Two Sides of the Cultural Equation—The Need for Cultural Competence to Deliver Relational Rents from Inter-organization Collaboration

Early attempts at inter-organizational collaboration based around EDI (electronic data interchange) were a worthy attempt to derive benefits to both parties. Although some performance and cost-saving advantages have been realized, it has taken time to recognize the origins of many of the challenges that continue to surface. Developing a relational view seeks to go much further than just the technical benefits of EDI data exchange. If the potential outcomes of full inter-organization collaboration can be realized then the opportunities are enormous. Like the “end of the rainbow”, the closer we get to work with another organization, the more it seems to move away and more and more challenges pop up. The authors have undertaken longitudinal research on published traditional frameworks and practice across organizations which, although they strive to be objective, are rarely free of cultural bias. They also conclude there are serious shortcomings in how effectively organizations recruit, develop and utilize their people. Organizations are implementing a wide range of policies and programs to identify and eliminate pay inequalities and improve their attractiveness as employers to women and other diverse people; however, a great change has not materialized. A new conceptual framework is proposed centered around Dyer and Singh’s (1998) approach to achieve relational rents whereby a synergistic exchange relationship between employees of one organization is able to communicate effectively with another can deliver a win–win for both. The authors emphasize an a priori need for employees to have a cross-cultural capability to recognize differences and respect those differences. The culture gaps give rise to a series of dilemmas that, when reconciled, deliver the relational rents. The findings are underpinned by rigorous fundamental research and consulting practice and reveal the need for employers to identify and reconcile key challenges around the way work needs to be done throughout their organization in partnership with external organizations. They describe a series of Apps they have developed as a practical toolkit for exploring this new concept.