# Theoretical Models to Classify the Type of Interorganizational Networks in Productive Systems

Marcelo T. Okano, Oduvaldo Vendrametto, Marcelo Eloy Fernandes, Osmildo Santos, Marcos Oliveira

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Marcelo T. Okano, Oduvaldo Vendrametto, Marcelo Eloy Fernandes, Osmildo Santos, Marcos Oliveira. Theoretical Models to Classify the Type of Interorganizational Networks in Productive Systems. IFIP International Conference on Advances in Production Management Systems (APMS), Sep 2016, Iguassu Falls, Brazil. pp.520-527, 10.1007/978-3-319-51133-7_62. hal-01615732

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Distributed under a Creative Commons Attribution 4.0 International License
Theoretical Models to Classify the Type of
Interorganizational Networks in Productive
Systems

Marcelo T. Okano¹, Oduvaldo Vendrametto², Marcelo Eloy Fernandes³,
Osmildo S. Dos Santos⁴, and Marcos Antonio Maia de Oliveira⁵

¹ CPS/EAESP-FGV, São Paulo, Brazil
marcelo.okano@fatec.sp.gov.br

² Paulista University/Uninove,São Paulo, Brazil

³ Fatec Barueri/Uninove,São Paulo, Brazil

⁴ Universidade Potiguar,São Paulo, Brazil

⁵ Fatec Guarulhos,São Paulo, Brazil

**Abstract.** The purpose of this article is to research the theoretical models to analyze Interorganizational systems and networks in a production chain. To achieve the objective of this study a bibliographic research was conducted to study and selection of indicators of theoretical models found. With the defined indicators was conducted a pilot with five large companies that provide for industrial manufacturers to test and evaluate the research process. In this pilot had the chance to prove the search results to the theory, the chosen production system was the automotive industry and their first-tier suppliers. It is a chain known and established for over 30 years. The IOS type can be classified sequential interdependence, the pattern of use is the exploitation, the type of network is a cluster and the main goal is to improve operational efficiency.

**Keywords:** IOS · Indicators · Productive systems

# 1 Introduction

Businesses increasingly are allying other companies to obtain some kind of value in the production chain, be it financial, social, and productive or any other value. These types of partnerships are becoming common in various areas, creating a network level, the great difficulty we have today is how to classify them and verify the benefits of these associations.

According to Mariano et al. [1], collaborative interorganizational networks have become increasingly common; the companies have continuously realized the competitive advantages gained by establishing alliances. Thus, it is important to note that a network can be defined as a set of nodes that bind each other and a collaborative network level can be defined as a set of three or more organizations that are united by means of an alliance in around some purpose
Several authors define what an Interorganizational System. From simple shapes to more elaborate, the IOS feature essential characteristics, both technological and organizational [2]. The use of IOS differs from a traditional information system, as it involves communication networks that push the boundaries of companies.

The purpose of this article is to research the theoretical models to analyze Interorganizational systems and networks in a production chain and apply them in one productive system.

# 2 Literature Review

## 2.1 Interorganizational Networks

According to Puffal and Puffal [3], “consider based on research conducted on the evolution of interorganizational networks studies field that the past 30 years the interest on interorganizational networks has grown significantly, and produced several studies and publications on the subject and the theme networks interorganizational is a fragmented field, multidisciplinary and his studies being conducted from various theories, from various points of view it is necessary to periodically analyze this field of study and to identify the most discussed topics and the light which theories it is being analyzed”.

According to Pereira [4], “both in practical and theoretical context, the issue of interorganizational relationships is applied to a wide variety of relationships between organizations, for example, joint ventures, strategic alliances, clusters, franchising, supply chains, groups export, interorganizational networks, among others”. Interorganizational networks are important in economic life, because facilitate the complex transactional and cooperative interdependence between organizations. Its importance is recognized from the point of theoretical saw, because it can be, and indeed are studied from different theoretical approaches. Thus, studies on networks provide a valuable basis of common interests and potential dialogue between the various branches of social science [5].

According to Baum and Ingram [6], “interorganizational networks can be divided into two classes’ analysis: horizontal and vertical networks”. The “vertical networks” involve the coordination of activities of suppliers and distributors by a coordinating company, exerting considerable influence on the actions of other actors in the production chain. The “horizontal networks” through similar organizations that combine their activities to achieve collective goals. Figure 1 reflects the main divisions of studies on interorganizational networks [4].

