Interorganisational Strategies

Managing Symbiotic and Competitive Interdepencies

Arunkumar Naik – F09072
Rowena D’Souza –F09107
Resource Dependency
Theory

• Minimizing dependence of
organisation on other organisations
for resources and finding ways of
influencing them to make resources
available
 Strategies for Managing Resource
Dependencies
• Symbiotic interdependencies:
interdependencies that exist between an
organization and its suppliers and distributors
• Competitive interdependencies:
interdependencies that exist among
organizations that compete for scarce inputs
and outputs
Strategies for Managing Symbiotic
Resource Interdependencies
Good Reputation: Organization is held in high
regard and trusted by other parties because
of its fair and honest business practices
Example: TATA Group
• Largest private corporate group in India
• 2009 annual survey by the Reputation
Institute ranked Tata Group as the 11th most
reputable company in the world.
• The survey included 600 global companies.
 Strategies for Managing Symbiotic
Resource Interdependencies (cont.)

Co-optation: Managing symbiotic interdependencies by neutralizing

problematic forces in the specific environment

Example: Shell India publicises its use of technology and innovation

to fight global warming by investigating renewable energy
resources such as wind

Interlocking directorate: a linkage that results when a director from

one company sits on the board of another company

Example: Anand Mahindra (MD, Mahindra & Mahindra) sits on the

board of Air India as Exec. Director
 Strategies for Managing Symbiotic
Resource Interdependencies (cont.)

Strategic alliances: an agreement that commits two or

more companies to share their resources to develop
joint new business opportunities

Types: Long term contracts, joint ventures, minority

ownersip, M&A

Example: Private sector insurer Aviva Life Insurance

has entered into a nation-wide strategic alliance
with India Post,
• Insurance firm to gather its premium of policies
through post offices.
 Strategies for Managing Symbiotic
Resource Interdependencies (cont.)

Merger and takeover: results in resource exchanges

taking place within one organization rather than
between organizations

Example: Merger of Centurion Bank and Bank of Punjab

- Centurion Bank of Punjab.
• Worth $82.1 million (Rs. 3.6 billion in Indian
currency)
• 235 branches in different regions of India.
 Strategies for Managing Competitive
Resource Interdependencies
Collusion and cartels

Collusion: a secret agreement among competitors to share

information for a deceitful or illegal purpose

Cartel: an association of firms that explicitly agrees to coordinate

their activities

Example: In India – Cement Cartel comprising ACC, Binani

Industries, Birla Corporation, Dalmia Cement, Grasim
Industries, Gujarat Ambuja, J K Cement, Indian Cement
Ltd, NCL Industries, Saurastra Cement, Ultratech and Zuari
Cement.
MRTP Commission issued notices to them for exorbitantly
hiking prices
 Strategies for Managing Competitive Resource
Interdependencies (cont.)

Third-party linkage mechanism: a regulatory body that

allows organizations to share information and
regulate the way they compete

Example: TRAI: The Telecom Regulatory Authority of

India (established 1997) is the independent
regulator established by the Government of India to
regulate the telecommunications business in India
 Strategies for Managing Competitive
Resource Interdependencies (cont.)
Strategic alliances: Can be used to manage both
symbiotic and competitive interdependencies

Example: NTT DOCOMO, INC (DOCOMO), Tata Teleservices

Limited (TTSL) and Tata Sons Limited, the prime promoter for
Tata companies including TTSL, recently announced their
agreement on a strategic alliance in India, under which
DOCOMO will acquire 26 per cent of TTSL’s stock for
approximately Rs 13,070 crore (US $2.7 billion).

Merger and takeover: The ultimate method for managing

problematic interdependencies

Example: India Cements hostile takeover of Raasi Cements

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