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Sustainability and Stakeholder Value Creation: A Coopetition Perspective
MASTER THESIS
Submitted in Partial Fulfillment of the Requirements for the Degree of
MASTER OF SCIENCE
in Strategic Management
Univ.-Prof. Dr. Kerstin NEUMANN
Department of Strategic Management, Marketing and Tourism
The University of Innsbruck School of Management
Submitted by Lukas WINKLER
Innsbruck, May 2019
Abstract The phenomenon coopetition plays a significant role when business firms in the same industry
face a common challenge such as solving socio-environmental issues or fostering stakeholder-
oriented value. However, in the existing coopetition literature, the examination for this specific
concern remains still scarce on both the theoretical and empirical level. For the purpose of
narrowing this gap, the aim of this thesis is to integrate the phenomenon of coopetition into the
sustainability literature, which includes the concept of stakeholder value creation. In this
context, the thesis developed a multidimensional framework that extends the understanding of
managing and balancing competition and cooperation to foster stakeholder-oriented value
creation. The results categorize four different dimensions, which are essential for stakeholder-
oriented value creation in coopetition. These concern inter-organizational proximity, syncretic
rent-seeking behavior, collaboration style for conflict management, and socio-environmental
value. The findings indicate that by acknowledging and adopting the mentioned categories in a
coopetitive partnership, competitors have an increased probability of successfully establishing
industry initiatives for sustainability.
Keywords: Coopetition, Sustainability, Stakeholder-oriented value creation, Cooperation,
Inter-organizational proximity, Syncretic rent-seeking behavior, Collaboration
style for conflict management, Socio-environmental value
I
Table of Content
List of Figures .................................................................................................................... III
List of Tables ..................................................................................................................... IV
1. Introduction ..................................................................................................................1
1.1. Problem Description ...............................................................................................2
1.2. Research Objective .................................................................................................3
2. Sustainability ................................................................................................................4
2.1. Industry Initiatives for Sustainability .......................................................................5
2.2. Stakeholder Value Creation in Sustainability...........................................................6 2.2.1. Stakeholder Orientation ...................................................................................7 2.2.2. Stakeholder Value ...........................................................................................9
3. Coopetition .................................................................................................................. 12
3.1. Theoretical Foundations of Coopetition................................................................. 13 3.1.1. The Resource-Based View ............................................................................ 13 3.1.2. Game Theory ................................................................................................ 14
3.2. Cooperation and Competition ................................................................................ 18 3.2.1. Relationships in a Business Network ............................................................. 18 3.2.2. Dynamic Nature of Cooperation and Competition ......................................... 20 3.2.3. Typologies of Coopetition ............................................................................. 23
3.3. Inter-Organizational Orientation in Coopetition .................................................... 25 3.3.1. Motives for Coopetition ................................................................................ 25 3.3.2. Strategic Rent-Seeking Behavior ................................................................... 26 3.3.3. Coopetition and the Role of Proximity........................................................... 32 3.3.4. Success Factors of Coopetition ...................................................................... 34
3.4. Coopetition Management ...................................................................................... 35 3.4.1. Situational Tactics between Global Rivals ..................................................... 36 3.4.2. Coopetitive Tensions and Conflict Management ............................................ 39 3.4.3. Value Dynamics in Coopetition ..................................................................... 44
4. Stakeholder-Oriented Value Creation in Coopetition ............................................... 48
4.1. Significance of Inter-Organizational Proximity in Coopetition .............................. 49
4.2. Adaptation of Syncretic Rent-Seeking Behavior .................................................... 51
4.3. Adaptation of Collaboration for Conflict Management .......................................... 55
4.4. Importance of Socio-Environmental Value ............................................................ 57
II
5. Conclusion ................................................................................................................... 59
5.1. Discussion and Theoretical Contribution .................................................................... 59
5.2. Managerial Implications ............................................................................................ 62
5.3. Limitations and Future Research ................................................................................ 65
References ........................................................................................................................... 67
III
List of Figures
Figure 1: Conceptual framework of coopetition performance................................................ 14
Figure 2: The value net model .............................................................................................. 17
Figure 3: Relationships between competitors ........................................................................ 19
Figure 4: Competition – Cooperation relationship................................................................. 20
Figure 5: Rent-seeking strategic behavior ............................................................................. 27
Figure 6: Coopetition success factors .................................................................................... 34
Figure 7: Situations and situational tactics in coopetition ...................................................... 36
Figure 8: Conflict management styles ................................................................................... 42
Figure 9: Multidimensional framework of stakeholder-oriented value creation in coopetition
............................................................................................................................. 48
IV
List of Tables Table 1: PARTS model - coopetition elements ..................................................................... 16
Table 2: Typologies of coopetition ....................................................................................... 23
Table 3: Value appropriation ................................................................................................ 45
Table 4: Types of value ........................................................................................................ 45
Introduction
1
1. Introduction
“The issues we face are so big and the targets are so challenging that we cannot do
it alone, so there is a certain humility and a recognition that we need to invite other
people in. When you look at any issue, such as food or water scarcity, it is very clear
that no individual institution, government or company can provide the solution.”
Paul Polman, CEO of Unilever (Confino, 2012)
Nowadays, the worlds’ population face societal grand challenges that require coordinative
actions to be solved (George, Howard-Grenville, Joshi, & Tihanyi, 2016). Due to the rise of
globalization, population growth, and the continuous exploitation of natural resources, it is of
prime importance to take grand challenges seriously. George et al. (2016, p. 3) define grand
challenges as “specific critical barrier(s) that, if removed, would help solve an important
societal problem with a high likelihood of global impact through widespread implementation”.
That is why the United Nations (2015) manifested seventeen sustainable development goals in
order to solve global grand challenges. These goals are associated with, for example, poverty,
climate change, or environmental degradation. Notably, the last goal, “partnership for the
goals” sheds light on a problematic domain that encourages closer examination. This goal
covers, among other things, systemic issues and appeals multiple stakeholders to enhance
global partnerships. In global partnerships, multiple stakeholders can mobilize and share their
knowledge, expertise, and technological resources towards the achievement of sustainable
development goals (United Nations, 2015).
In the global economy, business firms constitute vital players that affect and are affected by
sustainability issues. Business firms exploit the worlds’ natural resource base and transform
them into products as well as pollution affecting the human environment (Imperatives, 1987).
Therefore, a critical viewpoint rests on business firms and their involvement in this dilemma,
managing their actions towards sustainability (Christ, Burritt, & Varsei, 2017). More
specifically, business firms are appealed to take a critical role in tackling societal grand
challenges by conceiving sustainable development as a common goal (Christ et al., 2017).
Conversely, an increasing number of firms have concerns about sustainability issues and are
trying to accomplish not only economic but also social and environmental benefits. As a result,
it is evident that some businesses already acknowledge the importance of changes in
sustainability (Porter & Kramer, 2011).
Introduction
2
For instance, Unilever with its tea brand Lipton collaborated with the Rainforest Alliance
certification and enabled to mainstream sustainability in their tea production. Initially, Lipton,
as a global player in the tea industry, recognized the growing concern of its consumers for
sustainability in the key markets and used its new strategic resources as a competitive
advantage. However, after successfully implementing their initiative, the other major
competitors climbed on the bandwagon and also certified their tea production with the
Rainforest Alliance certification. As a consequence, Liptons’ revitalizing strategy for the
supply chain was an important trigger that sustainably transformed the entire tea industry
(Braga, Ionescu-Somers, & Seifert, 2011).
This business case suggests that industry-wide initiatives can have great potential for a globally
noticeable sustainable impact and give response to societal grand challenges. Nevertheless, it
is almost impossible for one company to undertake this mission on its own. This is the reason
why sustainable development should be seen as a common multi-actor problem and not as an
individual action (Imperatives, 1987). Volschenk, Ungerer, and Smit (2016) suggest that for
initiating a sustainable impact, effective collaboration between different stakeholders is needed.
Correspondingly, in order to react on global grand challenges, coordination and collaboration
between business firms and multiple stakeholders are requirements for managing these
challenges and cannot be solved in isolation (Ferraro, Etzioni, & Gehman, 2015; George et al.,
2016; Imperatives, 1987).
1.1. Problem Description Based on literature, business firms have various opportunities for implementing an industry
initiative. Firms can cooperate with many stakeholders such as suppliers, customers,
government, or public institutions (Clarkson, 1995). Active cooperation with proximal
stakeholders is also crucial for a focal firm’s survival. Notwithstanding, the most effective way
for initiating an industry-wide “cleaning” rests most likely on the cooperation among
competitors because these actors can have the biggest impact on the respective industry. One
of the fundamental problems for such an implementation is on the difficulty of this kind of
relationship as cooperation between competitors is by nature conflicting (Chen, 2008).
Academic research suggests that there already exist specific forms of cooperation between
competitors, for example, research and development consortia or sharing manufacturers
(Dagnino, 2009). In this context, two or more competitors put their strengths together in order
to strive for the achievement of a common goal, while they are usually competing in another
Introduction
3
part of the value chain. The successful management of a competitor’s collaboration can result
in benefits for each partner and their stakeholders involved. Though, such an agreement also
involves a significant risk of failure. Several studies highlight that more than half of all strategic
alliances fail (Bleeke, Ernst, & Ernst, 1993; Kogut, 1994; Kale, Dyer & Singh, 2002). This high
failure rate is due to the fact that companies lack in knowledge and experience of the dynamic
nature of an alliance, which simultaneously involves competition and cooperation (Russo &
Cesarani, 2017). In that case, competitors face the challenge to achieve and maintain successful
cooperation collectively. As a consequence, the overall question for management and academic
research arises if the likelihood of a successful competitor’s collaboration can be encouraged
by the improvement of sustainability issues.
1.2. Research Objective Since the last two decades, there has been an increasing trend in scientific research to focus on
the specific phenomenon called “coopetition”, which is the simultaneous cooperation and
competition between business firms (Bengtsson & Kock, 2000). In a coopetitive partnership,
the involved actors strive for achieving advantages from the competition and the cooperation
side which can lead to overall value creation, awarding multiple stakeholders (Christ et al.,
2017; Cygler, Sroka, Solesvik, & Debkowska, 2018; Limoubpratum, Shee, & Ahsan, 2015;
Ratten, 2018; Rusko, 2011). Although coopetition can be described as a multilateral and
multifaceted construct, coopetition may represent a set-up plan for managing a successful
partnership that involves multiple stakeholders in order to achieve common sustainable
development goals. Consequently, the thesis investigates the construct of coopetition and how
a cooperative competition between competitors can foster stakeholder-oriented value creation
in order to help solving societal grand challenges.
By considering the arguments mentioned earlier, this conceptual work addresses this research
gap by answering the following question:
How can coopetition be managed and balanced to foster
stakeholder-oriented value creation?
Sustainability
4
2. Sustainability Sustainability can be defined as the “development that meets the needs of the present while
safeguarding Earth’s life-support system, on which the welfare of current and future generations
depends” (Griggs et al., 2013, p. 306). From an economic perspective, the idea of sustainability
demonstrates the rising expectations of business firms to raise their social and environmental
engagement. Nonetheless, there is still a large number of firms which view sustainability as a
costly business activity and represents a “necessary evil to maintain legitimacy and the right to
operate” (Hart & Milstein, 2003, p. 56). Therefore, global capitalism has been criticized for
neglecting vital cultural and environmental factors in the global economy (Nye Jr, 2001).
Similarly, Porter and Kramer (2011) criticized and questioned the current capital system
because it neglects societal challenges and needs. The authors further suggest that companies
thrive for economic success at the costs of the broader community. For decades, a fundamental
problem has been resting on business firms and their obsolete approach of value creation (Hart
& Milstein, 2003). Firms mainly create value by focusing on the financial outcome and gaining
quick results while they are missing out specific customer needs and neglect further aspects that
affect their long-term success. As a result, companies are appealed to take back the reins and
create shared value that concerns business and society (Porter & Kramer, 2011). In this context,
the main focus lies on aligning business firms with society and the natural environment in order
to manage their interconnected relationship towards a long-term existence (Assembly, 2015).
The implementation of sustainability initiatives goes beyond enhancing legitimacy and
reputation for a firm, but may also speed up innovation, encourage repositioning, reduce risk
and costs, and consolidate growth path and trajectory (Hart & Milstein, 2003). Several
companies such as Google, Intel, Johnson&Johnsen, Nestlè, Unilever, and Walmart have
already shown sustainable initiatives by managing more significant innovation and growth not
only in the society but partially in the industry (Porter & Kramer, 2011).
Business firms can address sustainability issues by focusing on societal needs of their
stakeholders that reflect in products and markets, such as nutritious food or less environmental
damage. Moreover, firms can focus on redefining their productivity in the value chain, which
includes, for example, health and safety standards. Furthermore, companies can address
sustainability issues by enabling cluster developments (for instance, standard organizations or
trade organizations) (Porter & Kramer, 2011).
