Walking a tightrope: creating value through inter-organisational relationships

This paper provides an overview of the literature on interorgani-zational relationships. Although the literature on interorganizational relationships is extensive, a pervasive theme that is either explicit or implicit in the majority of the articles is the simple notion of whether interorganizational relationships make sense and whether the advan-tages outweigh the disadvantages. This article reviews six widely used theoretical paradigms that explain interorganizational relationship for-mation, including transaction costs economics, resource dependency, strategic choice, stakeholder theory, organizational learning, and insti-tutional theory. Although each paradigm alone is insufficient to capture the complexities of interorganizational relationship formation, the fact that interorganizational relationships can be justified from such diverse theoretical backgrounds is impressive. The paper also reviews the six forms of interorganizational relationships most commonly pursued in practice and discussed in the literature, including joint ventures, net-works, consortia, alliances, trade associations, and interlocking direc-torates. Through these discussions, we elaborate on the potential ad-vantages and disadvantages of participation in interorganizationa