Topic C.7: Incentives for the collective maximization of benefits in inter-organizational corporate networks for renewable resources use

Incentives for the involved actors have to be defined in the context of the governance of value-generating networks (see topics C.3 and C.4) to limit self-interest maximizing behavior at the expense of collective benefit. Since there are usually no hierarchical coordination opportunities in inter-organizational networks (such as in cooperatives), the network actors have to coordinate by means of bilateral and/or multilateral decision-making processes. Within the network, each company has the incentive to maximize its self-interest by means of, for example, increasing the individual company success. The maximization of individual performance measured, for instance, by parameters such as profit or turnover, can be contrary to a maximization of the networks’ overall performance, i.e. its cross-enterprise resource efficiency. The tension between individual and collective benefit maximization can only be balanced by the individual companies’ close strategic coordination. Consequently, research is done on the incentives that increase willingness to synchronize coordination. It is important to note here that, from an agency theory perspective, each company in the network assumes the role of the principal as well as that of the agent. This topic is based on the foundations of the new institutional economics, particularly on agency theory (Ross, 1973; Eisenhardt, 1989). There are also preliminary studies dealing with the determinants of companies’ embedding within inter-organizational networks (Gulati et al., 2000). Own preliminary studies include a study of intra-organizational cooperation networks (Rank, 2010). From a theoretical and conceptual perspective, this topic first requires preliminary studies in the field of new institutional economics dealing with the emerging multi-agent, as well as multi-principal issues. Based on this and in a second step, measures are investigated that enable a targeted influence of these incentive and contribution structures. The outcome is an impact analysis of incentives in networks, as well as an analysis of the effect of trust on actor behavior.

On a methodological level, the simultaneous enquiry into network structures at several levels requires a substantial expansion of existing procedures. Multivariate Exponential Random Graph Models (ERGM), as well as network analysis methods, which are based on the linked design, are applied in the first instance (see topic C.6). These models are tested empirically on, for instance, networks in the wood pulp industry and in the cooperative sector. This should provide insights into interactions between personal and organizational relationships, as well as leading to the further development of the relevant analysis technique and models. In conjunction with topic C.3, it can be determined whether market-related and/or hierarchical co-ordination forms are more advantageous for distribution systems’ optimal design. Incentives for the collective maximization of benefits can also be derived from the investigation into the influencing factors regarding the acceptance of products from renewable resources (topic C.4).