Sustainability
5
After introducing and providing a first notion of the concept of sustainability, the chapter
continues with examining industry initiatives for sustainability and the relevance of establishing
sustainability standards.
2.1. Industry Initiatives for Sustainability In academic research, an increasing concern of “greening” an industry has been widely
recognized in the 1990s (Fischer & Schot, 1993). In particular, the word “greening” derives
from a “green economy” which defines an economy that “results in improved human well-
being and social equity, while significantly reducing environmental risks and ecological
scarcities” (UNEP, 2011, p. 2). Despite the economic values of industries, industrialization has
caused substantial pollution loads and ongoing exploitation of natural resources (Hunter
Lovins, Lovins, & HAWKEN, 1999). As a consequence, a growing interest has been perceived
in how the private sector can establish new approaches, strategies, and systems to manage social
and environmental problems by, for example, raising standards (Welford, 2014).
In general, standards can be defined as “agreed criteria by which a product or service’s
performance, its technical and physical characteristics, and/or the process, and conditions,
under which it has been produced or delivered, can be assessed” (Nadvi & Wältring, 2002, p.
6). Most of the available research focuses on mandatory public standards in developed countries
(designated as governmental regulations), whereas less attention was given to voluntary
standards (Giovannucci & Ponte, 2005).
In contrast to mandatory public standards, voluntary standards are established, adopted, and
monitored by private bodies or business firms (Henson & Humphrey, 2010). More precisely,
voluntary standards are located in the private sector and play a significant role in fostering a
green economy. Hence, business firms can form coalitions with other businesses for setting a
standard (Potts, Lynch, Wilkings, Huppé, Cunningham, & Voora, 2014).
In the last decade, sustainable practices, inferred from societal demands, have been
implemented and influenced private sector activities (Potts et al., 2014). In light of this,
voluntary sustainability standards gained increased recognition and have enjoyed a fast-
growing market value (Giovannucci & Ponte, 2005). What is more, Potts et al. (2014) indicate
that a growing number of companies getting integrated into standard-setting and
implementation processes. Companies form voluntary sustainable standards in order to provide
certifications for products or production services, label definition, or the setting of codes of
conduct (Giovannucci & Ponte, 2005). Besides, each initiative tends to pursue an ethical
philosophy, which is defined beforehand in the standard-setting process (Potts et al., 2014).
Sustainability
6
From an industrial perspective, especially in the commodity markets, organizations have
successfully established a wide range of sustainability standards which have a global presence
and record a growing standard-compliant production, for example, for coffee, forestry, tea or
cotton (Potts et al., 2014). Global present initiatives include the 4C Association, ProTerra,
Bonsucro, Fairtrade, Rainforest Alliance, to name a few (Potts et al., 2014). Some of these
initiatives were initially induced by industry-led dialogue and cooperation of multiple
stakeholders (for instance, Bonsucro).
Voluntary sustainability standards can be formed and coordinated by key players in the industry
who search for consensus and mutual business opportunities (Giovannucci & Ponte, 2005).
Such initiatives represent a potential pre-competitive venue that brings competitors together in
order to preserve public resources or to collectively create new markets (Potts et al., 2014).
However, a well-known reason for market failure is that competitors are unable to collectively
plan or take actions for the purpose of maximizing benefits for all actors involved. They instead
make self-interest decisions individually for maximizing their benefit, which in turn, results in
a consistent overuse of resources and a decreased social welfare (Hardin, 1986). A possible
solution for this issue is to find a so-called “Nash equilibrium”, in which competitors elaborate
an optimal strategy that results in a situation where every involved player is better off (Nash,
1950; 1951). However, the implementation for such initiatives largely depends on the
commitment of each involved player and the established rules for the standard system (Potts et
al., 2014).
So far, the thesis has described sustainability in the global economy and the importance of
sustainability initiatives in industries. In that regard, sustainability initiatives are induced by
multiple stakeholders (Potts et al., 2014). Therefore, the following subsection investigates in
the subject matter of stakeholders and the creation of stakeholder value in more detail.
2.2. Stakeholder Value Creation in Sustainability
Several studies suggest that the role of business firms includes responsible actions by focusing
on a wide range of interest groups into their corporate strategies (Agle, Donaldson, Freeman,
Jensen, Mitchell, & Wood, 2008; Freeman, 1984; Mitchell, Agle, & Wood, 1997). In this thesis,
stakeholder value creation is subdivided into stakeholder orientation and stakeholder value.
That is why the following subsections take a closer examination on both classifications.
Sustainability
7
2.2.1. Stakeholder Orientation The responsible behavior of firms describes a stakeholder orientation, in which focal firms take
the issues of their stakeholders into account (Heikkurinen & Bonnedahl, 2013). A focal firm
has constant relationships with customers, suppliers, and is also a performer to other actors
(Araujo, Dubois, & Gadde, 2003).
Stakeholder orientation does not mean to separate economic and other responsibilities of a firm
but instead merge them (people-planet-profit) through its stakeholders (Freeman, Harrison,
Wicks, Parmar, & De Colle, 2010). In contrast to traditional business, stakeholder orientation
arises as an alternative approach in terms of ethics and responsibility (Heikkurinen &
Bonnedahl, 2013). According to Carroll (1991, p. 41), ethical responsibility represents
“standards, norms, or expectations that reflect a concern for what consumers, employees,
shareholders, and the community regard as fair, just, or in keeping with the respect or protection
of stakeholders’ moral rights.” In other words, a business firm can integrate social and
environmental issues in its business activities when they engage and interact with its
stakeholders (Heikkurinen & Bonnedahl, 2013). Furthermore, network literature and
stakeholder literature repeatedly suggest that firms, who take stakeholder interests into account,
end up with a higher business performance than firms with conflicting views toward
stakeholders’ interests (Dyer & Singh, 1998; Freeman, 1984; Freeman, Martin, & Parmar,
2007).
The origin of stakeholders emerged from the strategic management literature (Rhenman, 1968)
and evolved afterwards in a stakeholder orientation or stakeholder approach (Freeman, 1984;
Freeman, 2010). The definition of stakeholders refers to those groups or individuals “who can
affect or is affected by the achievement of the organizations’ objectives” (Freeman, 1984, p.
46).
In this respect, Freeman et al. (2010) classified between primary or secondary stakeholders.
Primary stakeholders constitute those stakeholders viewed from a narrow-angle, which include
customers, employees, local communities, suppliers, and financiers. Whereas, secondary
stakeholders include all stakeholders in a broader sense, such as competitors, government, non-
governmental organizations, union leaders, consumer advocate groups, special interest groups,
and the media (Freeman et al., 2010).
For each business firm following a stakeholder orientation, it is vital to focus on stakeholders
who promote and positively influence its business operations, instead of those who undermine
the achievement of its organizational objectives (Heikkurinen & Bonnedahl, 2013). Mitchell et
al. (1997) suggest three different attributes to identify “salient” stakeholders, which are power,
Sustainability
8
legitimacy, and urgency. This approach supports business firms to differentiate between
stakeholders who are critical for the achievement of their organizational objectives
(Heikkurinen & Bonnedahl, 2013).
Driscoll and Starik (2004) extend this view by adding on proximity as a further attribute of
stakeholder salience. The authors argue that the role of proximity (spatial distance to the
stakeholders) is as important as the time aspect, which refers to as stakeholders’ urgency
(Mitchell et al., 1997). The academic literature suggests that proximity relates to the business
variable relatedness (Tsai, 2000) or the concept of stakeholder networks (Heuer & Starik,
2002). Driscoll and Starik (2004) point out that spatial nearness plays a vital role for business
firms to recognize and interact with stakeholders. Additionally, the authors claim that the
greater the proximity, the higher the probability of developing stakeholder relationships and
vice versa. Not only physical proximity, but also cognitive proximity matters in the case that
organizations share similar ideas, approaches, and actions (Bansal & Roth, 2000).
For instance, business firms in the same industry acknowledge themselves as dependent or
proximate stakeholders because of their integration into the same or allied industry associations.
Moreover, proximate stakeholders have a close connection to a firm’s shared value chain and
include those organizations, which are shared by firms or those, who consider themselves as
buyer or suppliers of a firm. Besides, proximity describes the affinity organizations may have
for one another in terms of complementary missions, strategies, structures, resources or
organizational members. Another criterion that applies for proximity refers to the concept of
ubiquity, in which stakeholders are virtually omnipresent, and the reciprocal co-existence
between a firm and its stakeholders represents proximity. Thus, the concept of ubiquity is
especially relevant to perceive the natural environment as primordial stakeholder (Driscoll &
Starik, 2004).
Those stakeholders, who are essential for the growth of sustainability, such as the poor or the
natural environment, are most likely less salient than other stakeholders (Hart & Sharma, 2004).
In turn, several non-governmental organizations successfully acted as active counterparts who
give a voice to sustainability-related stakeholders by creating uprising about sustainability
concerns around businesses (Heikkurinen & Bonnedahl, 2013).
According to Heikkurinen and Forsman-Hugg (2011), a firm can add responsibility by adopting
a stakeholder orientation through either applying a responsive approach or by applying a
beyond responsive approach.
Firms which apply a responsive approach can use appropriate organizational capacities to react
to already existing demands of relevant stakeholders and take actions to upcoming changes in
Sustainability
9
the market. Such initiatives include, for instance, the adaptation of higher labor standards or
considering renewable energy, which, in turn, may enhance the achievement of organizational
objectives (Heikkurinen & Forsman-Hugg, 2011).
In contrast, firms that apply a beyond responsive approach can create new stakeholder demands,
which, in turn, transform the market. Initiatives of a beyond responsive approach include, for
example, cleaner production. This approach encourages firms to find new and innovative
solutions in business operations in order to take responsibility (Heikkurinen & Bonnedahl,
2013). In conclusion, firms with a solid stakeholder orientation can generate additional value
for stakeholders by adopting a responsive or beyond responsive approach and thus, contribute
to the improvement of sustainability issues (Heikkurinen & Bonnedahl, 2013).
After analyzing the responsible behavior of a firm or stakeholder orientation, the next section
explores stakeholder value in more detail.
2.2.2. Stakeholder Value According to Harrison and Wicks (2013, p.100), the definition of value can be generally
understood as “anything that has the potential to be of worth to stakeholders.” In this context,
the received value depends on the utility of how stakeholders can make use of it in their utility
function. In line with the firm’s multi-stakeholder approach of Freeman (1984), a firms’
performance describes “the total value created by the firm through its activities, which is the
sum of the utility created for each of a firm’s legitimate stakeholders” (Harrison & Wicks, 2013,
p. 102). Therefore, legitimate stakeholders refer to those groups a firm has an obligation to and
which regular cooperative participation constitutes an ongoing issue (Phillips, 2003).
Legitimate stakeholders mainly refer to stakeholders in the narrow sense which are customer,
suppliers, and the communities, in which a firm operates (Harrison & Wicks, 2013). However,
it depends on each situation how legitimate or salient stakeholders are perceived (Driscoll &
Starik, 2004). In addition, it is essential to identify specific aspects that are vital to stakeholders
(Spiller, 2011). Harrison and Wicks (2013) state that the perception of stakeholder value can
be evaluated by a stakeholders’ utility function and can be categorized in four different ways:
Þ Stakeholders’ utility associated with real goods and services
Þ Stakeholders’ utility associated with organizational justice
Þ Stakeholders’ utility from affiliation
Þ Stakeholders’ utility associated with perceived opportunity costs
Sustainability
10
The first category refers to stakeholders’ utility that can be perceived in the form of real goods
and services. The stakeholder value in this utility function indicates the most transparent one
because the exchange of goods and services include immediate financial compensation
(Harrison & Wicks, 2013). In this case, Barney (2011) argues that some of a created value
include time and effort, which represent a degree of uncertainty how a purchase reflects in the
expected level of utility. Conversely, the financier expects an appropriate return of its
investment.
The second category relates to stakeholders’ utility that is associated with organizational justice,
which involves a firms’ respect, fairness, and reciprocation to stakeholders (Cropanzano &
Mitchell, 2005). Organizational justice concerns reciprocal exchanges, in which the value
creation is handled fairly (Simon, 1966). Especially, when multiple stakeholders are involved
in the value creation process, the interdependence between the actors has a significant influence
on the relationship and their outcome (Ekeh, 1974).
Concerning the third category, stakeholder utility derives from the affiliation with other
organizations. Therefore, the social identity theory identifies organizations in social categories
and their association with others (Ashforth & Mael, 1989). A positive relation towards others
reflects valuable connectedness and empowerment (Hogg & Turner, 1985). Affiliation with
other organizations can also foster a common interest between different stakeholders (Putnam,
2000). More precisely, Hartman and Phillips (2011) point out that affiliation can encourage
collective action for a common good that leads to a win-win situation, in which all involved
stakeholder benefit.
