chapter  6
12 Pages

Coalitions in Organizations: Labor Unions

One final theme that we have found in a number of different types of superorganizations is the advantage of homogeneous membership. Where member firms produce similar products and use similar production processes in a hierarchic environment, their superiors can more easily parcel out resources according to their 'needs'; they can also more easily evaluate their performance. This largely explains why such firms are placed under the same controlling authority, even if they are regionally dispersed. Resource-pooling firms survive better in competitive markets when their members produce similar products or services and have congruent interests. Members of a cartel are more likely to come to an agreement on prices and then to stick to them when they are more or less of the same size and capacity. A franchiser can more easily deter the opportunistic moves of franchisees if they all produce the same products with the same technology. Technical progress and fashion, by introducing opportunities for differentiation, make it more difficult to harmonize the interests of franchisers and their franchisees.