New Zealand’s regional economic development agencies with particular reference made to its potential to overcome the “tyrannies of size and distance” (Economic Development Agencies of New Zealand, 2010, p. 14). The Canterbury Employers Chamber of Commerce (CECC) has recognised the potential benefits of collaboration, particularly with regard to the resourcing of rebuilding, and launched a new website in 2012 aimed at providing assistance to organisations in identifying potential partners along with information regarding the legal and process aspects (Cimino, 2012).

Innes & Booher (1999) introduce a longitudinal viewpoint on collaboration suggesting that there are first, second and third order effects. First order effects are those immediately tangible direct results of

37 the collaboration. Second order effects may occur long after the commencement of collaboration and may be on or outside the boundaries of that specific collaboration. Second order effects may include other new partnerships or joint actions, changes in practice and changes in perceptions. Third order effects may occur significantly later than first and second and relate to changes in behaviours, norms or patterns of behaviour or patterns of organisation. This longitudinal view adds yet another complicating dimension to the issue of how the success or failure of collaboration is judged – solely on its achievement of stated short term aims, its longevity, or with some kind of view as to any attitudinal, behavioural or structural changes that it may have led to (Hoffmann & Schlosser, 2001)?