Designing Resilient Watershed Partnerships: Structural Properties, Life-Cycles, and the Longevity of Watershed Partnerships Mark T. Imperial, Ph.D. Master of Public Administration Program University of North Carolina Wilmington imperialm@uncw.edu http://people.uncw.edu/imperialm/ Tomas Koontz, Ph.D. School of Environment and Natural Resources Ohio State University Koontz.31@osu.edu Presented at SECOPA 2008, Orlando, FL September 24 – 27, 2008

Research Questions Our objective is to develop testable propositions that determine: How collaborative organizations evolve? The structural properties of collaborative organizations that influence their ability to endure over time We build on theory in organizational theory, networks, collaboration, and institutional rational choice to develop theoretical propositions Understanding the structural properties of collaborative organizations and their evolutionary dynamics (i.e., life cycles) should advance our understanding collaborative environmental management (CEM)

Research on Watershed Partnerships Emphasis on “lessons learned” rather than theory testing or development Dominated by case study and cross-sectional research Lack of consistent definition of a “partnership” or systematically comparing their structural properties Lack of attention to their dynamic properties, yet there is often a succession of different partnerships in watersheds over Failure to distinguish between networks and organizations as alternative strategies of improving watershed governance

Collaboration and Networks Collaboration is any joint activity by two or more organization intended to create public value by working together rather than separately A Network relationship designed to improve governance of larger interorganizational network in the watershed Different than hierarchy (i.e., organization) and markets which are the other strategies for governing a watershed’s interorganizational network Wide range of collaboration at the operational and policy-making levels that may or may not be interrelated in a watershed These activities are governed by networks of formal and informal relationships based on trust, reciprocity, and social norms Our focus in this paper is when these relationships produce a new organizational form

Collaborative Organizations When organizations (and individuals) embrace a collaborative process, make joint decisions, and begin to act as a single entity “Second order” organization whose membership is typically comprised of other organizations, although individuals may be members While networks are an important, relations among members end up being governed by formal and informal rules that give rise to a distinct organizational structure The structure exhibits some element of intentionality, acquires resources, develops a boundary sand exerts its own control over resources, and has a structured set of exchange processes Membership has consequences and its members have a distinct identity and take actions on behalf of the new entity Might even acquire its own staff and dedicated resources that or deployed to advance the collaborative organization’s strategy

What is the life-cycle of a collaborative Organization? Draw on literature of organizational life-cycles Wide range of multi-stage models – we rely on a simple four-stage summary model Adopt a less controversial view that stages represent clusters of issues and problems that an organizational system must confront The problems suggests a sequential ordering of organizational development but the time spent at each stage could vary considerably Development does not have to proceed linearly – older organizations might change their structure in ways that revert to solving problems associated with earlier stages While life-cycles end in death, the death and decline stage are not included because not all organizations die and most die an early death. Death and decline are explained by different theories Cameron and Whetten 1983, Quinn and Cameron 1983, Whetten 1987

Organizational Life-Cycles of Collaborative Organizations Entrepreneurial stage Innovation Lots of ideas High creativity Entrepreneurial activities to acquire needed resources Relatively little planning and coordination compared to later stages Formation of a “niche” in the watershed’s network Organization develops its identity and ideology to distinguish itself from others in the network Heavily influenced by “champions” and entrepreneurial founding members

Organizational Life-Cycles of Collaborative Organizations Collectivity stage High cohesion among members Sense of family Face-to-face communications Informal communication and organization structures Investment in resources may exceed returns but growing support for its overarching strategy and future ability to secure needed resources Champions and entrepreneurs are still needed but increased need for a coordinator and facilitator to manage communication process and for fixer/brokers who can keep the group focused on its strategy

Organizational Life-Cycles of Collaborative Organizations Formalization and control stage Marked by the institutionalization of organizational strategy and its structure embodied by its rules, procedures, and routines Flexibility is reduced to create a more stable system of interactions Conservatism reigns Emphasis shifts to production, efficiency, and maintenance of the organization and its ability to achieve its goals Coordinators and facilitators continue to play an important role Need for someone to play role of devil’s advocate to avoid group think, fixer/brokers who can help with institutionalization problems, and unsnarlers who can navigate through growing internal and external bureaucratic constraints

Organizational Life-Cycles of Collaborative Organizations Elaboration of structure stage Decision making is often decentralized to organizational sub-units Focus begins to shift towards boundary expansion by modifying goals, strategies, processes, or targeting new clients Adaptations and emergence of new subsystems are common Leadership needs may switch back to champions and entrepreneurs with the vision and drive to lead these expansions in the organization

