The moderating effect of legal framework on the relationship between interrelationship learning and value creation to obtain sustainable performance

Article history: Received: March 1, 2019 Received in revised format: March 16, 2019 Accepted: April 2, 2019


Introduction
Learning and knowledge acquisition through planned activities and collaboration with partners such as donors, cooperating agencies, governmental institutions, states, supporting centers, etc. occur through many techniques such as networking, training, alliances, tailored responses to challenges and many other mechanisms through both the structural and process approaches of interrelation learning, consequently these activities of knowledge exchange can cause achieving planned and unplanned experiences and ongoing capacity building entail mobilization and community development.Drawing on inter-organizational learning literature, we emphasize on the collaborative learning approach and more specifically on the strategic perspective which include more formality and structured goals than knowledge transfer perspective.Inter-organizational learning is the engagement of organizations in inter-organizational projects or/ and networks involving multiple partners with legally independent but operationally interdependent characteristics at the aim of knowledge collaboration (Bartsch et al., 2013;Lee, 2001;Pemsel et al., 2014).Project-Based Organizations (PBOs) is one of the mechanisms that best represent the integration between organizations that can be seen in various sectors but not obviously among Non-Governmental Organizations (NGOs) in the literature (Latif & Williams, 2017;Pomeroy & Carlos, 1997).This study tries to demonstrate the role of PBOs in knowledge collaboration among NGOs which has not received enough attention in civil society literature.PBOs is an intrinsically innovative organizational form that creates and recreates temporary systems or new organizational structures for carrying out each project (Hobday, 2000;Invensis Learning, 2018).However, there is a tendency toward shifting the view to projects as temporary endeavors to viewing them as short-term process embedded in the expected long-term activities among the interacted actors (Ruuska et al., 2011).
PBO structure list under the emerging approach of management and involve working on projects that are time-limited instead of fixed functions in traditional mechanistic approach of management.PBO structure is more appropriate when the organization is unable to stick on specific goals and when the dynamism dominates the prevailing environment (Thiry, 2007).Traditional organizations structures are most focused on hierarchical structures that involve implying organizations' functions to specified employees, while PBOs are focused on finding solutions to best implement the projects within the determined budget in organizations in which their portfolio, strategic, program, and project management levels are highly interacted to perform the project in the determined cost, schedule, and quality (CLEEN, 2016;Thiry, 2007).In practice, project management can be observed obviously in NGOs, but the literature of corporate governance did not mention anything about the existence of many NGOs operating as PBOs.Local and national NGOs worldwide try to benefit from the interrelationships with international civil society agencies and other partners through forming collaborative ties entail knowledge acquisition that enable them to explore innovative performance in the future.International civil society organizations, suppliers and donors, on the other hand, try to achieve their goals and provide sufficient services in areas in-need to reach services usually through local and national NGOs.Thus, local, national, and international NGOs are jointly strengthening the provision of effective services through implementing conjoint projects.
Value creation, in this study, stresses attention on building the capacity of organizations to maintain successful and long term linkages with external partners, while sustainable performance involves ensuring the availability of different economic and non-economic policies and systems in NGOs that ensure managing their different operations and activities in a sustainable manner with minimum iterance of external resources (Sebhatu, 2008).The literature of knowledge collaboration has witnessed increased attention on the role of interrelation (inter-organizational) learning on enhancing the performance of organizations (Fredrich et al., 2018;Levinson & Asahi, 1995;Park et al., 2015).NGOs collaboration has not taken a sufficient space of these negotiations (Doh, 2003;Oetzel & Doh, 2009), and the role of legal and regulatory framework in autonomous regions on building the capacity of local society to operate in a sustainable manner with minimum external inputs from partners has not studied to the best of authors knowledge.Previous knowledge sharing and knowledge collaboration literature has also broadly focused on knowledge collaboration in alliances, networks, shared projects and their outcomes in different organizational levels, but little efforts in the literature has been devoted to the importance of the environmental factors that may enhance or hinder the efficiency of such integrations.In summary, this academic effort proposes quantitative results about the value creation process involved in capacity building of NGOs in areas witnessing dynamic legal circumstances and duality in regulations through inter-organizational learning and their effects on having a sustainable performance which has largely ignored in metropolitan areas or autonomous regions that has a legal framework different from that of central government of such countries.It is initial also to mention that the legal framework of such regions usually witnesses a clear discrimination from their states as an upper hand and a side authorizes themselves to hold a green light through obstructing NGOs based in such regions.The basic objectives of this study can be determined in many points: First, to determine the role of PBOs as an instrument of interrelation learning in collaborating knowledge among local, national, and international NGOs and partners.Second, to underline the importance of maintaining collaborative learning relationship among different NGOs in metropolitan areas witnessing legal and regulatory disputes embodied in the availability of duality in regulations relating to the operations of NGOs in countries with autonomous regions, and its role in enhancing the capacity of NGOs in such regions to maintain linkages with external partners.Finally, to determine the impact of the legal and regulatory framework in autonomous regions on the relationship between knowledge collaboration and capacity building.The key study question is how interrelation learning can create value involved in building the capacity of NGOs to maintain linkages with internal and external partners to achieve sustainable performance in the future, and how the legal framework under which international and local NGOs work can facilitate the success of this process.

