All ANSPs are equal, but some are more equal than others

In the late 1970s, 35 French millers decided to come together to improve the quality of baguettes in the face of declining bread consumption and competition from supermarkets using cheap flour and low prices. Their complex organizational arrangement provides a sterling example of hybridization* for Air Navigation Service Providers. How can hybridization help?

The millers are currently a hybrid company with a sterling strategic center. They present 2 reasons for hybridization: to ensure improvement in the quality of baguettes and to create a strategic alliance. In exchange they receive a brand name and an opportunity to vote on decisions. Each miller gets the privilege of 1 vote per miller inspite of the uneven distribution of capital among the millers.

They are responsible for their own resources and strategies; each remains in control of his key asset: flour. Yet the strategic center is made up of several committees who are responsible for making policies about the brand name, while another committee sees about marketing the brand name; a third group is responsible for conflict resolution and a franchisor who monitors the bakers. There are currently at least 3000 bakers.

Hybridization is analogous to a symbiotic relationship. One of the best examples of symbiosis is that between the hermit crab and the sea anemone. The sea anemone is attached partly to the shell that the crab inhabits and partly to the crab’s shell. The crab is protected from predators by the stinging cells of the anemone, while the anemone is transported by the crab and so has a greater chance of finding food. It is the same with hybridization.

Firms form symbiotic arrangements and enter into a network of interdependence. They hybridize to form strategic alliances and partnerships to share supplies and organizational strategies. Other reasons why firms hybridize: to have a better reallocation of resources and to gain knowledge in addition to the reasons stated here.

Hybridization of firms has been around for decades in an unobtrusive corner of economics. Hybridization is beneficial particularly to these small, atypical firms because it creates opportunities that these firms would have not experienced had they remain as single entities. Not every firm is large and has a production line that makes a significant contribution to national GDP. Also, not every firm conforms to the norm of classroom market economy. These are our atypical firms like the French millers. If nothing else, the process ensures the survival of the firm.

These reasons substantiate the need for our ANSPs to consider strategic alliances and symbiotic arrangements with other ANSPs. Like the millers, they face the problem of closing Towers due to sequestration in the West and the pressure to form partnerships in the East. Recently ANSPs globally came under fire for lack of organizational progress.

Our ANSPs qualify for hybridization because they are small atypical firms that do not have a production line and they certainly do not conform to the textbook rules of economic lemmas but they can benefit in principle. For ANSPs, hybridization provides an opportunity to raise the bar of functional equality and the opportunity to invest their key asset: the social resources – the human factors.

* Special thanks to Professor Claude Ménard (Université de Paris 1 Panthéon Sorbonne) who provided the source material on economic hybridization. The material came from his chapter in a book edited by Robert Gibbons and John Roberts - The Handbook of Organizational Economics, Princeton University Press, Princeton and Oxford, 2012

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