## 2.2 Interorganizational Systems

Several authors define what an Interorganizational System. From simple shapes to more elaborate, the IOS feature essential characteristics, both technological and organizational [2]. The use of IOS differs from a traditional information system, as it involves communication networks that push the boundaries of companies.
<figure><img src="image_2.png" /><figcaption>Fig. 1. Divisions of interorganizational networks. Source:[4].</figcaption></figure>

Cash and Konsynski [7] present a simple definition of Interorganizational System: "(...) an automated information system shared by two or more companies." Interorganizational systems are built using IT - computers and communication technology, to facilitate the creation, storage, processing and transmission of information. Johnston and Vitale [2] define the IOS:

"As systems, interorganizational systems allow the movement of information across organizational boundaries."

For Chi and Holsapple [9], in the broadest sense, an IOS consists of computer and communications infrastructure to manage the interdependence between companies. Companies need to manage carefully the interorganizational processes in order to access external resources, mitigate strategic uncertainties, and gain competitive advantage [10].

Recent studies have considered the supply chain management (SCM) of an inter ability digitally enabled and seen the IOS as modern systems typical supply chain management [11,12].

## 2.3 Type for IOS

Kumar and van Dissel [13] classify the IOS based on a typology of interorganizational interdependencies, highlighting the role of IOS in managing inter-firm dependency and force building trust, by reducing potential conflicts aimed at sustained cooperation. The types of interdependencies presented by the authors are:

- Interdependence of set (pooled) - companies share and use common character resources (e.g., the use of a common data center for a number of companies).

- Interdependence Sequential - refers to the situation where companies are connected by a chain, targeted and well-defined relationships where the outputs of a task processor turn into inputs to others (e.g., the customer-supplier relationship over a source current).
<table><caption>Fig. 2. Characteristics of the types of networks. Source: [8].</caption><thead><tr><th>Characteristics</th><th>Agglomerate</th><th>Cluster</th><th>Local Productive Arrangement</th><th>Social networks</th></tr></thead><tbody><tr><td>Types of actors involved</td><td>Private and public organizations.</td><td>Private and public organizations</td><td>Private, public, educational institutions, non-governmental organizations, associations, unions and the community in general.</td><td>Private, public, educational institutions, non-governmental organizations, associations, unions and the community in general</td></tr><tr><td>Form of actors</td><td>Organizations</td><td>Organizations</td><td>Organizations</td><td>Organizations and individuals.</td></tr><tr><td>Typology</td><td>Market</td><td>Market and communications</td><td>Market, communications and support</td><td>Support</td></tr><tr><td>Models</td><td>Vertical and horizontal</td><td>Vertical and horizontal</td><td>Vertical and horizontal</td><td>Horizontal</td></tr><tr><td>Organizations in a given geographical area</td><td>concentrated</td><td>concentrated</td><td>concentrated</td><td>concentrated</td></tr><tr><td>Types of organizations</td><td>Various sectors</td><td>A sector or activity</td><td>A sector or activity</td><td>One or more sectors or activities</td></tr><tr><td>Strategy level</td><td>organizational</td><td>Organizational</td><td>Among all the local agents</td><td>Among all the local agents</td></tr><tr><td>Actions</td><td>competitive</td><td>Competitive-cooperative</td><td>Competitive-cooperative</td><td>Cooperatives</td></tr><tr><td>Interaction Form</td><td>Formal and informal</td><td>Formal</td><td>Formal</td><td>Informal</td></tr><tr><td>Essential factors of strengthening</td><td>Geographical proximity, similarity of market and regional competences.</td><td>Geographical proximity, similarity of market, regional expertise and strong competition.</td><td>Close geographic, similar market, regional expertise, strong competition and social cooperation.</td><td>Trust, reputation and cooperation</td></tr><tr><td>Goal setting</td><td>Does not exist</td><td>Common goals between partners</td><td>Common objectives with all local actors</td><td>Common objectives with all local actors</td></tr><tr><td>Types of Goals</td><td>Economics</td><td>Economics</td><td>Economics and Socials</td><td>Economics and Socials</td></tr></tbody></table>

- Interdependence Reciprocal - describes a relationship in which each company outputs are transformed into inputs for other (for example, a team of concurrent engineering with the participation of customers, suppliers, distributors, etc.).