Implications of Life-Cycle Model Governance of collaborative organization changes over time Early emphasis on trust and norms is replaced more formalized processes and rule structures Organizational members have different measures of organizational effectiveness at different life-cycle stages Entrepreneurial stage: acquiring necessary resources Collectivity stage: trust, relationships, and internal processes Control and elaboration of structure stages: efficient production and investment in organization specific processes Since researchers examine partnerships with different structures and life-cycle stages, this explains the variation in “lessons learned” and “success” factors Cross-sectional research can ignore importance of life-cycles and issues related to creation and death

Structural Inertia Theory Applied to a wide range of organizations and networks We argue that it also applies to the collaborative organizational form Diversity in organizational forms is greatest during creation Once resource commitments are made they are difficult to recover Resources are required to sustain interactions Tends to be some stability in structures when viewed over time Researchers refer to this as structural inertia Inertia is not a symptom of “bad” management but is actually a by-product of an well designed organizational system that exploits the synergies of members and their resources Hannan and Freeman (1984) Amburgey, et al.

Structural Inertia Theory Basic theoretical arguments Environment that an organization operates in creates a selection process that favors organizations with structures that are difficult to change This doesn’t mean that organizations don’t change but that they respond relatively slow to threats and opportunities and tend to make peripheral rather than core changes Modern world tends to favor organizations that have Capacity for reliable performance and account rationally for their actions Reliability and accountability also depend on the organizations ability to reproduce its structure consistently Organizations with high levels of all three factors are more likely to survive than those with low levels Older organizations will tend to have higher levels of all three factors than new organizations

Structural Inertia Theory Accountability is a critical issue During early stages of an organization potential members and resource contributors want assurances that the investment of resources will not be wasted At the same time, too much emphasis on accountability or poorly designed monitoring systems can create disincentives for joining and/or contributing resources to the organization Institutionalization encourages reproducibility but is a “two-edged” sword Institutionalization can lower the transaction costs associated with exchange processes because members no longer need to expend resources to reproduce the structure However, the process of institutionalization makes organizations resistant to change

Propositions P1: Collaborative organizations with high reliability are more likely to survive than organizations that are unreliable. P2: Collaborative organizations with high accountability are more likely to survive than organizations that are unaccountable or have poorly designed accountability systems that create incentives for nonparticipation. P3: Older collaborative organizations will have higher reliability and accountability than younger collaborative organizations. P4: Collaborative organizations that have reproducible structures (i.e., institutionalized rules, routines, and procedures) are more like to survive than collaborative organizations with non-reproducible structures. P5: Older collaborative organizations are like to have more reproducible structures (i.e., institutionalized rules, routines, and procedures) than younger collaborative organizations.

Structure of Collaborative Organizations We argue that organizations as structured systems of routines and competencies, which refer to the repetitive patterns of activities by individuals and groups within the organization Our approach borrows heavily from the institutional rational choice literature Rules are explicitly or implicit attempts to achieve order and predictability Prescriptions that forbid, permit, or require actions or outcomes and the sanctions or rewards associated with following the rules Formal or informal and wide variation in level of formality Operate configurationally in that the way one set of rules operates can affect another Hierarchical, polycentric, or nested rule structures are all possible

Boundary Rules Configuration and interaction between member and strategy rules generates the boundary that distinguishes the collaborative organization from other network members Member Rules Who can or cannot be a member Different types of members (member, associate member, ex officio) Members are organizations but individuals might be included Voluntary or required by a higher-order set of rules (e.g., state statute) Rules pertaining to expansion or expulsion of members Selection of members will influence and constrain the strategic options of the collaborative organization

Boundary Rules Strategy Rules Specify shared definitions of a problem or set of problems within the domain of the organization Specify the responses to problems that are legitimate or illegitimate – what it can or cannot do, what are its roles or processes Specify how it will acquire resources needed to accomplish these tasks Specify the relationship between the collaborative organization and other members – relationship to the “turf” of network members Strategic choices are likely to influence the membership structure of the collaborative organization

Decision Rules Shape the processes by which organizational members develop norms and make decisions Rules are likely to evolve towards formality and complexity and may have a path-dependent quality Preference Aggregation Rules Consensus is common but formal structures may have more complex voting systems Distribution of Power Rules Equality, voting vs. nonvoting, creation of executive boards, centralized vs. decentralized Distribution of Roles/Responsibility Rules Officers, sub-units, work groups, specialization of functions Distribution of Participation Rules Width: degree each member participates in each decision Depth: degree each member can influence a specific decision