Theoretical Background
Inter-organizational learning consider one of the most important processes and a basic way of expanding organization's knowledge and resources in nowadays interrelating phenomenon (Selnes & Sallis, 2003;Yang et al., 2013), it refers to the engagement of two or more organizations in a collective acquisition of information and knowledge (Halme, 2001).Inter-organizational learning has been studied in various business sides and has declared many advantages and pitfalls in each area.Alliances has the greatest portion of inter-organizational theory literature, in which it clarifies the knowledge exchanging opportunities available for collaborative and integrated partners.However, they could not get rid of the tensions of knowledge protection as two conflicting activities (Fredrich et al., 2018).Few studies looked at knowledge exchange and knowledge protection as two initial activities for the firm until Yang et al. (2013) proposed both aspects as two sides of a coin and extended the concept of ambidexterity in interrelation learning to involve occurring both aspects, simultaneously.They could statistically confirm the significant effect of both aspects on organizations' performance.Knowledge acquisition in strategic alliances can be broadly affected by the collective efficacy of alliance teams (inter-organizational groups), in which their strategic thinking and communication abilities can enhance the opportunities of long term performance and better knowledge collaboration (Zoogah et al., 2015).Knowledge acquisition between the collaborative parties leads to the appearance of formal and informal learning behavior which both have positive relationships with inter-organizational learning, but academicians and practitioners declared that a strict formalization can obstruct learning (Janowicz-Panjaitan & Noorderhaven, 2008).
The role of E-collaboration has been also assessed increasingly in the literature in an attempt to discover its effects on information sharing, knowledge transferring, and sharing meanings development through different technological and web-based infrastructure (Choi & Ko, 2012).They showed a positive relationship between different aspects of interrelation learning and E-collaboration but more significantly occur on the development of the meaning of shared information which, on the other hand, depends on the collaborating teams capabilities, quality of shared information represented in IT capability, IT Governance, and management support (Alreemy et al., 2016;Hartono et al., 2010;Zarvić et al., 2012).Networks are entities in which multiple organizations interact, communicate, and assist each other at a network level in a way of groups to achieve a network-level goals.The learning process at the network level usually enable the engaged organizations in such networks to know how to compete and to know how to perform (Gibb, Sune, & Albers, 2017).Many studies have stated that although the individual efforts of organizations to earn specialized, external knowledge may happened, while working jointly might increase their working practice to innovation and better performance (Knight, 2002b;Mariotti, 2011).The project management in NGOs requires continuous interaction with donors and partners in order to reveal the regular updates in the work.In this situation, the communication usually happens through written form or through other technical appliances (CLEEN, 2016).Managing projects requires the availability of different skills in which the individuals in such organizations have to comply with different tasks, this situations may lead projects to be failed as a result of NGOs haste to some projects inconsistent with their used methods or available skills (Thomas, 2005).Inter-organizational learning has been linked to the performance of various systems, organizational, and individual levels of organizations in different sectors (Beeby & Booth, 2000;Knight, 2002), and many studies verified not only the significant effect of collaborative relations in transferring the existed knowledge (exploitation), but in creating new ones and enhancing the abilities of embedded organizations to transfer the exchanged explicit knowledge to tacit knowledge (exploration) (Doh, 2003;Hardy et al., 2003;Herná Ndez-Espallardo et al., 2011;Li, 2010).

