The Main Idea of a Cluster Organization: Definitions and Main Attributes

The cluster concept developed by Porter has been the basis for the cluster-based policy implemented at various levels: starting with international organizations such as OECD (OECD, 1999; 2001), the World Bank, through the national level (government agencies) up to the regional and local level (local authorities). The cluster-based policy implemented in the European Union countries is also based on Porter’s concept. In 2006, the EU Competitiveness Council recognized clusters as one of the nine priority actions to increase innovation at the European level, while the effective cluster-based policy was regarded as an important tool in achieving the Lisbon Strategy objectives (2000-2010). The support for cluster development is also provided within the current EU strategy (2010-2020): “Europe 2020: A strategy for smart, sustainable and inclusive growth”.

Martin and Sunley (2003) point out that the cluster concept was from the outset promoted by Porter not only as an analytical concept but also as the policy basic tool. This is particularly facilitated by the universality of Porter’s idea, although, in the context of economic development strategies, it has also been criticized by some scientists. As Feser and Luger (2003) claim, “[...] the flexibility of cluster analysis can be used improperly to ascribe a false scientific legitimacy to preconceived - and generally politically motivated - visions of regional economic reality” (p. 12). Glavan (2008) also speaks in a similar tone, stating that “the definitional elasticity of the cluster concept undermines the operationality of the theory while simultaneously making it an ideal tool for politicians”.

As a part of the EU cluster policy, a number of strategic economic programs have been developed, the implementation of which concerned allocation of funds to support clusters. This required not only an unambiguous and precise determination of the cluster’s boundaries, but also an indication of the “command point” of the cluster, i.e. an entity which, on the one hand, would be the holder of financial resources allocated for the development of a given cluster, and, on the other hand, would coordinate activities undertaken within the cluster structure. Due to the ambiguity of the concept of cluster, practitioners began to use their own terminology when designing and implementing the cluster-support policy. To describe cluster structures, the EU programs included such terms as “SME groups with a cooperation agreement”, “cooperative groups” and “networks of economic relations”.

However, the most common term used to describe the activities concerning cluster development is “cluster initiative”. It was introduced into the literature mainly by Solvell, Lindqvist and Ketels, who in 2003, 2005 and 2012, as a part of the research project “The Global Cluster Initiative Survey” (GCIS), scrutinized CIs operating in various parts of the globe (mainly in Europe, North America, New Zealand and Australia) and published the obtained results in “The Cluster Initiative Greenbook” (Solvell et al., 2003; Lindqvist et ah, 2013). As a part of the GCIS 2003 project, the research covered 250 CIs (out of about 500 identified), and in 2012 - 356 initiatives (operating in fifty countries, mostly belonging to the OECD). Basing on the research results, the authors of “The Cluster Initiative Greenbook” came to the conclusion that CIs are structures with a fairly short experience (the majority was created in 1999 or later), most often found in developed economies or in the transformation phase, with a significant role of the local government, functioning mainly in high technology sectors (such as ICT, medical, production technologies, biopharmacy) (Solvell et al., 2003; Lindqvist et ah, 2013).

According to the definition they proposed, CIs “[...] are organised efforts to increase the growth and competitiveness of clusters within a region, involving cluster firms, government and/or the research community” (Solvell et ah, 2003, p. 15). In Porter’s opinion, initiatives aimed at advancing the cluster level are a new way of organizing business activities that go beyond the efforts to reduce costs and improve the overall level of the business environment. Therefore, CIs can be treated as a tool in developing cluster policy, which implemented at the interface between regional, industrial and innovation policy (as well as the policy of the SME sector and the foreign direct investment policy), consists in stimulating competition and simultaneous collaboration among enterprises and, more broadly, among sectors and regions (Porter, 2008). The authors of the “Greenbook” share a similar point of view. In their opinions, CIs operate within three different policy areas: the first group includes regional, industry and SME policies, the second group includes FDI attraction policies and the third group involves science, research and innovation policies (Solvell et ah, 2003).

CIs have their own life cycles which only partly overlap with a cluster’s life cycle (Solvell et ah, 2003). CIs can be created at any stage of a cluster’s development, both in the early as well as in the later stages of its development (to enhance its further development) (Solvell et ah, 2003). With regard to the legal basis, CIs can be divided into formal and informal ones (Knorringa & Meyer-Stamer, 1998) - they can either become formalized via various legal contracts or operate without them, only on the basis of common goals and business objectives. The way CIs are created is well illustrated by the typology developed by Mytelka and Farinelli (2000), according to which one can distinguish spontaneous clusters, clusters induced by public policies, and mixed forms (support provided for bottom-up clusters). CIs can be considered in the same way, by dividing them into bottom-up, top-down and mixed ones. The bottom-up term emphasizes the enterprises’ willingness to cooperate during the further development of the existing relationships among the partners. Bottom-up CIs most often support the development of spontaneous clusters (created primarily on the basis of endogenous factors such as natural resources, resources developed in the region and industrial traditions). By contrast, top-down structures are created by nonbusiness entities (e.g. R&D institutions, business-related institutions and even public authorities). The research studies by Solvell et al. (2003) show that bottom-up initiatives are often launched in response to a crisis situation, while top-down initiatives are the result of implementing government programs. The scholars’ observations also indicate that enterprises are less willing to become engaged in top-down CIs (when compared to the bottom-up ones), yet they can count on greater support from public authorities by using a variety of incentives (created as a part of public policy, e.g. cluster policy). Top-down CIs are in many cases artificially designed organizations that are “the result of searching for” clusters in a given region. Therefore, as the authors of the “Greenbook” claim, support for already existing clusters is much more beneficial. With regard to mixed initiatives (the last group of CIs), they emerge from joining common efforts of the enterprises as well as the representatives of other sectors and, in some cases, also of public authorities of various levels. The results provided by the Solvell team of GCIS (2003) indicate that top-down or mixed CIs were the most numerous within their research sample - the government acted as the initiating party for about one-third of the CIs included in the sample and as a co-initiator for another one-third of the group. Only slightly more than one-fourth of the CIs were the bottom-up structures. The 2012 survey (by GCIS 2012) revealed slightly different proportions - about 40% of the CIs were initiated by the government and comparably the same number by the private sector. The involvement of public authorities in the processes of creating and developing CIs is reflected in the structure of financing the activities of such initiatives. Both the results of GCIS (2003) and GCIS (2012) indicate that the financing of the research CIs was provided primarily by the government (54% of the revenues was the result of having received support from public authorities). During the analyzed period (2003-2012), the support of private funds in financing CIs increased (from 18% to 34%). According to the “Greenbook” findings, public funds play an important role in the early development phase of CIs. In subsequent phases, the participation of these funds decreases whereas own funds (membership fees and revenues from the provision of services by the initiative) become the main source of financing CIs. In this way, CIs, being originally project-based organizations, are transformed into membership-based organizations (Solvell et al., 2003).