## 2.4 Usage Patterns of IOS

Figure 4 shows that according to the standard adopted by the company, for the use of IT, exploration or exploitation, are obtained as primary outcome, operational or strategic benefits and benefits as second order, competitive performance. Considering the relationship represented by the arrows, the research conducted by Subramani [14], confirmed not only the connection between operational benefits and performance competitive. Subramani [14] presents two types
<table><caption>Fig. 3. Characteristics of the types of networks. Source: [8].</caption><thead><tr><th>Type of Interdependence</th><th>Set of Interdependence</th><th>interdependence Sequential</th><th>Reciprocal interdependence</th></tr></thead><tbody><tr><th>Configuration</th><td></td><td></td><td></td></tr><tr><th>Coordinating Mechanisms</th><td>Standards & Rules</td><td>Standards, Rules, Schedules & Plans</td><td>Standards, Rules, Schedules, Plans & Mutual Adjustment</td></tr><tr><th>technologies</th><td>Mediator (mediating)</td><td>On along the chain (Long-linked)</td><td>Intensive (Intensive)</td></tr><tr><th>Structure</th><td>High</td><td>Average</td><td>Low</td></tr><tr><th>Potential for Conflict</th><td>Low</td><td>Medium</td><td>High</td></tr><tr><th>Type of IOS</th><td>IOS with Information Resources Together</td><td>IOS Value / supply-chain</td><td>IOS networks</td></tr></tbody></table>

<figure><img src="image_3.png" /><figcaption>Fig. 4. IT use, specific investments in relationships and Supplier Benefits. Source: [14].</figcaption></figure>

of specific intangible assets:

- Business Process Specificity - is the degree to which key business processes from a supplier, and operational processes (administrative and quality control) are particular to the requirement of the focal company in the relationship. The author believes that the business process of specificity is an important factor in performance linked to inter-firm relationship.

- Domain Specificity of knowledge - is the degree that the critical expertise of a supplier, such as the formulation of competitive analysis and strategy and the development of a new product are particular to the requirement of local firm in the relationship. Specificity of domain knowledge is seen in the examples of firms that rely on suppliers for innovation and critical decisions.

## 3 Research Methodology

To achieve the objective of this study a bibliographic research was conducted to study and selection of indicators of theoretical models found. With the de-
fined indicators was conducted a pilot with five large companies that provide for
industrial manufacturers to test and evaluate the research process.

To collect the information needed for the analysis, exploratory research, qualitative was used. Gil [15], the exploratory research aims to provide greater familiarity with the problem, in order to make it more explicit.

Zikmund [16] considers that exploratory studies are conducted to clarify am-
biguous issues; research is needed to better understand the dimensions of the
problems. The qualitative approach presents a reality that cannot be quanti-
fied or measured and involves subjective items of reality research. You can work
with data without specific statistical analysis, seeking the understanding of re-
ality [17].

4 Analyses of Results

The several visits and interviews in businesses say that interorganizational rela-
tionships are small and largely are limited between the leader of the network and
suppliers. These relationships refer only to trade relations. The only application
that companies use is EDI.

The characteristics of this network, according to Table 1 of the literature, lies
in Figure 5. The theoretical framework of verifies the existence of characteristics
of "cluster".

The IOS type can be classified sequential interdependence as the data an-
alyzed according to Kumar and van Dissel [13], refers to the situation where
companies are connected by a chain, directed relations and well defined, where
the outputs a task processor turn into inputs to others (e.g., the customer-
supplier relationship along a current source). These theoretical characteristics
could be confirmed in the surveyed companies, because the chain is used for
Value / sup-ply-chain.

This group is characterized as an organizational network and second inter
Balestrin and Vargs [5]. Interorganizational networks are increasingly important
in economic life, because facilitate the complex transactional and cooperative
interdependence between organizations.

Subramani [14] proposes a way to categorize EDI ownership patterns in or-
ganizations considering that there are two main standards: "Exploitation" or
"Exploration". We asked the managers of the companies about which standards
the company fits and how the pattern interferes with the company's plans. The
result was that 100% of the cases are categorized as exploitation, that is, the
goal is to improve operational efficiency.