The last category to perceive stakeholder utility pertains to the opportunity costs and the
interconnectedness of the above-mentioned categories. In that case, the perception of
stakeholder utility depends on the stakeholders’ belief that the trade they have made is almost
equally valuable than if they have made a similar trade with other organizations. Thus, the
categories, as mentioned above, overlap to some extent. For instance, the degree of justice
influences organizational affiliation, whereas the value of goods and service influences the
perception of justice. In that sense, Susniene and Vanagas (2006) highlight that a business firm
is in the center of a network with other stakeholders, whose behavior is partially shaped by the
firm’s way of treatment.
This chapter starts by introducing sustainability and suggesting that business firms in the global
economy are appealed to align their operations with societal concerns. It is followed by
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11
indicating that this can be established among other things through industry initiatives for
sustainability. Especially, competitors play a significant role in establishing such initiatives and
henceforth, may create a path towards a green economy. What is more, the section explains the
importance of stakeholder value creation and points out that a firm’s strong stakeholder
orientation leads to better performance (Dyer & Singh, 1998; Freeman et al., 2007; Freeman et
al., 2010; Harrison & Wicks, 2013). In the end, it describes stakeholder value and how
stakeholders of a firm perceive value in their utility function (Harrison & Wicks, 2013).
The next part investigates in the collaboration between competitors and hence, introduces the
phenomenon of coopetition. Moreover, the chapter analyzes different approaches on how to
manage and balance a cooperative relationship between competitors.
Coopetition
12
3. Coopetition Coopetition is an etymologic combination of cooperation and competition. The underlying
assumption of coopetition is that both concepts, cooperation, and competition, are distinctive
but not mutually exclusive (Bengtsson & Kock, 2000). Therefore, when properly managed,
competitors can source advantages from both cooperation and competition.
There are few discussions in academic literature about the origin of the term coopetition. On
the one hand, the origin of coopetition can be traced back to 1913, when Kirk S. Pickett first
recognized “Co-opetition” in the Sealshipt Oyster system as the idea of cooperative competition
(Cherington, 1913; Smith & Vogel, 2010). In this case, dealers in the system also cooperated
with their competitors to strengthen their own business. The authors described a competitor as
equal to the “oyster sold from the wooden tub” (Cherington, 1913, p. 144) in order to shed light
on more business opportunities than just to compete. Although it is not documented, it implies
that cooperative competition between competitors can create value for the whole market (Della
Corte & Aria, 2016).
On the other hand, several researchers claim that the term relates back to 1980, when Ray
Noorda, Chief Executive Officer of Novell, was the first person who believed in the philosophy
of coopetition and shaped its companie’s value system by the simultaneity of competition and
cooperation (Dagnino, 2009; Lado, Boyd, & Hanlon, 1997; Nalebuff, Brandenburger, &
Maulana, 1996; Walley, 2007).
In the mid-1990s, Nalebuff et al. (1996) set one of the first milestones to embrace the
phenomenon in academic research. In this study, coopetition is pictured as collectively
cooperate for creating a large business pie and afterwards, competing for the biggest slice of it.
Lado et al. (1997) describe coopetition as a situation, where two or more business firms
simultaneously having competitive and cooperative intentions, whereas Padula and Dagnino
(2007) define coopetitive partnerships as situations when firms are interacting among each
other based on a partially convergent interest structure.
Coopetition is also illustrated as a unique mindset which enables companies to tap into “blue
oceans”, which is associated with redefining or creating new markets and find innovative
solutions, while facing the struggles in the existing industry or so-called “bloody red ocean”
(Chin, Chan, & Lam, 2008; Kim & Mauborgne, 2006). From a more practical view, firms most
likely coopete in the industry for value creation by competing on product or factor markets,
while they are simultaneously cooperating in areas such as product design, manufacturing or
distribution and the definition of new standards (Padula & Dagnino, 2007).
Coopetition
13
After analyzing the origins of the term coopetition and providing a first notion of the
phenomenon, the following subsections explain the theoretical foundations on coopetition.
3.1. Theoretical Foundations of Coopetition Academic scholars and researchers have been analyzed coopetition from different theoretical
viewpoints such as the transaction cost theory (Ritala & Hurmelinna-Laukkanen, 2009),
organization/strategic learning (Luo, Slotegraaf, & Pan, 2006), network theory (Gnyawali, He,
Madhavan, 2006; Tsai, 2002), institutional economics (Mione, 2009) or resource dependency
theory (Oum, Park, Kim, & Yu, 2004). Notwithstanding, with regard to the research question
of this thesis “How can coopetition be managed and balanced to foster stakeholder-oriented
value creation?”, coopetition is constructed by the resource-based view and the game theory
approach which are examined in the following subsections.
3.1.1. The Resource-Based View The resource-based view arises from the literature of strategic management and addresses
economic orientations, scientific approaches, and strategic behavior. The underlying
assumption of the resource-based view is that companies possess unique assets and resources
representing a competitive advantage, which ensure its effective and efficient use in an unstable
and changing environment (Markiewicz & Adamus, 2012). The heterogeneity between firms
originates from their resource profiles and that these resources cannot wholly be transferred
across the firms (Barney, 1991). As a result, the market success of a firm depends on its acquired
resources (tangible or intangible) and its differentiation to competitors (Markiewicz & Adamus,
2012).
Applying the resource-based view on coopetition, to cooperate with competitors does not
merely include financial capital, but can also be sourced through fixed assets such as research
facilities, manufactures, competent employees or their knowledge (Markiewicz & Adamus,
2012). From a more contextual view, an analysis of different organizational relationships and
activities may provide clarification where coopetition remain suitable in the value chain.
In order to understand coopetitive dynamics, Chen (1996) analyzed competitive dynamics and
argues that it derives from two factors – market commonality and resource similarity. Market
commonality refers to a competitor’s presence in the market and analyzes to what extent its
operations overlap with those of the focal firm. Whereas, resource similarity describes the
degree of a competitor’s strategic resources compared to those of the focal firm (Chen, 1996).
Coopetition
14
From this perspective, each business firm has a unique market profile and resource
endowments. Hence, both factors allow firms to draw comparisons towards each other, which
might help them to determine how they interact in the market (Chen, 2008).
Peng, Pike, Yang, and Ross (2012) adapt this perspective, in which they suggest that both
factors of competitive dynamics link to coopetitive dynamics (Figure 1). In this case,
cooperation refers more to resource similarity, whereas competition contributes more to market
commonality (Luo, 2007; Osarenkhoe, 2010). Cooperation and competition are essential
elements of a firm’s overall strategy. That is why market commonality and resource similarity
represent the cornerstone of coopetition dynamics and result in an overall improvement of the
performance, at least for a temporary period (Peng et al., 2012).
Figure 1: Conceptual framework of coopetition performance (Peng et al., 2012, p.536)
Nevertheless, achieving substantial growth and long-term success is only possible with a
sustained competitive advantage which arises from valuable, rare, inimitable, and non-
substitutable resources (Barney, 1991). The resource-based view implies that the focus of
coopetition is on achieving competitive advantage and managing scarce resources which cannot
be developed individually (Della Corte & Aria, 2016). This leads to the assumption that
coopetitive partnerships could help to assess firms’ resources and identify deficiencies that
could be complemented through cooperation (Markiewicz & Adamus, 2012). As a
consequence, a firm’s competitive advantage can also include tacit, inimitable cooperative
partnerships with and the success of its coopetitors (Quintana-Garcia & Benavides-Velasco,
2004).
3.1.2. Game Theory From a management perspective, game theory investigates in inter-organizational strategies for
situations, in which there is the possibility of a cooperation equilibrium (or failure) evoked by
the mutual interactions between the involved players (Nowak, Sigmund, & Leibowitz, 2000).
The game theory approach enables investigations in imperfect market situations which
Coopetition
15
generally contains a small number of players, incomplete contracts, limited information,
covered actions or the situations for opportunistic moves (Nowak et al., 2000).
Lado et al. (1997) criticized the game theory approach of being too “Machiavellian” because it
highlights opportunism as a critical understanding of structuring and managing inter-firm
collaborations. Nevertheless, the game theory suggests to find win-win opportunities with
competitors and avoid destructive strategic behaviors but emphasize on gaining mutual
advantages (Quintana-Garcia & Benavides-Velasco, 2004).
In most coopetition studies, the game theory is associated with different scenarios such as the
prisoner’s dilemma or the stag hunt, involving two actors (Ritala & Hurmelinna-Laukkanen,
2009). However, the focus here rests on coopetition with multiple actors. In this context, a
social dilemma provides a better perspective on coopetition in order to analyze strategic
interactions between several partners. More specifically, the social dilemma approach may
represent a better understanding of the challenges that intra-industry competitors face while
managing a coopetitive agreement (Zeng & Cheng, 2003).
A social dilemma represents a situation, in which rational actors form an alliance and need to
decide whether they want to cooperate for maximizing mutual benefits or they want to defect
in order to concentrate on gaining private benefits. The essential characteristic of a social
dilemma describes the conflict between the individual and collective rationality (Zeng &
Cheng, 2003). When the involved actors collaborate unified, then all players benefit. When
only one player acts opportunistically, then the player gets a higher payoff automatically,
because multiple parties put value in the agreement. Whereas, when all players act in their self-
interest it will turn out worst for them (Dawes, Van De Kragt, & Orbell, 1988).
Zeng and Cheng (2003) suggest that a social dilemma is more difficult to manage than a
prisoner’s dilemma because of three crucial distinctions. Firstly, it is more tempting for a
partner to act non-cooperative and defect in multi-partner coopetition, because the initiated
harm will be allocated to several players and not compress to only one party. Secondly, the
uncertainty in multi-partner coopetition is higher than in a two-party situation. Consequently,
it is harder to determine which partner is responsible for detection. Thirdly, in a two-person
dilemma, each player can assess the other players’ contribution based on his or her actions and
thus, include rewards and/or punishment for the counterparty. For a multi-partner coopetition,
this means that the influence potential is mitigated which describes a lack of controllability over
the partners’ behavior (Zeng & Cheng, 2003).
The social dilemma implies that behaving opportunistic seems to be more beneficial for each
actor. However, the game theory approach may shed light on where firms in an industry have
Coopetition
16
to interact with competitors strategically and where they can find win-win situations for all
partners involved. Drawing from the underlying assumption that each party put in little and can
gain much out of the agreement, opportunistic moves downgrade the foundation of partner
cooperation and may lead to value destruction (Zeng & Cheng, 2003).
Nalebuff et al. (1996) advices actors to detect win-win situation in such a dilemma. In general,
win-win strategies in coopetition are beneficial because they lead to less resistance and do not
pressure competitors to give up ground. In addition, a win-win move is more sustainable and
does not force competitors to retaliate. Another reason is that imitation of a win-win action is
advantageous, not harmful (Brandenburger & Nalebuff, 1995). Thus, the identification of an
appropriate coopetition strategy may lead to a sustained competitive advantage for all players
involved.
For achieving a proper mindset in a coopetitive partnership, it requires a specific technique such
as out-of-the-box thinking (Nalebuff et al., 1996). By considering competition and cooperation
simultaneously, Nalebuff et al. (1996) identified five critical elements of the game (Table 1).
These five elements are players, added value, rules, tactics, and scope.
PARTS Model
Players Added value Rules Tactics Scope
Table 1: PARTS model - coopetition elements based on Nalebuff et al. (1996, p. 33)
Players refer to the competitors in the network who collectively create a bigger business pie
and hence, receive added value. Rules and tactics are considered for the players to strategically
“looking forward and reason backward” depending on the competitors’ moves (Brandenburger
& Nalebuff, 2002, p. 274). The scope includes the volume of the game and the linkages through
players, added values, rules, and perceptions (Nalebuff et al., 1996). Coopetitors must be aware
of all PARTS, and if necessary, they need to align or change some elements during the
partnership because of different factors, as the entrance of a new player or an increase of the
scope.
Furthermore, Nalebuff et al. (1996) introduced the Value Net Model (illustrated in Figure 2),
which shows possible players within a coopetitive partnership and their interdependencies. The
value net model structures multiple, direct and indirect, vertical and horizontal relationships of
Coopetition
17
a firm with different stakeholders, such as competitors, suppliers, complementors, and
customers (Padula & Dagnino, 2007). In contrast to a competitor, a complementor relates to a
company that provides supplement products or services for mutual customers. For instance,
Intel Corporation and Microsoft Corporation demonstrate a complementor partnership. Since
every computer needs a hardware as well as a software to function appropriately, Intel provides
the hardware and Microsoft allocates the necessary software. The vertical and horizontal
interdependences in the value net show where value can be collectively created and captured
between the network members (Cygler et al., 2018). That is why, from a contextual perspective,
the value net observes interactions of competitive and cooperative relationships and
investigates in how the interdependences affect coopetitors perceptions in organizations
(Bengtsson, Eriksson, & Wincent, 2010).
Figure 2: The value net model (Nalebuff et al., 1997, p. 8)
The value net model also allows to distinguish between dyadic coopetition or multifaceted
coopetition. On a dyad-level, coopetition proceeds on one layer between only two competitors.
