Inter-organizational Symbiotic Relationships : Key Factors for Success

Abstract: This report focuses on governance mechanisms for industrial symbiosis (IS). The study takes an organizational approach on material and energy exchanges between different organizations (or different parts in the same organization) leading to increased regional resource efficiency. This project explores different strategies for governance mechanisms and analyzes how these affect trust. Significant factors for initiating and keeping a collaboration successful are also analyzed. Representatives from 24 Swedish cases of symbiotic arrangements are interviewed and ten themes affecting IS collaborations are identified. The themes are governance structure, shared vision, previous collaboration, local conditions, initiating a collaboration, activities to build trust, conflicts, transaction-based or goal-oriented approach, indicators and distribution of costs and benefits. Among the governance structures used are hierarchy (collaboration between different parts of the same organization), joint venture, strategic alliance and different types of agreements. Common is a 10-15 years agreement, sometimes combined with a strategic discussion about the development of the collaboration. Three factors particularly affecting collaborations are identified: strategic meetings, indicators related to the collaboration and fair profit distribution. The factor strategic meetings is about combining long term agreements with innovation. Long term agreements might be necessary when a project requires investments. Meanwhile, this can suppress innovation by supporting outdated solutions. The paradox of needing both long term agreements and continued innovation may be solved by the practice of having strategic meetings and contract surveillance. Another significant factor for successful collaborations is the use of jointly evaluated indicators. To jointly evaluate a project according to predetermined indicators gives all parties the opportunity to know when a collaboration is successful. The third significant factor is fair profit distribution. Unfair profit distribution may delay or stop a project. It may also decrease trust in an ongoing project. A fair profit distribution is a key factor for enabling long term relationships.