Model Conceptualization and Hypothesis Development
Inter-organizational learning has a great impact on value creation of many organizations in different sectors (Hadaya & Cassivi, 2012;Hammervoll, 2012;Kohtamäki & Partanen, 2016).However, little efforts can be seen in the literature that declare the reasons behind the variation of individual organizations in creating value (Hitt et al., 2011).This study illustrates the importance of the availability of adequate external environment to maintain creative performance such as effective legal framework that consider one of the initial factors desired for accomplishing organizational functions successfully through forming inter-organizational relations entail knowledge collaboration between partners.

Inter-organizational learning and performance
Inter-organizational collaboration (IoC) is one of the safeguarding mechanisms to protect relations especially for those who do not have bargaining power (Hardy et al., 2003;Lionel, 2013).Many studies proved the initial role of IoC of civil society organizations with governmental organizations in delivering better services specially in health sector (London & Schneider, 2012;Olafsdottir et al., 2014).Filc (2014) mentioned the ontological difference between state health institutions and CSOs specialized in delivering such services, in which the last can decrease the difficulties found in state health care systems specially in weaker welfare states (Gulzar & Henry, 2005;Olafsdottir et al., 2014).Previous studies showed NGOs to have coercive pressure on the firm partners engaged in collaborative relationships with them as a result of having conflicting interests (Baron, 2006;Liu, 2009;Spar & La Mure, 2003), but this insight could be seen in contrast way in which NGOs could be seen as sources of information if they have common areas of interest such as corporate social responsibility with partner firms and may increase firms credibility (Oelze et al., 2016).Providing humanitarian affairs by civil society organizations and specifically by local and national NGOs in areas in-need to such services is challenging and difficult to be managed individually and require serious integration efforts in which the operations of these organizations as non for profit organizations depend on external logistic, financial, and managerial resources (Gulzar & Henry, 2005).In accordance to previous insights from the literature, this study hypothesizes: H1: Inter-organizational learning has a significant positive relationship with the performance of NGOs engaged in knowledge collaboration with other partners.

Inter-organizational learning and value creation
As a result of an increasing global consciousness toward the favoritism of skilled labor and knowledge collaboration, the role of capacity building has increased and has taken a wide space of academicians and practitioners' attention all over the world.Acquiring better results in civil society sector require NGOs the injection of sufficient knowledge and financial resources as well as adequate local governance to better utilize these inputs (Brown et al., 2001).Many studies illustrate the effective role trust and commitment in engaging and remaining different actors or partners in collaborative relations and their significant impact on value creation (Latusek & Vlaar, 2018;Martins et al., 2017), while others declared that beyond trust and commitment, governing different types of interrelations in developing the abilities of engaged partners (Gjerding & Kringelum, 2018;Hammervoll, 2012).In this study, we hypothesis H2: Inter-organizational learning is positively and significantly related with the value creation involved in capacity building in NGOs.

The mediation role of value creation
The global financial crisis affected broadly on the global economic and finance.This direct most of the organizations including NGOs and supporting centers to increasingly concentrate on enhancing sustainable performance.Consequently, these organizations turn their focus toward building their capacities in a way that enable them to adopt shared projects despite an extreme reliance on external support.The engagement of different types of organizations in collaborations that involve sharing knowledge often facilitate the development sphere of such organizations in scope and scale which lead to achieve better performance (Knight, 2002;Silvestre & Ţîrcă, 2019;Welty Peachey et al., 2018).
H3: The relationship between inter-organizational learning and sustainable performance is mediated by value creation.

The moderating role of legal framework
Yang et al. ( 2013) argued that there may be protection of the core proprietary knowledge between partners despite the followed inter-organizational learning approach.Therefore, this study proposes that the legal framework as an external environment factor moderates the relationship between project-based organizations (PBOs) as an approach of inter-relation learning and capacity building.Civil society domain in general and NGOs in particular requires to be strengthened and underpinned by a strong legal framework that determine the structure, functions, networking and local society development.Through adequate laws entails providing beneficial and effective environment for better performance (Ball & Dunn, 1995).A moderator factor in this study "external turbulences" is adopted from one of the several criticisms to Pluralism Theory which is "difficulties in implementation", this criticism comes out from the idea that the concept of political power dispersing needs good coordination to reach better performance, but, when the required coordination cannot be reached, this may lead to inefficiency and may not be effective (Robichau & Lynn Jr., 2009).For example, when the Federal Government has lack of coordination with the state government because of any conflicts related to sovereignty or dominant power, the regional programs will probably not match with the national programs, which makes the process of deciding programs and policies' priority more complex.
H4: The relationship between inter-organizational learning and value creation is moderated by external environment involved in legal framework.