In contrast, Rusko (2012, p. 65) defines multifaceted coopetition as „a contextual coopetition
network comprising of two (or more) coopetitive firms, in which also at least one or more
actors, such as own or foreign government, customers or other stakeholders of the firms are
involved”. Multifaceted coopetition with additional stakeholders indicates that the interplay of
the actors’ roles, processes, and objectives increases in complexity (Eikebrokk & Olsen, 2005).
The environmental interactions are based on “sets of competitive and cooperative relationships
and interdependences in the environment influence the behavior of individuals, groups or
organizations” (Bengtsson et al., 2010, p.198). Thus, the multifaceted approach of coopetition
Coopetition
18
encompasses a broader perspective, which includes additional stakeholders and the opportunity
for a win-win-win situation (Walley, 2007).
This subsection of coopetition has been attempted to provide a summary of the theoretical
foundations of coopetition based on the resource-based view and the game theory. The next
subsection entails a more comprehensive investigation in the two core elements of coopetition,
cooperation and competition.
3.2. Cooperation and Competition Coopetition includes two different streams, which are cooperation and competition. The nature
of both core elements can be identified in global business networks. The following subsections
include the analysis of interactive relationships of competitors. More precisely, these parts
entail different relationships between competitors in a business network (Bengtsson & Kock,
1999), the dynamic nature of cooperation and competition (Chen, 2008), and a contextual
clarification of coopetition typologies (Dagnino, 2009).
3.2.1. Relationships in a Business Network In a business network, firms can have different relationships simultaneously (Bengtsson &
Kock, 2000; Dagnino, 2009). Cooperation activities with vertical actors, such as suppliers or
customers, are more formal and visible because it usually involves physical resources derived
from distribution activities (Bengtsson & Kock, 1999). In terms of horizontal interdependence,
cooperation with direct or indirect competitors is mainly informal and characterized by social
exchanges rather than economic exchanges (Bengtsson & Kock, 2000). In both areas, a focal
firm has a decisive role in a network context (Lavie, 2006). In the following, the section
examines different horizontal relationships between competitors, which are co-existence,
cooperation, competition, and coopetition.
Coopetition
19
Figure 3: Relationships between competitors (Bengtsson & Kock, 1999, p. 181)
Co-existence includes information and social exchanges without economic exchanges.
Therefore, low connection between competitors results in a higher distance. A mutual
dependency exists, but the organizations do not interfere with each other. In general, a high
degree of trust and strong, informal norms are present, though the competitors’ goals are not
overlapping (Bengtsson & Kock, 1999).
In contrast to co-existence, competition in a business network is associated with an action-
reaction pattern. This means if one competitor makes a strategic move by launching a new
product, the others will respond, for example, by product differentiation. Social norms and trust
between competitors are mainly manifested in informal rules and their strategic goals are
similar in structure because they have the same buyer. Interactions are direct and
straightforward.
Cooperation contains frequent interactions and mainly involves social, knowledge, and
economic exchanges. Social norms and trust distribute the power among partners in a formal
cooperative agreement which means that conflicts rarely occur. Common goals encourage
closer proximity between the actors (Bengtsson & Kock, 1999).
Coopetition in a business network combines economic and social exchanges between
competitors. On the cooperative side, the power interdependence rests on functional factors
referring to the value chain, whereas on the competitive side, the power interdependence relates
to their position and strength. Nonetheless, conflicts primarily occur in competition and rarely
in cooperation (Bengtsson & Kock, 1999). Strategic goals, for example, are stipulated mutually
in cooperation but are pursued independently in the competition (Bengtsson & Kock, 1999).
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20
3.2.2. Dynamic Nature of Cooperation and Competition In several coopetition studies, the dynamic nature of coopetition is described as a paradox
(Chen, 2008; Gnyawali, Madhavan, He, & Bengtsson, 2016; Raza-Ullah, Bengtsson, & Kock,
2014). A paradox defines “contradictory yet interrelated elements (dualities) that exist
simultaneously and persist over time” (Smith & Lewis, 2011, p. 382). The neoclassical
economics theory indicates that cooperation and competition are two opposites located on one
continuum (Porter, 1985). Nevertheless, the perspective on cooperation and competition has
changed towards a more paradoxical notion of two distinct, but interrelated continua (Luo,
2004). In that sense, the consideration of the simultaneity among cooperation and competition
will be more beneficial for competitors by considering competition or cooperation on an
individual basis (Lado et al., 1997).
The relation between competition and cooperation can have different constellations. As
illustrated in Figure 4, both concepts can be described as independent opposites (dyadic),
interrelated opposites (binary) or interdependent opposites (all-inclusive).
Figure 4: Competition – Cooperation relationship (Chen, 2008, p. 298)
The first constellation (3-1) views competition and cooperation as two independent and
incompatible opposites. Both incompatible opposites are “absolutes” and hence, considered
Coopetition
21
separately (Chen, 2008, p. 298). Gomes-Casseres (1996, p. 7) emphasizes the importance of
the separation between these two forces “like oil and water, competition and cooperation do not
mix. Instead, they operate side by side, one after the other, or layered one on top of the other”.
Similarly, Bengtsson and Kock (2000) argue that cooperation and competition are two
fundamentally contradicting logics which need to be managed separately. This constellation
draws on the neoclassical economic argument that one concept excludes the other and results
in a zero-sum scenario (Chen, 2008). In an inter-firm relationship, two influencing forces drive
the balance of competition and cooperation. The first force describes the mutual interest that
strives for joint value maximization, whereas the second force constitutes the self-interest of
each firm, emphasizing on aggressive actions and seeking for an individual profit increase. As
a result, when one absolute increases, the opposite decreases (Zeng & Cheng, 2003).
The second conception (3-2) demonstrates cooperation and competition as two interrelated
opposites. Inter-firm relationships or its actions with both cooperative and competitive
approaches come from either the ambiguity or the mixed nature of both concepts (Chen, 2008).
For instance, General Motors once offered consumers a $1000 coupon on car equipment when
consumers are buying a car. However, the voucher could also be redeemed at a competitor’s
store, which results in a sales boost of a rival. In this case, it is not clear whether competitors
should see the initiative of General Motors as a competitive or a cooperative action and thus,
represents ambiguity (Chen, 2008). Besides, the influencing forces of cooperation and
competition are influencing each other by forming inter-organizational relationships.
According to the Chinese yin/yang philosophy, competition and cooperation are forming a
dynamic unity and hence, generated significant importance for inter-firm dynamics (Chen,
1996).
A coopetitive situation entails innately a certain degree of risk and uncertainty because the
involved organizations may have different views on the relationship. This relationship
asymmetry can be seen, for instance, in a network economy. If a firm wants to introduce a new
standard, it must collaborate with other firms and develop a single-network with
complementary resources of others. Examples for such a standard are automated teller machine
(ATM) networks, high-definition television (HDTV) standard or cellular phone networks.
These cases show initiatives of establishing a new standard and include both cooperative and
competitive aspects (Chen, 2008). After a standard has been established, the competitors face
an increase in competition, which is even more intensified when new players join the network.
Afterwards, the competitors must still collectively maintain the standard in order to not waste
valuable resources (Shapiro & Varian, 1999).
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22
The interrelation and the constant pressure on organizations to balance the dualities are
manifested in such a situation. The word “compete” combines two Latin words “com”
(together) and “petere” (to aim at), which means more or less “to strive after something, in a
company or together” (Chen, 2008, p. 299). This derivation indicates that even in such a
divergent situation of two opposites, the competitors are to a certain extent intertwined and
mutually influence each other (Bengtsson & Kock, 2000).
In the third constellation (3-3), cooperation and competition are unified in both circles and
characterized by dependency and relation. Thus, the interdependent opposites are seen as an
“all-inclusive” constellation (Chen, 2008). In this conception, inter-organizational relationships
or their actions can be either of cooperative or competitive nature. The inter-organizational
research suggests that organizations are embedded in an interconnected business environment
and their viability or performance rests on its interdependence with other organizations (Dyer
& Sing, 1998; Oliver, 1990; Ring & Van de Ven, 1994). In this context, research investigations
of inter-firm relationships include, in particular, resource exchange and reciprocity (Ring &
Van der Ven, 1994). From this perspective, two different aspects are important to consider: The
first aspect suggests that cooperative and competitive ties build up the foundation of inter-
organizational relationships. The second issue implies that the idea of organizational
interdependence is a significant part of understanding organizational performance and survival
since organizations are dependent on the actions and decisions of each other (Chen, 2008).
Inter-firm dynamics also consider the “all-inclusive” constellation from an individual level,
which includes behavioral interactions among firms at the action-response level (Lado et al.,
1997). In this regard, the interplay of cooperation and competition between the inter-firm
relationship is complex and multifaceted. On the one hand, a competitive action may provoke
a cooperative response, whereas, on the other hand, cooperation between competitors may
release a competitive retaliation. In addition, the all-inclusive interdependent opposites include
relationships with neither competitive nor cooperative interactions. This kind of situation goes
beyond the scope of simultaneous competition and cooperation and is characterized as
conservative. In this case, competitive or cooperative interactions are undetected but still
represent a relationship or action of unused opportunities (Chen, 2008). The conservative
relationship mentioned above mainly relates to a co-existence in horizontal relations.
After analyzing the dynamic nature of coopetition and the three possible constellations between
cooperation and competition, the next section describes different horizontal relationships in a
business network.
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23
3.2.3. Typologies of Coopetition
With regard to the structure of coopetition, it can be distinguished between dyadic coopetition
and network coopetition, which mainly differentiates in the number of firms involved in the
partnership (Dagnino, 2009). Both structures can be either constellated as simple or complex.
Table 2: Typologies of coopetition (adapted from Dagnino, 2009, p. 30)
Simple dyadic coopetition occurs when two firms on a single layer in the value chain
cooperatively compete, such as Sony and Samsung (Ritala, 2012).
Complex dyadic coopetition includes more than two dyadic relationships among several layers,
which, for instance, can be seen in the automobile industry, for example, Volkswagen-Porsche,
Honda-Isuzu or Opel-Suzuki (Dagnino, 2009, p. 31). Most studies investigated coopetition on
a dyadic level, whereas less attention was given to a network level (Gnyawali & Madhavan,
2001).
Simple network coopetition describes a partnership between multiple firms on one single layer
of the value chain. It includes, for instance, “parallel sourcing” in buyer-supplier partnerships
or horizontal relations between competing firms in an industry (Dagnino, 2009; Kentworthy,
1995).
Toyota Motor Corporation in the automobile industry illustrates an excellent example of a
buyer-supplier relationship. In this case, Toyota criticized the American way of making
business with its suppliers, in which different organizations made competitive bids in order to
help Toyota in increasing innovations and reducing costs. This type of relationship has been
assessed by Toyota as destructive because it only leads to reduced costs in the short-term. That
is why Toyota transformed its operationalization and formed an association for the suppliers.
As a consequence, Toyota enhanced suppliers to competitive cooperation instead of solely
Coopetition
24
competition. In the supplier association, information spread out among the suppliers about the
latest innovative accomplishments, which lead to quicker developments. Toyota rewarded
every supplier that contributes to innovative solutions for decreasing costs.
Horizontal relationships between more than two competing firms can be created by trade
associations (strategic alliances) or government incentives. Such agreements lead to several
economic benefits that can be achieved through greater research and development investments,
and workforce (for example, employee training). Economic benefits can also be attained
through the support of financing, technology distribution, sharing manufactures, faster
agreements on standards, and a quicker launch of products to market (Dagnino, 2009;
Kenworthy, 1995). Moreover, firms can accomplish knowledge value through knowledge
creation and knowledge transfer. This requires great communication and information exchange
that can be applied in mutual product co-design and co-development (Dagnino, 2009).
The last coopetition structure refers to complex network coopetition, which represents a
partnership among multiple firms on various layers of the value chain (for example, industrial
districts, firm cluster or multilateral agreements) (Dagnino, 2009). For instance, Michelin,
Goodyear, Pirelli, and Dunlop are global rivals in the tire industries. They collectively made a
multilateral agreement on Michelin’s invented “pax system” that includes a new service
innovation improving comfort and performance for customers. Subsequently, the system
became a new industry standard. However, the pax system failed in the end because of the
missing contributions of other actors in the network economy, such as car manufacturers and
service stations (Adner, 2012).
This section of coopetition has described the interconnectedness of the core concepts,
cooperation, and competition. Moreover, it has provided an overview of different relationships
in a business network and different typologies of coopetition. The next part analyzes the inter-
organizational orientation of competitors participating in coopetition.
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25
3.3. Inter-Organizational Orientation in Coopetition In this thesis, inter-organizational orientation in coopetition is divided into four subsections.
The first one analyzes the motives of business firms for establishing a coopetitive partnership
(Ritala, 2012). The second subsection describes different rent-seeking behaviors that
coopetitors may adopt (Lado et al., 1997). The third subsection explains the role of proximity
in coopetition (Steinmo & Jakobsen, 2013), and the fourth subsection illustrates different
success factors of coopetition (Chin et al., 2008).
