Tuesday, May 9, 2017

A Model That Moves Business Clusters to Collaborative Communities

Moving from a cluster to a collaborative community is possible under the right circumstances. There are advantages in doing so that include cost, risk, speed of products to market, flexibility, and economies of scale advantages. According to an article studying mining companies in Greenland published in the Journal of Organization Design it is possible to create these collaborative communities to the advantage of its members (Kadenic, 2017). Working closer together creates an additional advanced step in the development of an economic cluster.

According to the study, there is a model clusters can use to create greater collaboration. This includes ensuring that there are common resources, solid communication infrastructure, and appropriate protocol/rules among members.

Commons: The shared knowledge and resources that all of the actors of a cluster can use. You might think of human capital, natural resources, government grants, etc...

Infrastructure: While infrastructure in this case may take other forms it also relies heavily on communication infrastructure such as networks, file sharing, and other forms of close communication.

Protocol: The overall development of rules and agreements that help to create a collaborative environment through the reduction of opportunism in the relationships.

Before they can truly collaborate the right mindset must be developed that includes cognitive, social, geographical, and institutional similarities. As these companies exist in close proximity to each other they share characteristics that make them more likely to work together. When radically different business models and mindsets are at play they won't collaborate as much.

This model helps us understand that collaboration is possible even among businesses that were previously highly competitive. It will take time and effort for companies to see how collaboration will create a stronger sub-system of businesses that act at times as a similar unit. In international market competition having a wider network of businesses that have greater capabilities and capacities based on a centralized system of communication and collaboration can push them to work together and adapt. .  
Kadenic, M. (2017). Transitioning from an economic cluster to a collaborative community: mining projects in Greenland. Journal of Organization Design, 6 (1).

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