Coordination Rules Preference aggregation rules typically give rise to coordination rules that define mutual exchange rights among members Exchange Rules Set up the operating procedures that govern resource exchanges between the member and the collaborative organization or between members Monitoring Rules Created to govern exchange process and ensure that members follow through on commitments Dispute Resolution Rules Specify how conflicts among members will be resolved Enforcement Rules Sanctions for noncompliance of rewards for compliance

Propositions P6: Collaborative organizations that have formal rules are more like to survive than collaborative organizations that rely on informal rules. P7: As a collaborative organization increases the scope of its membership, it is more likely to have formal rules than if it has a small membership. P8: As a collaborative organization increases the complexity of its membership, strategy, decision, and coordination rule structures, it is more likely survive if it formalizes these rules than if it relies on informal rules and norms.

The “Liability of Newness” Organizational theory demonstrates that new organizations suffer from a “liability of newness” Younger organizations have a higher propensity to die (regardless of life-cycle stage) than older organizations We argue that collaborative organizations are likely to have a similar liability and new organizations will have a higher likelihood of failure than those that are older We are not interested in those created with the express purpose of being dissolved once some task or set of tasks is completed Liability of newness arises from a combination of internal and external factors Internally, fundamental changes in core rules and organizational routines robs the organization of its history Resets the liability of newness clock back to zero Stinchombe (1965) Singh, et al. (1986) Hannan and Freeman (1984)

The “Liability of Newness” Process of acquiring external legitimacy often takes time and is important for any organization’s survival Some minimum level of legitimacy is needed to acquire resources (e.g., membership, public or political support, money, etc.) needed to survive Collaborative organization must be perceived as a legitimate response to watershed problems As organizations grow older they tend to develop stronger exchange relationships, become part of the hierarchy, and have their actions endorsed by powerful actors Older organizations tend to be more legitimate One way younger organizations offset their liability of newness is to acquire legitimacy

The “Liability of Newness” Literature is less clear on the relationship between organizational change and death rates Net affects appear to depend on time Changes may prove to be adaptive but only after enough time passes to repair the problems incurred as a result of the disruptive aspect of the change Older organizations learn to change by changing and develop modification routines so certain changes are more likely to be repeated over time

Propositions P9: Older collaborative organizations are likely to be viewed by members of the network as more legitimate than younger collaborative organizations. P10: Collaborative organizations with formal rules structures are likely to be viewed by members of the networks as more legitimate than collaborative organizations that rely on informal rule structures P11: Collaborative organizations with higher levels of legitimacy are more likely to survive than collaborative organizations will low levels of legitimacy. P12: Young collaborative organizations that acquire high legitimacy by adopting formal rules or by other means will have a higher rate of survival than those with low legitimacy. P13: Younger collaborative organizations that make major changes to their membership, strategy, decision, and coordination rule structures will increase their risk of death. P14: Older collaborative organizations that make major changes to their membership, strategy, decision, and coordination rule structures increase their risk of death to that of a younger organization.

Implications Important differences between networks and organizations as strategies for improving watershed governance Collaborative organizations are a hybrid form that shares important features of network and hierarchical governance strategies (markets are the third) Important to understand their structural characteristics and recognize that watershed partnerships can differ significantly. Understanding these differences is critical to theory building

Implications Need to understand how to design and manage collaborative organizations because they get things done and improve network governance Connect subset of network in stable, ongoing set of interactions repeated over long time periods Creates multiplexity by connecting some network members in new ways Serves as a hub within the network – a forum for making collective decisions and achieving direction, control, and coordination among network members Generates trust that is then used to govern other network relations Generates particular form of organizational learning – “collaborative know how” that is used to facilitate other collaboration among network members

Implications Theory related to the structure and survivability of collaborative organizations is important if we want to craft institutions (e.g., watershed partnerships) that endure over long time periods Addressing watershed problems requires sustained efforts over long time periods to avoid “random acts of environmental kindness” Paper helps reduce the knowledge gap related to the life-cycle features of a collaborative organization Just as the architect needs to understand how to build a building, collaborative public manager needs to understand how collaborative organizations form and develop Life-cycle literature draws attention to important structural features as well as the managerial problems during different stages

Implications Important implications for research Collaboration, network, and watershed researches tends to focus on exemplary activities with a record of achievement Need to balance the functionality with an understanding of the dysfunctional to understand why they fail to work or die an unexpected death Theory development also a requires greater precision in how we define and systematically compare these institutions and governance arrangements

Questions?