Inter-Organizational Relationships as Political Battlefields: How Fragmentation within Organizations Shapes Relational Dynamics between Organizations

Whereas extant theorizing on inter-organizational relational dynamics has highlighted the importance of between-partner differences, we shift attention to within-partner differences. We explore how internal fragmentation – i.e., the existence of multiple coalitions within a partner organization, each with different interests and perspectives – influences the evolution of relational characteristics in inter-organizational relationships. Based on a longitudinal case study of a dyadic strategic alliance, we develop a process model, describing how internal fragmentation within one of the partner organizations can lead to a counterintuitive relational pattern – i.e. dual relational dynamics – where decision makers of both partners continue renewing their formal commitments, while simultaneously experiencing negative trust dynamics. We show that the existence of different belief systems within one partner organization can lead to a politically charged process, where different coalitions within this organization frame and act upon inter-organizational events in different ways. This politically charged process can fuel both hope and disappointment among decision makers of both partner organizations, leading to dual relational dynamics. Our findings contribute by advocating a political perspective on inter-organizational relationships. We also demonstrate the relevance of this political perspective by showing how it challenges the dominant notion of inter-organizational relational dynamics as reinforcing spirals.