3.3.1. Motives for Coopetition
Following a game theoretical perspective, competitors cooperate in order to enlarge the overall
business pie and afterwards, compete for the biggest slice of it (Nalebuff et al., 1996). The
resource-based view, on the other hand, indicates that competitors strive for achieving
competitive advantage by managing scarce resources that cannot be developed individually
(Della Corte & Aria, 2016). Benefits arise in coopetition when they mutually increase the total
value and then individually capture the value. Grounded on the game theory and the resource-
based view, Ritala (2012) mentions three specific motives that describe the rationale of
engaging in coopetition:
Þ Increasing the size of the current market or create a new one
Þ Creating efficiency in resource utilization
Þ Improving a firm’s competitive position
The first motive concentrates on increasing of the current market size or mutually creating a
new one. Enlarging the market size or creating new markets typically refers to incremental or
radical innovations. Competitors cooperate for improving their products and services or create
new ones (Quintana-Garcia and Benavides-Velasco, 2004). The main mechanisms for gaining
innovation benefits from coopetition are first, the compatibility and interoperability, and
second, the aspect of sharing risks and costs. Firms in the same industry must have a certain
exchangeability, which allows coopetitors to cooperate on a particular issue in order to create
additional value for their customers (Ritala, 2012). Especially competitors are more likely in
possession of necessary complementary resources for the initiative (Das & Teng, 2000). In
addition, due to the high costs of an initiative, competitors are more willing to share the
occurring costs and risks (Gwynne, 2009).
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26
The creation of efficiency in resource utilization relates to the second motive in coopetition.
Firms show engagement in coopetitive relationships due to their desire to use fewer resources
or utilize their current resources more efficient. Especially in scale alliances, competitors join
together, bundle, and integrate supplementary resources to share risks and costs (Dussauge,
Garrette, & Mitchell, 2000). Therefore, it enables them to gain efficiency advantages. In
general, scale alliances most commonly occur in the airline industries (Garrette, Castañer, &
Dussauge, 2009).
The third motive concerns the improvement of a firm’s competitive position. Firms do not only
want to protect their market share but also try to improve their competitiveness within the
industry. In both cases, firms use coopetition for defending their competitive advantage and
encouraging the development of new technologies. For instance, Sony and Samsung engaged
in coopetition for developing liquid crystal display (LCD) panels in order to achieve
competitive advantage (Gnyawali, He, Madhavan, 2008; Ritala, 2012).
3.3.2. Strategic Rent-Seeking Behavior A firm’s rent-seeking behavior is characterized as strategic and value-oriented, involving the
acquisition and development of resources for the generation of superior results (Rumelt, 1984).
The behavioral performance highly depends on the mobilization, allocation, and exchange of
strategic assets (Lado et al., 1997; Rumelt, 1987). Lado et al. (1997) developed a conceptual framework of different behavioral approaches for
economic rent-seeking (Figure 5). The framework goes beyond the neoclassical approach
(Porter, 1985) and explains cooperation and competition as two interrelated opposite ends of
one continuum. Moreover, it addresses four different types of rent-seeking behaviors, with
which organizations can generate economic rents and may achieve sustainable business
performance.
Four categories of strategic rent-seeking behaviors can be identified which are monopolistic
rent-seeking behavior, collaborative rent-seeking behavior, competitive rent-seeking behavior,
and syncretic rent-seeking behavior. In the following, the four categories are explained in more
detail.
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27
Figure 5: Rent-seeking strategic behavior (adapted from Lado et al., 1997, p. 119)
3.3.2.1. Monopolistic Rent-Seeking Behavior Monopolistic rent-seeking behavior is characterized by low cooperation and low competition.
This particular type of behavior is seen as beneficial in the short term but indicates to decrease
societal welfare in the long term and thus, jeopardize the survival of the firm (Lado et al., 1997).
Moreover, a firm that adopts a monopolistic behavior is viewed as inflexible and complacent,
which suppresses innovation and entrepreneurial attitude (Leonard-Barton, 1992). Under these
circumstances, monopolistic rent-seeking behavior may not be sufficient for achieving a
sustainable business performance (Lado et al., 1997).
3.3.2.2. Competitive Rent-Seeking Behavior Firms exhibit and adopt a competitive rent-seeking behavior in order to achieve a better market
position and/or generate a competitive advantage over competitors. This can be achieved either
by manipulating the constructional variables of an industry or by creating unique and inimitable
resources, skills, or expertise (Barney, 1991; Porter, 1985). Besides, this particular type of
behavior reflects a firm’s zero-sum orientation towards its stakeholders (Lado et al., 1997).
Competitive rent-seeking behavior is seen as an attitude that increases productivity and
efficiency. Moreover, it enhances a firm’s creativity by establishing new combinations of
resources, methods, and processes in order to develop new products and services (Nelson,
1991).
However, the competitive orientation faces criticism as being too limited in three different
foundations. Firstly, competition signifies a zero-sum game, in which one firm’s success
reflects another firms’ loss (Jarillo, 1988). Accordingly, when another competitor possesses a
Coopetition
28
particular resource that a firm requires, competitive rent-seeking behavior tends to enhance the
protection of a firm’s unique and hard-to-copy resources or increases the possibility of
opportunistic moves towards the others (Pfeffer & Salancik, 1987). In this context, firms may
overlook cooperative possibilities for achieving a “variable plus-sum game” (Rouse, 2005).
Secondly, competitive-rent seeking behavior may neglect the importance of social
embeddedness in an industry because it represents the fundament for creating and developing
idiosyncratic and relational resources (Lado et al., 1997). Thirdly, competitive rent-seeking
behavior seeks to capture and privatize beneficial externalities and mutualizing costs. As a
consequence, dysfunctional outcomes occur, which consists of short-term benefits. In line with
monopolistic rent-seeking behavior, competitive rent-seeking behavior can be beneficial in the
short term but may not be sufficient for achieving a sustainable performance (Lado et al., 1997;
Schoemaker, 1990).
3.3.2.3. Collaborative Rent-Seeking Behavior
Collaborative rent-seeking behavior is characterized by low competition and high cooperation.
Business firms with this kind of behavior strive for common benefits, combining mutual
resources, skills, and capabilities. In contrast to the competitive rent-seeking behavior, firms
seek opportunities with competitors to share their resources in order to gain competitive
advantage. The interdependent relationship between competitors fosters a broader stance by
emphasizing on collective interest rather than only one firms’ interest. Collaborative rent-
seeking behavior promotes altruism, develops trust, and underlines mutual exchanges between
the partners (Lado et al., 1997).
Collective interest emerges from focusing on a long-term perspective and strengthening
altruism. Altruism describes a principle of ethical practice that supports the identifications of
positive-sum games between potential partners (Barney & Hansen, 1994). Positive-sum games
can be implemented by forming joint ventures or strategic alliances, which are characterized
by fundamental requirements, such as trust and commitment (Gulati, Khanna, & Nohria, 1994).
Induced commitments can be seen as the trigger for a firm’s trustworthiness that leads other
partners to reciprocal reactions, such as providing and sharing resources to the partnership.
Trust reduces uncertainty and enables social control (Barber, 1983; Ring & Van de Ven, 1994).
More specifically, it serves as a requirement for a social system to sustain a cooperative
relationship within and among organizations. What is more, trust leads to reduced transaction
costs because it can hamper opportunistic behavior (Barney & Hansen, 1994).
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29
A sustained cooperative relationship requires ongoing reciprocal interactions and mutual
expectations for economic exchanges (Axelrod & Hamilton, 1981). Thus, reciprocity mitigates
opportunism and encourages collaborative rent-seeking behavior. In summary, when firms
apply collaborative rent-seeking behavior including altruism, trust, commitment, and
reciprocity, it increases the probability of gaining a cooperative advantage (Kanter, 1994).
However, collaborative rent-seeking behavior also includes risks. Intensive cooperation may
lead to strategic rigidity, which results in dysfunctional outcomes (Lado et al., 1997). When
strategic alliances continuously strengthen and deepen their relationship, they may be doomed
when they miss out to break up the relationship due to environmental changes (Phillips, 1989).
Additionally, high cooperation may be disadvantageous for firms in terms of developing a habit
for cooperative partners and fail to differentiate them from opportunistic firms (Frank, 1988).
This may lead firms to blunder into a trap and get exploited by others in the relationship. Even
though collaborative rent-seeking behavior enables partners accessibility of sharing resources,
it may not be sufficient in generating a sustainable performance (Lado et al., 1997).
3.3.2.4. Syncretic Rent-Seeking Behavior Syncretic rent-seeking behavior is described as highly cooperative and competitive. With
adopting this particular form of behavior, firms seek to realize a dynamic balance among
competition and cooperation (Lado et al., 1997). By doing so, firms can not only strengthen
their competitive position by developing and leverage idiosyncratic resources but can also
simultaneously share costs and risks that arise by mobilizing their skills (Hamel, 1991).
Competition may encourage innovation inside the partnering firms, which result in knowledge,
technical, and market growth rights (North, 1990). According to the strategic alliance literature,
syncretic rent-seeking behavior leads to socioeconomic progress (Lado et al., 1997). Therefore,
it encourages knowledge development and knowledge exploitation that include raising volume
and quality of products and services, and give rise to market expansion (Aoki, 1990; Gerlach,
1992).
Besides, the syncretic rent-seeking behavior outlines win-win opportunities deriving from
cooperation and represents possibilities to enhance efficiency stemming from competition.
Nevertheless, this requires managing and handling conflicts and competitive confrontations
constructively. Such requirements are viewed as important factors that lead to “greater
openness, knowledge and understanding” between the alliance partners (Anderson,
Rungtusanatham, & Schroeder, 1994, p. 483).
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30
Also, syncretic rent-seeking behavior leads to greater strategic flexibility. Competitive
advantage can be gained by leveraging unique resources, whereas cooperative advantage can
be achieved by collaborating with trustworthy partners, identifying win-win situations, and
making necessary adjustments of resource commitments to achieve the strategic goals of the
coalition (Barney & Hansen, 1994; Gulati et al., 1994; Parkhe, 1993). The case of Toyota in
the automobile industry, as delineated in section 3.2.3., provides evidence of the power of
syncretic rent-seeking behavior in buyer-supplier coopetition (Hill, 1995; Lado et al., 1997).
In line with other behavioral approaches, syncretic rent-seeking behavior contains certain
limitations. It might fail to strengthen a firm’s competitive position when the expenses of the
implemented strategy predominate the discounted present value that occurs to the firm. Costs
of such a coopetitive partnership encompass the maintenance of a repertoire of cognitive maps,
behavioral routines, and providing an organizational resource for both cooperative and
competitive behavior. Moreover, syncretic rent-seeking behavior includes the costs of each
strategic move with the specific transaction partners. The more partners are involved, the more
expensive the partnership. A large number of partners may result in an increased rejection from
the involved partners in order to create mutual benefits (Aram, 1989). The increased rejection
stems from the fact that with multiple partners, specific inputs are difficult to evaluate or
monitor, such as firm-specific human or technological aspects, which further lead to
opportunism (Williamson, 1985).
Syncretic rent-seeking behavior may also fail to gain economic rents if the strategic goals and
expectations of the partners are not coherent, or one partner accumulates resources slower than
other partners (Hamel, 1991). As a consequence, the stimulation of developing and exchanging
knowledge is getting suppressed and may miss the opportunity for effective rents. In sum,
syncretic rent-seeking behavior may result in sustainable business performance, but it depends
on the situation and the extent of the resource contributions between the partners (Lado et al.,
1997).
3.3.2.5. Key Competencies for Coopetition Partners applying Syncretic-Rent Seeking For achieving a sustained business performance, business firms should not only consider
applying an appropriate rent-seeking behavior but also acknowledge specific drivers for
economic rents such as managerial, input-based, transformational, and output-based
competencies (Lado, Boyd, & Wright, 1992).
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31
Managerial competencies refer to a top managements’ capability to communicate and develop
a strategic vision including cooperative and competitive relations with competitors (Lado et al.,
1997). Thus, the leaders’ responsibilities and strategy development depend on specific
cognitive maps and the appropriation of perceptual structures (Maruyama, 1982). In this regard,
it is to differentiate between morphostatic and morphogenetic mindscapes. Morphostatic
aspects concentrate on homogeneity, harmony, and maintaining the current status. In contrast,
morphogenetic factors include heterogeneity, tensions between both dualities, and the
orientation towards organizational change (Hurst, Rush, & White, 1989). Lado et al. (1997)
argue that applying a morphogenetic perception facilitates business firms to strive for
cooperative and competitive strategies simultaneously.
Concerning input-based competencies, business firms need to balance their resource
investments in a coopetition relationship. Sanchez (1995) differentiates between internalized
resources, relational resources, and market resources. Internalized resources can be directly
owned and controlled by the firms. Firms with competitive rent-seeking behavior most likely
focus on investments in internalized resources (Lado et al., 1997). Whereas firms with
collaborative rent-seeking behavior may emphasize on building relational resources, which can
be obtained by cooperative agreements (Sanchez, 1995). Additionally, altruism supports
relational resources (Kanungo & Conger, 1993) and maintaining cooperative ties with
stakeholders. The third type of resource investments refers to market resources, which can be
publicly accessed from the “spot” market (Lado et al., 1997).
