A framework has been developed based upon concepts drawn primarily from organization theory and small group research. Emphasis has been placed upon the response of libraries to their environments. The library "stakes out claims" or establishes domains with regard to resources, users, and policies. Libraries then seek to have the environment acknowledge the validity of these claims. This process of establishing "domain consensus" is a critical activity of organizations and is a prerequisite for the formation of cooperatives. Contributions from the theory of coalition formation were utilized in order to conceptualize the process of library cooperative formation. Interaction between organizations has been viewed as an exchange system into which libraries enter becuase they expect to receive benefits in exchange for the resources they contribute. Two aspects of the exchange system were considered. The process of formation was examined, followed by an examination of some variables which affect the policies and performances of established systems. Tables 1 and 2 summarize the parameters and the manner in which each paramater affects the system. (Author)