Union (EU) represent a new level of international interdependence among neighboring states.

Although corporations, local agencies, military forces, and nations have long attempted to cooperate with or co-opt each other, it is only in the last two decades that relations between organizations have become recognized as a critical tactic for organizational survival, growth, and success in a hostile or challenging environment (Harrigan, 1985, 1986; Gomes-Casseres, 1988; Paré, 1994; Fligstein, 1990; Bleeke and Ernst, 1995).

At least three factors are contributing to this increase in partnerships, networks, consortia, and federations, in addition to mergers and acquisitions. First, businesses compete in a global context today, and the trend is not expected to abate. With this kind of competition—more challenging and rapidly changing—organizational leaders are seeing wisdom in joining forces. Second, there is greater competition for scarce resources today, so more and more are competing for less and less; sharing costs, risks, and scarce resources is making sense to many organizational leaders. Third, there is growing recognition that collaborative behavior, in contrast to competition and individualism, may often (but not always) be a better way to operate.

Today, firms, government agencies, and states are apt to be seen by both researchers and practitioners as involved in a complex web of organizational relations, formal and informal, intended and unintended, that can help or hinder their ambitions. With this awareness has come an explosion of research and conceptualization, if not theory, by social scientists and management scholars that has attempted to understand the forces that prompt organizations to connect with each other and the conditions under which interorganizational relations are likely to succeed or fail. Although at this point there is more theory than evidence, the data suggest that differences of situation, orientation, purpose, culture, and power can affect the outcome of an ostensibly good match.

In this chapter, we characterize the voluminous writings on interorganizational relations of all types. This body of work is large and growing but can be divided into two distinct literatures: (1) macro environmental studies of the political and competitive aspects of relations between and among organizations and (2) micro studies of the processes by which organized groups relate to each other and the factors that are likely to lead to a successful collaboration. We should point out that this chapter is based primarily on literature generated in the United States. There is an equally large and growing body of literature on interorganizational relations that is more international; see, for example, such recent sources as Gerybadze (1994), Kuman and Rosovsky (1992), and Yoshino and Rangan (1995).

The chapter begins with a characterization of the environmental research, including the history of the analysis of interorganizational relations,