Consequently, firms that are applying a syncretic rent-seeking behavior in coopetition need to
balance their investments of internalized, relational, and market resources by cooperative and
competitive interactions (Lado et al., 1997).
Transformational competencies such as innovation, organizational learning, and organizational
culture enable competing firms to develop collaborative ties (Hamel, Doz, & Prahalad, 1989).
Strategic intentions of coopetition include the generation of competitive and collaborative
advantages that stems from transformational processes that are also characterized by tensions,
contradictions, and ambiguities (Browning, Beyer, & Shetler, 1995). Tensions, conflicts, and
contradictions are more or less perceived as negative phenomena. However, throughout a better
understanding of these characteristics, organizations can develop a specific type of “moral
community” over time, in which they foster reciprocal interdependencies, encourage open
communication, conduct altruistic contribution of precious capabilities, and rely on mutual trust
Coopetition
32
(Browning et al., 1995; Lado et al., 1997). Thus, Lado et al. (1997) point out that syncretic rent-
seeking behavior has positive relations to process constructive conflicts, contradictions, and
cultural differences.
Output-based competencies relate most likely to reputational aspects, which can be facilitated
by syncretic rent-seeking behavior (Lado et al., 1997). Reputation refers to a firm’s brand name
or to the quality of a product or service, and can be increased, for example, through participation
in certification contests (Rao, 1994; Spence, 1973). The reputational aspect serves as a
competitive signal and represents how stakeholders perceive a business firm compared to the
competitors (Fombrun & Shanley, 1990). Developing a strong reputation can lead to an increase
in a firm’s organizational legitimacy to stakeholders and trustworthiness to partners (Lado et
al., 1997). What is more, with a solid reputational base, opportunistic behavior may not be
viewed as a valuable option in cooperative relationships (Barney & Hansen, 1994).
3.3.3. Coopetition and the Role of Proximity In order to better understand the interaction process between coopetition partners, this section
analyzes the role of proximity in coopetition. Proximity is constructed by three main types:
Organizational proximity, technological proximity, and geographical proximity (Steinmo &
Jakobsen, 2013).
Organizational proximity proceeds between inter-organizational relationships and involves
social, cognitive, institutional, and cultural proximity (Boschma, 2005; Knoben & Oerlemans,
2006).
Social proximity describes a partnership that involves trust, friendship, kinship, and experiences
and is essential for innovative improvements and collaboration (Boschma, 2005; Letaifa &
Rabeau, 2013). Moreover, it enhances effective communication between the partners through
cooperative interactions, which, in turn, consolidate the reputation and trust of the partners
(Balland, 2012; Maskell & Malmberg, 1999). Close social interactions between partners are
essential for useful knowledge exchanges and are key requirements for developing absorptive
capacity (Hotho, Becker-Ritterspach, & Saka-Helmhout, 2012).
Cognitive proximity concerns shared values in a partnership and the similarities of the partners’
perception, interpretation, and evaluation of the world (Wuyts et al., 2005). Similar to social
proximity, intense cognitive proximity between partners facilitates their communication among
each other and the absorptive capacity (Boschma, 2005). Therefore, the partners need a solid
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33
base for managing the transfer of information and expertise, which further facilitates learning
between them (Knoben & Oerlemans, 2006; Nooteboom, 2000).
Institutional proximity focuses on the coordination of actions between organizations and is
characterized by different norms and rules. Intense institutional proximity facilitates collective
learning by transferring knowledge on common ground (Knoben & Oerlemans, 2006).
Cultural proximity between organizations refers to common understandings, interpretations or
routines, which can enhance the interactions and result in quicker results (Knoben &
Oerlemans, 2006).
Next, technological proximity refers to the degree of technical knowledge that can be gained
from other organizations (Knoben & Oerlemans, 2006). Absorptive capacity plays a crucial
role in technological proximity and can be obtained by technological intermediaries through
gatekeeping, technology watch, and road mapping (Spithoven, Clarysse, & Knockaert, 2010).
Cohen and Levinthal (1990, p. 128) define absorptive capacity as “a firm’s ability to recognize
the value of new, external knowledge, assimilate it and apply it to commercial ends”. That is
why an organization with a certain degree of absorptive capacity can learn from all
organizations equally (Knoben & Oerlemans, 2006).
Geographical proximity mainly describes local, territorial, spatial or physical proximity, which
positively influences performance on cooperation (Broekel & Boschma, 2011). Close
geographic proximity facilitates interactions between the partners and support knowledge
transfer and innovation (Knoben & Oerlemans, 2006). Moreover, high physical proximity
between coopetitors facilitates the development of mutual trust because of an increased
likelihood of face-to-face interactions (Ponds, Van Oort, & Frenken, 2007).
The different roles of proximity between coopetition partners have been analyzed in this
subsection. It has been suggested that several factors of organizational, technological, and
geographical proximity can be beneficial for coopeting partners, which may lead to a successful
coopetitive partnership (Knoben & Oerlemans, 2006; Steinmo & Jakobsen, 2013). The next
subchapter examines further aspects that coopetitors should consider to establish and develop
a successful coopetition relationship.
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34
3.3.4. Success Factors of Coopetition The following subsection analyzes a framework of Chin et al. (2008), which contains three
main pillars that are necessary to consider when firms want to achieve and sustain a successful
coopetitive partnership. These three pillars are Management Commitment, Relationship
Development, and Communication Management. Although the framework in Chin et al. (2008)
also includes subfactors, the adapted framework (illustrated in Figure 6) focused more generally
on the different factors of the three main categories, which are explained in the following.
Figure 6: Coopetition success factors (adapted from Chin et al., 2008: p. 442)
The first pillar covers management commitment including management leadership, long-term
commitment of the involved partners, and the ability of organizational learning (Chin et al.,
2008). Management leadership describes a manager’s responsibility and their attitude towards
the partnership (Kotzab & Teller, 2003). Long-term commitment outlines the willingness of
every involved partner for the continuity of the relationship (Zineldin, 2004). Organizational
learning depends on the ability of how the partnering firms detect, process, and deploy the
information shared in the partnership (Huber, 1991).
The second category addresses the relationship development and hence, includes the
development of trust and knowledge/risk sharing. The development of trust is crucial in
coopetition with multiple partners because of the high uncertainty aspect (Zeng & Chen, 2003).
The alignment of common goals and development of a mutual organizational culture strengthen
the trust between the partners (Doney & Cannon, 1997). What is more, knowledge plays an
essential part in coopetition and represents a source of competitive advantage. In addition to
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35
trust, the identification of useful knowledge and the effectivity of knowledge and risk sharing
demonstrate supporting components of the relationship development (Carayannis, 1999).
Shared knowledge must be of value for more than only one firm because otherwise, it
constitutes a useless input (Levy, Loebbecke, & Powell, 2003). Effective knowledge sharing
results in added value that may emerge from synergy effects between the firms. In addition,
effective risk sharing is essential in coopetition to distribute not only potential losses but also
to encourage firms to cooperate for high-potential initiatives (Morgan & Hunt, 1994).
The third pillar focuses on communication management between coopetitors. It includes the
mutual elaboration, development, and implementation of coopetition strategies. Additionally,
it concerns the monitoring of information flows via an information system support (Chin et al.,
2008). Information systems support is important for the assistance in coordination and control
of joint ventures (Birnberg, 1998). More specifically, it maintains the interchange of data that
keep the involved partners up to date and ensures effective communication and coordination
between them (Friedman & Barnes, 1992). Another supporting aspect of communication
management is the application of an appropriate conflict management system. High information
flow in coopetition leads by nature to inevitable conflicts (Tidström, 2014). Thus, an effective
conflict management system is needed to prevent the relationship from escalations (Crawley,
1992). When a conflict arises, it needs a certain amount of time in terms of a conflict resolution
process (Zineldin, 2004). Moreover, in order to improve the conflict management system, the
organizations should continuously control conflict intensity, conflict processes, and conflict
management skills (Quintana-Garcia & Benavides-Velasco, 2004).
This subsection has shown what components business firms need to consider for establishing a
successful coopetitive partnership. The next section analyzes different aspects of coopetition
management.
3.4. Coopetition Management In a global environment, business firms that engage in coopetition are confronted with different
situations and challenges, which require an appropriate management (Luo, 2007). Additionally,
as delineated above, an effective conflict management system is needed to process occurring
tensions (Tidström, 2014). Furthermore, the aspect of value dynamics plays a vital role in
coopetition management that calls for a more detailed investigation (Volschenk et al., 2016).
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36
Thus, the following subsections analyze different situational tactics between global rivals,
coopetitive tensions and conflict management, and value dynamics in coopetition.
3.4.1. Situational Tactics between Global Rivals
Luo (2007) developed a framework with different scenarios of global coopetition (Figure 7). In
that framework, each coopetitive situation depends on the number of foreign markets and the
number of global rivals involved. The four situations concentrating, dispersing, connecting,
and networking also include different situational tactics, which are delineated in the following.
Figure 7: Situations and situational tactics in coopetition (Luo, 2007, p.136)
3.4.1.1. Concentrating Situation A concentrating situation represents a small number of rivals simultaneously competing and
cooperating in very few international markets. Such a situation most likely refers to growing
organizations that are still engaged with global expansion in order to reach a global scale in
their operations (Luo, 2007). For example, Bacardi focuses on the high-end vodka market in
the United States and South America, while they are simultaneously coopeting with a few
rivals, such as Pernod-Ricard from France and Allied Domecq from Great Britain (Luo, 2007).
Global players in a concentrating situation tend to consider two strategic responses to keep their
position, which are either turnaround or participation (Luo, 2007). Turnaround means seeking
for new opportunities by tapping into new international markets. Whereas participation relates
to developing a relationship with leading players. Participation is crucial of becoming a part of
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37
the global network and collaborate with leading rivals in the market in form of an alliance
partner, supplier, distributor, or co-producer (Luo, 2007).
3.4.1.2. Dispersing Situation A dispersing situation constitutes a setting where a few global rivals have coopetitive relations
in many foreign markets. In this situation, a few global rivals compete in different geographic
markets for market share or position holding while they are simultaneously cooperating in, as
for instance, cost-effective resource sharing in upstream activities. Here, firms may consider
solidification or emphasis as strategic tactics. Solidification refers to holding the firm’s position
in the market by consolidating their market power through differentiation, economies of scale,
or innovation. Emphasis is a more defensive tactic compared to solidification because it
includes avoiding direct and intensive competition. However, an emphasis tactic includes the
orientation of common needs of cooperation between rivals. Solidification is preferred from a
relatively stable rival and emphasis is preferred from a relatively weak rival (Luo, 2007).
3.4.1.3. Connecting Situation The connecting situation is represented, when many global rivals have coopetitive relations in
a few concentrated markets. Typical industries for such a situation are sports utility, plasma
television, fashion, and apparel. A large number of rivals in limited markets represent a high
potential for cooperation and low entry barriers.
For instance, in the plasma television industry, Mach-One Corporation focuses on the United
States and Chinese markets and cooperates with competitors, such as LG, Samsung, Sony,
Hitachi, and Matsushita. In this connecting situation, Mach-One simultaneously competes with
them in downstream activities as product quality or advertising, and cooperate in upstream
activities, such as sharing suppliers, establishing industry standards or cross-licensing
technologies (Luo, 2007).
Another example is shown in the automobile industry. Tata Motors has coopetitive relations to
many rivals including Fiat, Ford, Suzuki, Kia, Mitsubishi and Hyundai in the Indian and
Southeast-Asian market. In the coopetition process, Tata Motors simultaneously cooperates
with its rivals in joint marketing or research and development, and compete in production or
sales marketing (Luo, 2007).
Strategic tactics of global players in connecting situations may include differentiation or
position. Position in concentrated markets refers to occupying a central position and
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38
maximizing economic returns by exploiting available and distinctive resources. Notably,
leading players can impact global competition by applying a position tactic through product
innovation or technical standards (Barney, 1986; Chen, 1996). Concerning a comparative small
global rival, a position tactic can help firms to sustain in specific concentrated markets. By
adopting a differentiation tactic, global rivals focus on innovation, quality, customer
responsiveness, or national adaptation in order to increase their competitive position in the
concentrated markets (Luo, 2007).
3.4.1.4. Networking Situation The networking situation describes many global rivals in a broad range of international markets.