Sample size and data collection
The core of analysis in this study was the collaborative relationships between NGOs and donors, supporters, funders and support centers.The survey used in this study relied on a questionnaire developed from scales used in previous studies.The questionnaire has been pre-tested by conducting a pilot test with 25 key individuals in NGOs based in Kurdistan Region of Iraq to endorse the comprehensibility and conformity of its items.Dependent upon pilot test, we performed the required arrangements to eliminate any ambiguity in the content of the final survey.The population of this study involved key individuals in local and national NGOs based in Kurdistan Region of Iraq.In order to test study's hypotheses, the questionnaire spread on 200 key individuals in different -objective NGOs.After removing the questionnaires with missing answers, we could include 148 ones in our statistical analysis.

Measurements
We have tested our hypotheses by performing linear regression analysis to illustrate the relationship between inter-organizational learning as an independent variable and sustainable performance as a dependent variable, as well as pursuing the mediation role of value creation between interrelation learning and performance and the moderator role of legal framework between interrelation learning and value creation.This study measured inter-organizational learning by adopting and modifying a scale used by Wang and Hsu (2013) in which it has been originally developed by Hanvanich et al. (2006), Li (2006), and Selnes and Sallis (2003) and Wang and Hsu (2014) (Cronbach's α= .91).For capacity building, the study adopted relationships dimension from capacity building index developed by GEAR (Cronbach's α= .78).
While sustainable performance has been conducted by deploying insights presented first in a study explored by Waddock and Bodwell, (2007), the items used to measure this variable are deducted from the conceptual and theoretical analysis presented by Sebhatu ( 2008) (Cronbach's α= .89).As we could not find an adequate measurement scale for legal framework which in our study involves the availability of two separate NGO laws in the same state, and because the effect of such factors have not been studied in the literature of inter-organizational learning, we depend on focus group discussions (FGDs) with high position individuals such as past and current mayors, Kurdish candidates in Iraqi parliament, high managers in the registration department of NGOs office to acquire in-depth understanding of the Informants, perceptions, aspects related to legal issues in metropolitan areas witnessing a political system with more than one center of power, this step has followed by performing semi-structured interviews with fifteen key individuals in NGOs based in Kurdistan region of Iraq in an attempt to gain detailed insights from people who are more closely involved in the case, these insights have been converted to them to generate a questionnaire and, accordingly a scale with five items has been used for "Legal Framework" factor (Cronbach's α= .78).It is important to mention that all items in above scales are measured by using a 7point Likert scale (7 = strongly agree, 1 = strongly disagree).The items could be found in Appendix 1.

Reliability and validity
Exploratory factor analysis (EFA) has been conducted to examine the validity of constructs.By applying the maximum likelihood method and Varimax rotation, our EFA analysis reported four factors that could explain 58.5 % of the total variance (Table 1)..89 * = items removed due to the low loading Most of the items record factor loading exceed 0.5 indicating to the significant level of factor loading (Hair et al., 2009).Moreover, Cronbach's α for all items are measured in which it ranged between .7 and .9. Besides, the composite reliability (CR) of the measures deployed in this study ranged (0.6 -0.9).Thus, the results placed in Table 1 and Table 2 indicate that the measures used in this study have adequate construct reliability and convergent validity.This study assessed the discriminant validity of its measures through comparing the Average Variance Extracted (AVE) for each construct with the square correlation between a pair of constructs.The results inserted in Table 2 declare that the square correlations between each pair of variables in this study were less than AVE of all the constructs.For example, AVE for interorganizational learning and capacity building are .544and .451respectively which are both larger than the square correlation between these constructs (.108).This approves that the items of each measure best represent the underlined variable.

Descriptive analysis and correlations
The results inserted in Table 3 show that the insights extracted from participants in this study are quite distributed around their means which reflects the small variation in their opinions toward the studied subject.

