Organizational Form - Hybrids

economics made by Douma and Schreuder (2008) is that this theory does not consider the importance of the role of culture and social relations. Trust is the foundation of most relationships built between human beings and if this is not present, it is not possible to comprehend how commercial relations can be formed or how people can cooperate within a firm. Furthermore, reputation is essentially important, as this factor is often the representation of a company and can hold a potential collaboration in the balance between success and failure.

The second point of criticism is with regard to Williamson’s assumption that “Markets and hierarchies should not be viewed as two mutually exclusive governance structures” (Douma

& Schreuder, 2008, p. 182). What is argued in this connection is the fact that a number of other organizational forms exist in terms of long-term relations between suppliers and buyers, differing forms of network organizations alongside joint ventures. These are termed intermediate or hybrid organizational forms and are placed in between markets and hierarchies (Douma & Schreuder, 2008). These hybrid forms could be in the shape of, for instance UMD collaborating with Bang & Olufsen on a joint project. In this connection the collaboration between artist and company fall into the category of being a hybrid and as Williamson argues, “they occur for intermediate levels of asset specificity” (Douma &

Schreuder, 2008, p. 182), which implies that the asset specificity being referred to is the project at hand between the two parties involved.

identity, is created and is pivotal, for the company to maintain in order to remain as strong as possible (Foreman & Whetten, 2002). When engaging in partnerships and/or collaborations many aspects must be considered, which is why it is important to grasp the very fundamentals of the organizational form. In a respect the hybrid organizational form is referred to as it is a combination of two or more sovereign companies pursuing common interests (Borys &

Jemison, 1989), in this case an artist and a company.

Borys and Jemison (1989) explain that traditional strategic management and organizational theory is limited to dealing with unitary organizations, which creates a certain difficulty with regard to dealing with hybrids as they are, as previously mentioned, organizational entities composed of two or more sovereign organizations. In connection with this, four concepts have been developed to characterize hybrids in order to understand the mechanisms generated by these:

• The breadth of hybrid purpose and the claims and plans that it legitimates

• The permeability of hybrid-partner boundaries and the resources and obligations allowed crossing them.

• The interdependence of partner operations in the value creation process and the complexity of the arrangements required managing it.

• The nature of the hybrid’s stability mechanism (Borys & Jemison, 1989)

An increasing complexity and variety of organizational forms is emerging and these represent strategic alliances between organizations such as research and development (R&D) partnerships, license agreements, acquisitions and joint ventures. Firms that are repositioning themselves within prevailing industrial frameworks as well as firms that have adapted to emerging opportunities by conducting strategic and operating moves are a result of the mentioned alliances being formed (Williamson, 2002). Borys and Jemison (1989) argue that hybrid alliances both present divergent management challenges as opposed to those encountered in conventional organizations as well as representing different manners in which to engage in strategic renewal and strengthen a firm’s capabilities. Exactly these outcomes are what are aimed at obtaining via collaborations between artists and companies, when drawing upon the advantages of so different entities and combining them in a greater whole.

However, challenges cannot be avoided when engaging in partnerships, which give rise to a thorough assessment of all possible implications that may arise when artists and companies

collaborate. As mentioned, four issues have to be considered in order to comprehend the entirety of hybrids and their mechanisms, more specifically the collaborations entered into between artists and companies. First, great importance lies in the selection of partners.

Williamson (2005) emphasizes the boundary between each partner and the hybrid is not only pivotal in this connection, however, also between the hybrid and its environment. Regarding the boundary between each partner and the hybrid, Borys and Jemison (1989) emphasize that

“Decisions must be made about how much of each partner’s resources can be legitimately claimed by the hybrid and to what extent each partner’s governance structure has legitimate power over the hybrid (p.238)”.

In the connection the importance of contracts formed between artists and companies can be examined in order to clarify what conditions apply when entering into collaborations and thereby forming a hybrid. This could for example include the rights over the artist’s music or a concept idea the company has created. Concerning the boundary between the hybrid and its environment “Hybrid partners have already acquired assets and have made commitments to a variety of external constituencies” (Borys & Jemison, 1989, p. 240). Both artists and companies have to decide if they wish to bring these commitments into the hybrid, which both can create opportunities for the collaboration or place constraints on it.

Second, a hybrid stands in great contrast to unitary organizations due to hybrids being composed of sovereign organizations. It is the sovereignty, which poses as a continuous threat to the progression and stability of the hybrid due to this continued existence more or less depending on the hybrid’s performance (Williamson, 1981). The creation of the hybrid implies that the performance of the newly formed ‘organization’ is equivalent to an already established one and it is expected more or less from the initiation of the collaboration. It is, however, extremely difficult due to “the mechanisms that provide stability in conventional organizations develop slowly, and partner sovereignty provides a constant strain on hybrid unity” (Borys & Jemison, 1989, p. 242).

For the collaboration between artist and company, this implies both parties committing to the common goal and value set agreed upon and not letting each party’s sovereignty obstruct this.

The unity concerning the collaborative project is important if success is to be obtained.

Furthermore, it is argued that hybrid arrangements often are employed due to no permanent commitment being required from the partners (Borys & Jemison, 1989; Williamson, 2002).

Third, collaboration entry means composing a common purpose for all participants. This further implies the necessity of recognizing that each partner’s commitment to the hybrid’s purpose affects the commitments of its own members to its own purpose. Therefore, even though the collaborative parties retain different and individual goals they need to make “the resolution of conflicting interests and the maintenance of harmony central to achieving the partner’s goals” (Borys & Jemison, 1989, p. 237). When referring to collaborations between artists and companies it is pivotal that a common domain is created, which could be viewed as the purpose of this particular combination of partners.

Artists and companies can be said to origin from two very distinct worlds, which amplify the consequence of actually having to create a common understanding in order for the collaboration to be successful. If this is not possible difficulties could arise in terms of the outcome in focus e.g. a campaign, failing.

Fourth, numerous technologies, and human capital are often comprised by the hybrid and the operational interdependencies among partners are affected by and affects how the partners achieve value creation (Borys & Jemison, 1989). Value creation is then the question of combining the capabilities of the artist and company collaborating in order to improve the competitive advantage of either the hybrid or one or both partners. It is significant to point out that the whole purpose of these collaborations is to create value that would otherwise not be possible if the individual parties were solely operating. The interdependency created between artist and company provides the ability for both to reach a level that more than accommodates their individual needs and it is furthermore pivotal for them to acknowledge the competitive advantage being built in the competitive setting. By combining strengths of both parties to achieve competitive advantage, one can speak of co-branding being of great usage.