The global diversification in such a situation includes many opportunities for coopetition with
different rivals in various industries because of the increased probability of complementary
resources between rivals (Noda & Collis, 2001). In different industrial networks, a coopetitive
agreement between global rivals has loosely coupled structures, which means that they most
likely consist of informal basis and do not constrain the members’ behavior (Luo, 2007). In that
case, coopetitive relationships can be of high complexity, in which a focal firm has different
coopetition intensities with many rivals. For example, Royal Philips Electronics engages with
semiconductor and electronic rival Toshiba Corporation in a coopetition balanced relationship
(high competition and high cooperation) and simultaneously has a more cooperative-dominant
relationship to the global storage device producer BenQ Corporation. In addition, Phillips
engages with multiple telecom service providers, such as Telefonica, Telecom Italia, and
Deutsche Telekom in a monopolistic manner comprising of low cooperation and low
competition. Last but not least, Phillips also maintains a competitive-dominant relationship
with Panasonic Corporation that can be explained by their high resource similarity and high
market commonality and therefore, including fewer cooperation efforts (Luo, 2007).
Strategic tactics in networking situations refer to either sponsorship or integration. A global
rival considers a sponsorship tactic in three different ways: 1) act as a mediator in high rivalry
between members of the global network, 2) form common grounds with rivals for collaboration
(research and development consortia, standard supply bases or production clustering) or 3)
establish beneficial conditions in the global industry by either designing industrial
environments or national/global environments (Luo, 2007). These options of a sponsorship
tactic can lead to an increase in cooperation and in a decrease of competition in the global
network, which in turn, can boost the initiators’ financial returns (Gomes-Casseres, 1994).
Sponsorship tactic also describes a strategic tactic of the coopetition arrangement that includes
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39
the coordination and allocation of specific roles for each involved coopetition partner (Luo,
2007). Therefore, a focal firm may identify different positions for the involved partners and in
which markets they should compete (Lado et al., 1997). The integration tactic includes specific
allocation and coordination of resources that are needed for the cooperation exchange and the
competitive confrontation (Luo, 2007).
This section of coopetition management has analyzed coopetitive situations and situational
tactics between global rivals. As indicated in section (3.3.4.), the successful management of
coopetition also includes an appropriate management of occurring conflicts. That is why the
next part of coopetition management examines tensions in more detail and investigates how
coopetition partners can manage different types of conflicts.
3.4.2. Coopetitive Tensions and Conflict Management The management of simultaneous cooperation and competition may result in several
advantages for the involved firms (Bouncken, Gast, Kraus, & Bogers, 2015). However, the
convergent dualities are inherently conflicting, which makes it difficult for coopetitors to
sustain and balance their relationships (Bengtsson & Johansson, 2014). Therefore, the
following subsections investigate in different types of tensions, the importance of trust and
commitment in managing coopetitive tensions, and different conflict-handling behaviors in
coopetition.
3.4.2.1. Types of Tensions The interplay between cooperation and competition affects the mutual dependence between the
involved actors and results in different intensities of tensions (Fang, Chang, & Peng, 2011).
Although the terms tension, conflict or crisis are perceived as negative sides of business
relationships (Bradford, Stringfellow, & Weitz, 2004), these aspects indicate a requirement to
work on the coopetition relationship, which may lead to new ideas that benefit all partners
involved (Tidström, 2014).
Tension is a subordinate term of conflict, and in most studies, both terms are mainly used
interchangeably (Bengtsson & Kock, 2003; Fang et al., 2011; Mele, 2011; Tidström, 2014).
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40
In coopetition research, tensions refer to roles (Bengtsson & Kock, 2003), knowledge (Chin et
al., 2008, Tsai, 2002), power and dependence (Osarenkhoe, 2010) or opportunism (Lado et al.,
1997; Osarenkhoe, 2010).
Role tension relates to the general orientation of the coopeting partners among cooperation and
competition. For example, a competitor may perceive a role tension when there is a deviation
of the objective of a partner’s organization and the objective of the coopetitive agreement.
Knowledge tension in coopetition focuses on the ratio of a partner’s knowledge sharing and
knowledge restraint (Tidström, 2014). Coopetition partners share their knowledge through
cooperation and aim to capture knowledge through competition (Khanna, Gulati, & Nohria,
1998). The tension of power and dependence relates, for instance, to the size of the involved
partners (Osarenkhoe, 2010). In practice, one partner with substantial resources may use its
power to pressure a smaller partner and take specific actions against its interests, which, in turn,
leads to a particular dependency (Zeng & Chen, 2003). When a partner obtains resources from
another company, the enriched firm may reduce its dependency from the others in order to gain
more control (Luo, 2005). Consequently, there is an imbalance between power and dependence
that lead to a tension in the coopetition relationship (Tidström, 2014).
Another acknowledged tension refers to opportunism, which describes a competitor’s tendency
to evil cunning, pursuing self-interest actions, and taking advantage of a partner (Tjosvold,
Wong, & Wan, 2010). Opportunism tension mainly occurs through competition, but it can also
be induced by cooperation (Bengtsson & Kock, 1999). For instance, when a competitor allows
another competitor to gain insight into its firm’s resources, as a response, the other competitor
may copy the other firms’ core competencies (Lado et al., 1997). Consequently, the competitor
that revealed its resources may feel endangered and take a defensive stance because of the given
opportunity of self-interest behavior (Bengtsson & Kock, 1999).
3.4.2.2. Key Requirements to balance Tensions – Trust & Commitment The balance of coopetition is linked to the above-mentioned tensions and requires prerequisites
such as the fundamental considerations of trust and commitment (Tidström, 2014). According
to Chin et al. (2008), conflict management that includes trust and commitment is viewed as
significantly relevant to maintain a successful coopetition partnership. Thus, trust and
commitment represent essential requirements in coopetition that can influence and decrease
coopetitive tensions when adequately managed (Tidström, 2014).
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41
Trust is defined as “a willingness to rely on an exchange partner in whom one has confidence”
(Moorman, Zaltman, & Deshpande, 1992, p. 315). Moreover, it is not only necessary to
establish cooperation but also to develop and sustain cooperation with competitors (Chin et al.,
2008). In addition, trust increases over time by sharing resources, communication or utilization
and therefore, ensures clarity for firms about its partners’ balance of self-interest versus
common interest (Morris, Koçak, & Ozer, 2007). In order to develop trust, coopetitors need to
have clear common goals and adopt a mutual organizational culture (Chin et al., 2008).
In this context, common goals serve as an interconnection of the partners and their different
interests (Mohamed, Stankosky, & Murray, 2004). Similarities in cultures and processes
facilitate the partners’ interactions and promote closer cooperation (Saxton, 1997). That is why,
respect, understanding, acceptance, integrity, and tolerance are crucial elements for establishing
a common organizational culture (Chin et al., 2008). In conclusion, the trust factor serves as a
mediator for conflicts and can increase a partner’s satisfaction (Anderson & Narus, 1990). In
other words, when inter-organizational trust is present, a partner is more likely to agree to each
other’s propositions (Lui & Ngo, 2005).
The commitment of a relationship is defined as “an enduring desire to maintain a valued
relationship” (Moorman et al., 1992, p. 316). Thus, commitment can be understood as a long-
term orientation (Ndubisi, 2011). Chin et al. (2008) argue that long-term commitment is crucial
for maintaining a successful coopetition partnership. A long-term commitment can neutralize
tensions and may enhance legitimacy for the achievement of mutual goals (Tidström, 2014;
Zineldin, 2004). In order to implement a long-term commitment, the partners need to consider
the adoption of complementary strengths and weaknesses, establish a long-term arrangement
through formal agreements or trust, and continuously do periodic reviews for maintaining a
close relationship (Chin et al., 2008). In contrast, a partner’s under-commitment leads to a
reduced performance of the whole coopetitive partnership and may also determine the existence
of the partnership over time (Morris et al., 2007).
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3.4.2.3. Conflict Management Styles As mentioned earlier, occurred tensions in coopetition relate to conflicts that require appropriate
management (Tidström, 2014). Thomas and Kilmann (1978) developed a five-category concept
in order to assess interpersonal conflict-handling behavior, which has been adopted by Tidström
(2014). The framework in Figure 8 includes different management styles, such as
collaboration, competition, compromise, avoidance, and accommodation.
Figure 8: Conflict management styles (Tidström, 2014, p. 264)
Avoidance is characterized as unassertive and uncooperative. This passive conflict management
style is rarely used and only be viewed as appropriate when a tension is unimportant or
constitutes no issue for the partnership (Tidström, 2014).
Competition includes no cooperative elements. This conflict-handling behavior refers to a zero-
sum structure, which is characterized as highly assertive (forceful) and uncooperative
(Tidström, 2014). A competition-style emphasizes on confrontations between competitors and
can have positive and negative outcomes for the partnership. Bradford et al. (2004) argue that
the consequences of a competition conflict-handling behavior depend on each individual
situation. In this study, confrontation implies an appropriate strategic opportunity when the
situation involves low interpersonal conflicts and high task conflicts.
Accommodation is perceived as purely cooperative without an assertive purpose. Similar to
competition, accommodation can lead to positive or negative consequences. Moreover, it
decreases possible negative emotion that hamper the achievement of mutual goals (Bradford et
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43
al., 2004) and indicates an appropriate strategic tension behavior when the decision does not
influence a partner’s competitive advantage (Tidström, 2014).
Collaboration implies to be the most fruitful conflict-handling behavior for managing conflicts
in coopetition and is characterized by high assertiveness and high cooperativeness.
Collaboration behavior seeks for optimal win-win outcomes, which is beneficial for all included
parties (Tidström, 2014). With the adaptation of a collaboration style, the coopetition partners
search for creative solutions considering both the interests of the coopetition network and the
other partners involved (Gross & Guerrero, 2000). By adopting an attitude of problem-solving,
it leads to the effective management of conflicts and should be used in any coopetition
partnership that also involves components of competition (Afzalur Rahim, Buntzman, & White,
1999; Bradford et al., 2004, Tidström, 2014).
Compromise is centrally positioned in the framework and relates to situations when the partners
mutually agree to certain conditions and tolerate a final decision (Rahim, 1983). This particular
type of conflict management is criticized as half-hearted and lazy (Pruit, 1983). Nevertheless,
it remains advantageous when the partners fail to maintain a collaboration style (Cupah &
Canary, 1997).
Although the concept of conflict-handling behavior by Thomas and Kilmann (1978) reach
broad acknowledgment, it has been criticized for a clear distinction between competitive and
cooperative styles in theory and practice (Van de Vliert & Kabanoff, 1990). Additionally, it
appears that different styles can be adopted at once by different partners (Tidström, 2014).
Another critical aspect rests on the style effectivity (Rahim, 1983). For instance, if none of the
partners possess adequate problem-solving skills and the coopetitive situation demands quick
decision-making between distrusted partners, competition or compromise seems to be suitable
(Thomas, 1992). In coopetition, managing tensions can only be effectively handled by
considering the interest of all network partners (Mele, 2011; Tidström, 2014).
The outcome of successful conflict management in coopetition may contribute to sustaining a
successful partnership (Chin et al., 2008). The adoption of an appropriate style depends on the
situation and the subject criteria of the partners (Tidström, 2014). Conflict is, therefore, neither
positive or negative. Hamel et al. (1989) point out that harmony is not a parameter for success,
but conflicts imply to be a gateway to beneficial collaboration.
After describing different aspects of conflict management, the next part of coopetition
management takes a closer examination of value dynamics in coopetition.
Coopetition
44
3.4.3. Value Dynamics in Coopetition The cooperation between competitors differs from cooperation with other stakeholders (Ritala,
2009). In contrast to other stakeholders, competitors have more heterogeneous resources, serve
the same customer, and are confronted with similar problems and challenges (Dagnino, 2009;
Ritala & Hurmelinna-Laukkanen, 2009). That is why the knowledge that is exchanged in
cooperation plays a significant role in the value creation process (Dagnino, 2009; Ritala &
Tidström, 2014).
In general, competitors cooperate in value creation for increasing the mutual business pie and
afterwards, compete in value appropriation for the biggest slice of it (Nalebuff et al., 1996).
This part of the thesis briefly analyzes the concept of value creation, which is followed by the
description of different value appropriation benefits. Last but not least, this section explains the
different types of value that can be obtained in coopetition.
3.4.3.1. Value Creation The value creation process relates to actions about increasing the sum of the value (Ritala &
Tidström, 2014). Value describes the willingness to pay from the end-customer perspective
(Brandenburger & Stuart, 1996). In coopetition, competitors cooperate simultaneously in order
to create value (Brandenburger & Nalebuff, 2002). A firm in isolation cannot obtain the value
that is created in collaborative relationships but only through idiosyncratic mutual contributions
of alliance partners (Volschenk et al., 2016). The competitors’ motives for joint value creation
range from supply-chain efficiency to innovation, nonetheless it depends on finding appropriate
value creating synergies between them (Ritala & Tidström, 2014). Finding value creating
synergies means that competitors can bring together distinctive, as well as complementary
resources to create strategic value or competitive advantage (Barney, 1991; Dagnino, 2009).
