These changing realities also impact on organizations. The outdated business model relying on long-term employment and benefits packages has been supplanted by more flexiblearrangements: services are outsourced, expertise or labor is sought ad hoc, and individuals living across the globe work together in virtual teams.
Notwithstanding the competitive advantage of these developments,they also challenge the willingness and ability of individuals to cooperate for the benefit of the organization. Such developments affect both private firms and their roleas employers, and also public and non-governmental organizationsas providers of key services to society (e.g. courts, police). Key questions related to the organizations domainare:
- How should organizations be reshaped so that they foster sustainable cooperation in conditions of increasingglobal competition and pressure towards flexibility?
- At which point does increasing social network heterogeneity weaken organizational identities and loosensolidarity at work, and when do they lead to positive cooperation spillovers?
- How can the vicious cycles that often emerge fromclashes between competing stakeholder interests andlead to the demise of cooperation be avoided?
Example: The tension between stability and value: the case of family firms
Family firms elucidate the tension between stability and value. In the Netherlands, they comprise 69% of businesses, provide 49% of the jobs and generate 53% of GDP. Such rms create value in communities and families by maintaining local employment also in times of crisis, and are more successful at protecting the reputation of the business, the closer the family name is tied to management. However, protecting the power position of the family can also undermine long term business success. In 70% of the cases the transfer of family rms to the next generation goes wrong. After each generational transition, profit decreases. After the third transition only 3% survives.