When Wor(l)ds Collide: Negotiating and Renegotiating Meaning in Interorganizational Relationships

Abstract

An integral feature of organizational enactment is the social construction of meaning. Over time, organizations create an often implicit canon of meaning, which is an essential ingredient for the social construction of what is collectively perceived to be valid and true. This interpretation-guiding, idiosyncratic canon of meaning can be challenged, however, when organizations form interorganizational relationships and the interpretive worlds of two organizations collide. In this paper, we investigate the partners’ continuous efforts to negotiate and renegotiate meaning by examining the extent to which meaning manifests in contractual definitions which we understand as explicit outcomes of meaning (re)negotiations. Taking a socio-cognitive perspective, we suggest that the partners more likely strive for explicit definitions the larger their social and technology overlaps because overlaps (1) unleash the ability for explicit definitions and (2) establish mutual esteem of explicit definitions. We also argue that when uncertainty is high, the impact of social overlap on explicit definitions is stronger, while when uncertainty is low, the impact of technology overlap is more pertinent. We test our conceptual model on a longitudinal dataset of 1,672 interorganizational relationships in the biopharmaceutical industry and find general support for our predictions. Our paper contributes to research on interorganizational sensemaking and the literature on contract design and adaptation.