Conflict resolution in meta-organizations : the peculiar role of arbitration

Meta-organizations, such as joint ventures and other complex forms of inter-firm organizations, are characterized by the absence of formal authority. This lack of internal hierarchy can lead to severe conflicts between cooperating organizations and hence requires specific governance. This paper recognizes arbitration as an integral part of the organizational architecture of meta-organizations. First, attributes are identified that in the context of meta-organizations distinguish arbitration from ordinary courts. Then these attributes are considered to discuss why arbitration should be understood as an internal rather than an external governance device, delineating the boundaries of meta-organizations, and leading to optimal investment decisions.