The Alfa company manager commented: "The EDI is being used only for data
transfer, its implementation improved processes and streamlined procedures for
programming, deliveries and invoices. Once deployed, there are few changes in
EDI. Respondents were unanimous in considering that as benefits of the first
order have the operational benefits.
<table><caption>Fig. 5. Summary of responses.</caption><thead><tr><th rowspan="2"></th><th rowspan="2">Characteristics</th><th colspan="5">Companies</th></tr><tr><th>Alfa</th><th>Beta</th><th>Gama</th><th>Delta</th><th>Épsilon</th></tr></thead><tbody><tr><td rowspan="10">Networks</td><td>Types of actors involved</td><td>Private organization</td><td>Private organization</td><td>Private organization</td><td>Private organization</td><td>Private organization</td></tr><tr><td>Form of actors</td><td>organization</td><td>organization</td><td>organization</td><td>organization</td><td>organization</td></tr><tr><td>Typology</td><td>Market</td><td>Market</td><td>Market</td><td>Market</td><td>Market</td></tr><tr><td>Models</td><td>Vertical</td><td>Vertical</td><td>Vertical</td><td>Vertical</td><td>Vertical</td></tr><tr><td>Organizations in a given geographical area</td><td>concentrated</td><td>concentrated</td><td>concentrated</td><td>concentrated</td><td>concentrated</td></tr><tr><td>Types of organizations</td><td>Various sectors</td><td>Various sectors</td><td>Various sectors</td><td>Various sectors</td><td>Various sectors</td></tr><tr><td>Strategy level</td><td>organizational</td><td>organizational</td><td>organizational</td><td>organizational</td><td>organizational</td></tr><tr><td>Actions</td><td>competitive</td><td>competitive</td><td>competitive</td><td>competitive</td><td>competitive</td></tr><tr><td>Interaction Form</td><td>Formal</td><td>Formal</td><td>Formal</td><td>Formal</td><td>Formal</td></tr><tr><td>Essential factors of strengthening</td><td>Geographical proximity and regional competences</td><td>Geographical proximity</td><td>Geographical proximity, similarity of market and regional competences</td><td>Geographical proximity, similarity of market</td><td>Geographical proximity, similarity of market and regional competences</td></tr><tr><td>Goal setting</td><td>by automaker - Network leader</td><td>by automaker - Network leader</td><td>by automaker - Network leader</td><td>by automaker - Network leader</td><td>by automaker - Network leader</td></tr><tr><td>Types of Goals</td><td>Economics</td><td>Economics</td><td>Economics</td><td>Economics</td><td>Economics</td></tr><tr><td rowspan="10">IOS</td><td>Type of IOS</td><td>Alfa</td><td>Beta</td><td>Gama</td><td>Delta</td><td>Épsilon</td></tr><tr><td>Configuration</td><td>sequential</td><td>sequential</td><td>sequential</td><td>sequential</td><td>sequential</td></tr><tr><td>Coordinating Mechanisms</td><td>Standards, Rules, Schedules & Plans</td><td>Standards, Rules, Schedules & Plans</td><td>Standards, Rules, Schedules & Plans</td><td>Standards, Rules, Schedules & Plans</td><td>Standards, Rules, Schedules & Plans</td></tr><tr><td>technologies</td><td>On along the chain (Long-linked)</td><td>On along the chain (Long-linked)</td><td>On along the chain (Long-linked)</td><td>On along the chain (Long-linked)</td><td>On along the chain (Long-linked)</td></tr><tr><td>Structure</td><td>Average</td><td>Average</td><td>Average</td><td>Average</td><td>Average</td></tr><tr><td>Potential for Conflict</td><td>Average</td><td>low</td><td>Average</td><td>low</td><td>Average</td></tr><tr><td>Examples of Implementation and Application Technologies</td><td>EDI</td><td>EDI</td><td>EDI</td><td>EDI</td><td>EDI</td></tr><tr><td>Type of IOS</td><td>Value or Supply Chain</td><td>Value or Supply Chain</td><td>Value or Supply Chain</td><td>Value or Supply Chain</td><td>Value or Supply Chain</td></tr><tr><td>IOS standard</td><td>Alfa</td><td>Beta</td><td>Gama</td><td>Delta</td><td>Épsilon</td></tr><tr><td>Exploitation</td><td>x</td><td>x</td><td>x</td><td>x</td><td>x</td></tr><tr><td>Exploration</td><td></td><td></td><td></td><td></td><td></td></tr></tbody></table>

## 5 Conclusion

Theoretical models presented in the conceptual framework allowed to establish indicators to analyze the type of IOS, IOS use pattern and network Features to set the type. As secondary outcomes were able to identify the benefits, used standards and objectives.

In this pilot had the chance to prove the search results to the theory, the chosen production system was the automotive industry and their first-tier suppliers. It is a chain known and established for over 30 years. The IOS type can
be classified sequential interdependence, the pattern of use is the exploitation, the type of network is a cluster and the main goal is to improve operational efficiency.

These indicators should be tested with other production systems and more players to check their efficiency. As a future project, we can incorporate the analysis of social networks to verify the structural characteristics of the network as centrality, grouping etc.

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