Linear regression and hypothesis testing
The hypotheses estimated in this study have been tested through conducting linear regression analysis.
The results of Table 4 illustrate the direct positive and significant relationship between inter-organizational learning and sustainable performance (Beta= .541,p < 0.05) as well as it shows a jointly significant effect (F= 60.00), the standardized estimate (Beta= .541) in this interrelation reveals that an increase by a one standard deviation in inter-organizational learning leads to .541standard deviation change in achieving sustainable performance.Therefore, H 1 is accepted.Although the impact of inter-organizational learning in acquiring value creation conceptualized in maintaining long-term linkages with international partners is positive and significant (p < 0.05), but it is not showing a strong interaction (Beta= .329,F=17.70), hence H2 is properly supported.To examine the mediation effect of value creation on the relationship between inter-organizational learning and sustainable performance, the indirect relationship between IOL and SP has been examined.The findings indicate that inter-organizational learning has a significant lower indirect impact on sustainable performance through value creation.The lower value of the standardized estimate of the indirect effect (beta = .46,p<.05) indicate that value creation partially mediates the IOL-SP linkage.Hence H3 is supported.Furthermore, H4 has been supported as the interaction effect of LF as a moderator factor has verified in the moderator test as it influences considerably on the direct relationship between IOL and VC, in which it hinders its strength from (Beta = 0.23) to (Beta = 0.15).These results approve the existence of the moderating impact of Legal Framework on the ability of NGOs to maintain linkages with international partners through inter-organizational learning.

Discussion
The results of this study has illustrated that inter-organizational learning through performing shared projects is necessary for building long-term relationships with partners that in our study consider a value creation but is not sufficient for maintaining such linkages, the reason behind situation may go beyond the unavailability of skilled human resources for adequate technological infrastructure, to the extent that trust may play the most effective role in conceptualizing such relationship in which other studies strongly approved the importance of building relational capital based on trust at an individual level between the engaged partners to acquire knowledge (Kale et al., 2000).Furthermore, value creation did not appear to have an increasingly positive simulation of sustainable performance from interrelation learning through shared projects as the nature of NGOs operations are widely relying on external funds from even civil society institutions or charity from individuals whom are not often scrutinizing the details of supported partners.The legal framework seems to have a significant influence on the available relationship between enter organizational learning and value creation, this reality can obviously be seen in the ground in which the availability of dual rules and regulations may lead to the occurrence of hesitation in NGOs that may cause collision in their interests.NGOs have grown dramatically over the last few decades, this growth helped them have a distinctive sector entail relief and humanitarian affairs within civil society all over the world (Srinivas, 2016).Local and national NGOs in autonomous regions pass through harder paths, the most important issue preoccupying the mind of NGOs boards in nowadays less propitious climate is how they can attract donations to survive and grow.In addition to competing for financial funds, NGOs have to compromise and mandate through showing more programmatic work, but how long they can survive through the competition and compromise is not guaranteed, this situation makes NGOs pass through a constant contradiction.To eliminate that contradiction, NGOs have to secure long-term funds that make them more credible and viable, as well as the role of NGOs law could have a promised effect if it states more systematic capacity building plans for local and national NGOs engaging with international NGOs and other partners to deliver better humanitarian affairs in areas witnessing continuous disturbances.

Limitations and Direction for Future Studies
Although the findings of this study are important and may have a beneficial contribution to the literature, but it is not out of limitations.First, this study could not examine the relationship between its different variables through different periods of time using longitudinal data, but it relies on cross sectional data.Second, the data has been obtained from NGOs based in Kurdistan Region of Iraq which makes our findings not generalizable to NGOs in other autonomous regions but a source of support to our hypotheses.Furthermore, because systems of governing countries have a various implementing method for the legal framework, interrelation learning to maintain sustainable linkages by NGOs with their partners must deeply be studied in future research.

Conclusion
NGOs usually work with community and support each other on a range of issues.Learning is one of the most important issues that needs a collaboration between NGOs with different objectives especially after the recent decades' economic downturn which trimmed back lots of NGOs visions as a way of applying competitive tenders to maintain support and to compete for the limited resources from different donors.This research has been considered as one of empirical studies that examined the impact of collaborative knowledge acquired through setting shared projects between local and national NGOs based on autonomous regions on building and maintaining long-term linkages with international partners.The empirical evidences provided by this study approved that the legal framework under which NGOs operates in autonomous regions and the availability of dual roles and regulation have a significant effect in hindering the relationship between interrelation learning and building the capacity to maintain linkages with partners.

Table 1
Factor analysis and reliability test

Table 2
Discriminant Validity

Table 3
Descriptive analysis

Table 5
Analysis of mediator and moderator test results