Contrary to CIs, a cluster, due to the shortcomings and ambiguity concerning its definition and practical application, is devoid of the characteristics of an organization. With regard to the praxeological definition introduced by Kotarbiriski (1982), an organization is “[...] a whole the components of which co-contribute to the success of the whole”. Reversing the above reasoning, an organization as a whole also contributes to the success of its components (Kozminski & Obloj, 1989). The notion of “the success of the whole” can be considered in terms of a synergy effect that applies not only to a cluster, but also to a Cl. Referring to the discussed concept of Cl and considering the praxeological notion of the theory of organization and management, it is worth paying attention to the three meanings of an organization: material, functional and attributive. In the material context, a Cl is a whole structurally separated from the environment (however, it is not possible to accurately determine the spatial scope of such a whole) composed of institutional entities (which joined it voluntarily) that consist of deliberately selected and organized teams of people. Members of a Cl (both institutional entities as well as their representatives) and other components that belong to it (e.g. various types of resources) are connected in cooperation to achieve specific goals. With this view, a Cl is an “organization at a higher level of aggregation”, “a complex organization” or “a higher level organization”. Identification of a human being with any non-individual entity results in creating a group identity (Lis Si Lis, 2013; 2016). Therefore, in the case of CIs (and also its institutional members) identity should be understood as “an intersubjectively shared and a relatively homogeneous vision of an organization, which is reflected by the identity of individuals that constitute it” (Lis & Lis, 2013). With regard to the functional meaning, the key factor in achieving specific goals in a Cl is the coordination of activities performed by individual members of the group by using a specific combination of resources. In terms of the attributive meaning, a Cl can be perceived as a set of features that (depending on their mutual fit within the established whole) decide about the organizational efficiency of the initiative and affect the possibilities of achieving the goals in the future.

Any organization (including a Cl) can be treated as a system composed of elements (subsystems). CIs feature all four elements (subsystems) distinguished in Leavitt’s organization model (Leavitt, 1964) - two “social” elements, namely goals and tasks, people, and two “technical” elements: structure and technology. The first element (goals and tasks) refers to a set of goals that each Cl sets for itself and the activities that must be completed to achieve them. The second component (people) includes all the people who, as the consequence of their parent organizations’ joining CIs, have, in this manner, become a part of them. This particularly applies to those who represent member enterprises (or other entities) in a Cl, joining the activities undertaken within the grouping - the efficiency and effectiveness of the Cl depends on their knowledge, skills, experience as well involvement and mutual relations. This category also includes other workers employed in entities which hold the status of a member, although their role in the development of the Cl and the implementation of its goals is marginal. The third component concerns the formal structure, namely the principles of sharing the tasks and responsibilities and appointing smaller subsets to carry out the tasks assigned to them. This category also includes issues related to governing a Cl and the responsibilities it involves. The last element of the model (technology) refers to the resources that are utilized by a Cl (both tangible and intangible) and the terms of their use.

With regard to organizational complexity, a Cl can be classified as a network organization. According to the network approach, a network is a set of units connected with one another by a system of connections of a various nature - vertical (along the value chain), horizontal (based on cooperition) or diagonal (collaboration with institutions supporting the business activity, as well as public authorities) (Axelsson & Easton, 2016). In addition to such connections, the basic distinguishing features of the network include the structure (which reflects the interrelationships among the network components), the position (an aggregation of overlapping roles assigned to each network element) and the process (changes in the relationship among the network elements affected by the distribution of power and the structure of the business) (Easton, 2016).

Therefore, a Cl should be understood as a formally established organization which functions at a higher level of aggregation, is composed of institutional members (and their units) who purposefully and voluntarily joined it, being engaged in cooperation to achieve common goals (concerning the development of a specific cluster) and/or individual goals (related to their own development).

In accordance with the definition presented above, the subsequent part of the publication concerns CIs referred to herein as COs. As far as the institutional members are concerned, a CO includes, first and foremost, enterprises, but also other entities such as R&D institutions, business- related institutions and public authorities. Managing a CO means coordinating the activities undertaken by the institutional members (and their units) as a part of a given initiative, which allows (as it is in the case of a cluster) to achieve synergy. The concept of “the synergy effect” refers to the ability of entities that are members of a Cl to create an additional value by remaining in the cooperation with the other entities, whereas this value is higher than the sum of the values that would be generated by each of these entities separately.

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