Rationality in decision-making within interorganisational networks

Abstract

A networking structure is a natural phase in the evolution of organisational forms. An organisational form of a network is a set of interconnected structures and technological elements, i.e. individual economic agents, cultural and social values that arrange inter-organisational relations in a certain order and make network processes operate in a systemlike fashion. Effective joint work in inter-organisational networks suggests a need for a common goal, which is perceived to be a critical factor for joint activities. The paper studies the rationality of decisionmaking for inter-organisational networks. The analysis of behaviour within inter-organisational networks that consist of agents, like firms, entrepreneurs, governmental authorities, scientific centres, proves that group decisions are not always an optimal method to achieve a goal. There are certain tasks and circumstances when an authoritarian approach to problem solving is more sensible. It analyses a formalized model for joint choice, prevailing practice and rationality of group decisionmaking in order to reach a strategic balance within a network. The study summarizes key advantages and drawbacks in case a decision is made by a group.

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Keywords

inter-organisational networks, rationality, decision-making procedures, strategic balance, cooperative game, coalition

Citation

Danylovych-Kropyvnytska M. Rationality in decision-making within interorganisational networks / M. Danylovych-Kropyvnytska, A. Limański // Economics, Entrepreneurship, Management. — Lviv : Lviv Politechnic Publishing House, 2017. — Vol 4. — No 2. — P. 9–14.

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