3.4.3.2. Value Appropriation In contrast to value creation, value appropriation includes actions to capture a specific amount
of the created value (Ritala & Tidström, 2014). The value creation and value appropriation are
mutually inclusive, which means that the whole business pie is identical to the sum of the slices
(Garcia-Castro & Aguilera, 2015). According to Dyer, Singh, & Kale (2008), the total sum of
the created value in coopetition is equal to the sum of common and private benefits. As shown
in Table 3, the caption of the created value in coopetition can be distinguished between common
Coopetition
45
benefits, privately captured common benefits, private benefits, and public benefits (Volschenk
et al., 2016).
Table 3: Value appropriation (based on Volschenk et al. 2016, p. 25)
The allocation of common benefits is of prime concern in coopetition, but value appropriation
also includes the generation of private benefits (Janssen, De Man, & Quak, 2013). Common
benefits concentrate on the value that accrues to all actors in the coopetition agreement (Khanna
et al., 1998). Private benefits describe the firm’s acquired resources from another partner, which
can be directly applied elsewhere (Padula & Dagnino, 2007; Park, Srivastava, & Gnyawali,
2014). For better clarification, Volschenk et al. (2016) extend the perspective of common
benefits by considering privately captured common benefits. This specific form of value
appropriation refers to the extent each firm can capture the common benefits. Therefore, the
total benefit for an involved firm is the sum of the private benefits and the privately captured
common benefits of a firm (Volschenk et al., 2016).
Last but not least, public benefits include societal and environmental factors that have the
potential to destroy or create value for other stakeholders and the coopetition partners
(Volschenk et al., 2016). As a consequence, disregard of public benefits in coopetitive actions
is described as sub-optimal (Harrison & Wicks, 2013).
3.4.3.3. Types of Value With engaging in coopetition, competitors can create different types of value. It can be
distinguished between economic value, knowledge value, and socio-environmental value.
Besides, if not adequately managed, coopetition can also result in value destruction (Volschenk
et al., 2016).
Table 4: Types of value (based on Dagnino, 2009; Volschenk et al., 2016; Gnyawali & Charleton, 2018)
Value appropriation
Common benefits Privately captured common benefits
Private benefits Public benefits
Types of value
Economic value Knowledge value Socio-environmental
value Value destruction
Coopetition
46
The economic value mainly refers to the aggregate investments of the coopetition partners.
Dagnino (2009) argues that economic value in coopetition reflects in added values such as inter-
firm cost reduction or revenue increase. That is why competitors pursue to increase the mutual
business pie and gain more out of the relationship than invested (Volschenk et al., 2016). If the
investments outweigh the benefits, value destruction follows (Gnyawali & Charleton, 2018).
Value destruction can be of an individual or collective nature. In coopetition, value destruction
can be distinguished between joint value destruction and firm value destruction. Joint value
destruction demonstrates a net loss in the coopetition relationship that can be mostly traced
back to distrust. Distrust can result in financial consequences, such as increased costs due to
overprotection of resources or additional costs of termination (for example, negotiation or
litigation). Firm value destruction relates to an individual firm’s net loss, in which opportunistic
partners may short-change the disclosure of partners’ valuable resources. Consequently,
individual investments outweigh the common benefits of the relationship (Gnyawali &
Charleton, 2018). Nevertheless, the consideration of only economic value has been criticized
for neglecting additional hidden value that can be preserved (Dagnino & Padula, 2002) and
goes beyond profit and economic return (Harrison & Wicks, 2013).
More precisely, competitors can generate knowledge value from engaging in coopetition
(Dagnino, 2009; Volschenk et al., 2016). Knowledge value is less visible than economic value
and describes the “growth in the interfirm knowledge stock” (Dagnino 2009, p. 18). In inter-
organizational coopetition, firms can receive knowledge value through intra-industry
knowledge creation and transfer. When appropriately managed, knowledge value can be
transformed into economic value (Dagnino 2009).
What is more, coopetition relationships can create socio-environmental value. This particular
type of value is defined as “the sum of intrinsic ecological value and benefits that accrue to
society because of environmental improvements” (Volschenk et al., 2016, p. 7). In other words,
socio-environmental value creation reflects in the utility function for society, which also
involves intrinsic value.
Several environmental ethicists defend the idea of intrinsic value that among other things,
includes the concerns for the natural environment and biodiversity (Rolston, 1989; Scott, 2006).
In addition, intrinsic value is highlighted in international announcements for sustainable
development goals (Handl, 2012). In this context, Sandler (2012) suggests that those who have
intrinsic belief need to consider socio-environmental value, which can be determined by
applying appropriate conservation goals. The coopetition partners cannot capture socio-
environmental value because it does not include rivalrous value (Volschenk et al., 2016, p. 7).
Coopetition
47
Instead, socio-environmental value accrues, for instance, from common reduction of resource
intensity, reduction of waste or when socio-environmental value follows a positive-sum logic
in the value appropriation process (Volschenk et al., 2016). As an example, Christ et al. (2017)
have analyzed a case of two large companies in the wine industry, Accolade Wines and
Treasury Wine Estates, in which the firms engaged in a reciprocal bottling and packaging
contract. In that case, both companies shared their manufactures in Australia and England. The
coopetitive agreement enabled each company to ship their wine with less weight to their end
markets that in turn, led to reduced costs. In addition, the less needed fuel for transportation
resulted in reduced carbon footprint that constitutes socio-environmental value or a public
benefit (Christ et al., 2017).
Notwithstanding, a public good is not viewed as equal to socio-environmental value. For
instance, the establishment of a shared logistic-network between coopetition partners can lead
to a decrease of carbon dioxide emissions and also, for example, to reduced costs of road
construction. The reduction of carbon dioxide emissions can be considered as both, socio-
environmental value and public good, whereas the reduced costs of road construction constitute
only a public benefit (Volschenk et al., 2016).
Resuming the chapter of coopetition, it starts by describing coopetition based on the theoretical
foundations, resource-based view and game theory, and suggests that coopetitors shall pursue
win-win solutions with other competitors by focusing on the achievement of sustained
competitive advantage (Barney, 1991; Nalebuff et al., 1996). Next, the chapter continues with
an attempt to break up the complexity of the dynamic interplay between cooperation and
competition (Chen, 2008). In addition, the part of coopetition includes the explanation of inter-
organizational orientation between business firms and their motives (Ritala, 2012), strategic
rent-seeking behavior (Lado et al., 1997), role of proximity (Steinmo & Jakobsen, 2013) and
success factors of coopetition (Chin et al., 2008). The third section of the chapter describes
coopetition management, which includes the interplay between global rivals (Luo, 2007),
tensions and conflict management (Tidström, 2014), and the value dynamics in coopetition
(Volschenk et al., 2016).
Stakeholder-Oriented Value Creation in Coopetition
48
4. Stakeholder-Oriented Value Creation in Coopetition This chapter includes the determination of how business firms can manage and balance
coopetition to foster stakeholder-oriented value creation. In that case, it attempts to categorize
different components in coopetition that competitors need to consider by establishing industry
initiatives for sustainability. In order to find answers to the research question “How can
coopetition be managed and balanced to foster stakeholder-oriented value creation?” this
chapter screens the last two chapters, sustainability and coopetition.
For this purpose, a multidimensional framework (illustrated in Figure 9) has been developed,
which represents four different categories that can be associated with stakeholder-oriented
value creation in coopetition. These categories include inter-organizational proximity, syncretic
rent-seeking behavior, collaboration for conflict management, and socio-environmental value.
The first section describes the significance of inter-organizational proximity in coopetition. The
second part links the adaptation of syncretic rent-seeking behavior with the stakeholder and
sustainability literature. Moreover, it analyses different situations of coopetition and how
syncretic rent-seeking behavior can enhance the establishment of voluntary sustainability
standards. The third section of stakeholder-oriented value creation explains the adaptation of a
collaboration style for conflict management in coopetition. Notably, in multi-faceted
coopetition increases the complexity of the partnership, which consequently, requires high
competence in conflict management. The last subsection in this chapter covers the importance
of socio-environmental value in coopetition and emphasize on its existence in a broader
stakeholder network.
Figure 9: Multidimensional framework of stakeholder-oriented value creation in coopetition (own illustration)
Stakeholder-Oriented Value Creation in Coopetition
49
4.1. Significance of Inter-Organizational Proximity in Coopetition
The role of proximity received increased recognition in the stakeholder literature and describes
an additional attribute of stakeholder salience (Driscoll & Starik, 2004). In a stakeholder
context, inter-organizational proximity pictures the affinity of organizations for one another in
terms of complementary missions, strategies, structures, resources, or organizational members
(Driscoll & Starik, 2004). On the other hand, coopetition research indicates that various factors
of organizational, technological, and geographical proximity between competitors can
influence a coopetition success (Knoben & Oerlemans, 2006; Steinmo & Jakobsen, 2013).
Considering both arguments, it can be suggested that the higher the proximity between the
partners in coopetition, the greater the likelihood of a stakeholder relationship development,
which is necessary for a successful multi-faceted coopetition. Notwithstanding, for promoting
stakeholder-oriented value creation in coopetition, distinctions should be made between
different types of proximity.
Social proximity encourages effective communication that is beneficial for innovative
improvements, reputation, and trust (Balland, 2012; Broekel & Boschma, 2011; Letaifa &
Rabeau, 2013; Maskell & Malmberg, 1999). On the other hand, social nearness in coopetition
partners enhances productive knowledge exchanges (Hotho et al., 2012), which is also vital for
intra-industry knowledge creation and transfer (Dagnino, 2009). Additionally, high social
proximity can increase reputation and trust in coopetition (Maskell & Malmberg, 1999) and as
a consequence, the temptation for opportunistic behavior decreases (Barney & Hansen, 1994).
This implies that great social proximity between the coopetition partners is crucial for the
promotion of stakeholder-oriented value creation.
Concerning cognitive proximity, on the one hand, stakeholder literature indicates that firms in
a mutual business relationship should pursue shared values and have common perceptions,
interpretations, and evaluation of the world (Wuyts et al., 2005). Similarly, Bansal and Roth
(2000) argue that cognitive proximity between organizations matters in case of sharing similar
ideas, approaches, and actions. On the other hand, the coopetition literature suggests that for
achieving an appropriate mindset in coopetition, the partners should enlarge their perspective,
which requires a specific technique such as out-of-the-box thinking (Nalebuff et al., 1996). As
a result, this thesis assumes that coopetition partners with a high cognitive proximity tend to
Stakeholder-Oriented Value Creation in Coopetition
50
promote common values through a broader stakeholder orientation and thus, indicate an
increased probability of stakeholder-oriented value creation.
Institutional proximity relates to specific norms and rules that are established between
coopetition partners in order to coordinate their interactions (Knoben & Oerlemans, 2006).
Robust institutional proximity in coopetition facilitates collective learning and can also
encourage the decrease of knowledge tensions between involved partners (Knoben &
Oerlemans, 2006; Tidström, 2014). As a consequence, institutional proximity suggests an
essential factor for stakeholder-oriented value creation in order to transfer knowledge on
common grounds and to focus on mutual salient stakeholders.
Cultural proximity between coopetition partners concerns common understandings, routines or
interpretations, which can lead to an increase of interactive productivity and consequently, may
result in faster achievements (Knoeben & Oerlemans, 2006). The coopetition research suggests
for establishing and maintaining a successful coopetitive partnership, coopetition partners need
to create a mutual organizational culture over time (Chin et al., 2008) in order to develop
collaborative ties between the involved actors (Hamel et al., 1989). This requires respect,
understanding, acceptance, integrity, and tolerance between the coopetition partners (Chin et
al., 2008). In contrast, the stakeholder literature implies that the evaluation of stakeholder value
refers among other things to organizational justice that includes fairness, respect, and
reciprocation to stakeholders (Cropanzano & Mitchell, 2005). In conclusion, high cultural
proximity indicates to facilitate the development of a mutual organizational culture between
coopetition partners, which, in turn, supports the creation of stakeholder value.
Technological proximity describes the extent of technical knowledge a firm can generate from
other organizations (Knoeben & Oerlemans, 2006). The mutual learning aspect plays a
significant role in establishing new technological innovations. The main requirements of
gaining innovation benefits in coopetition refer to the compatibility and interoperability of the
partners’ shared resources (Chin et al., 2008) Technological proximity implies a significant
factor for stakeholder-oriented value creation in coopetition in terms of pursuing product
innovations or technological improvements in the value chain, such as cleaner production or
investing in renewable energy (Heikkurinen & Forsman-Hugg, 2011).
Stakeholder-Oriented Value Creation in Coopetition
51
The local, territorial, spatial, or physical nearness of partners refer to geographical proximity
(Broekel & Boschma, 2011). Following the stakeholder literature, Driscoll and Starik (2004)
argue that a spatial closeness enhances business firms to recognize and interact with
stakeholders. The coopetition research suggests that geographical proximity encourage
knowledge transfer and innovation because of short information paths (Knoben & Oerlemans,
2006). Moreover, geographical proximity supports the development of trust because of an
increased probability of face-to-face interactions (Ponds et al., 2007). Thus, geographical
proximity indicates a contributory factor that increases the stakeholder-orientation of coopeting
partners and thus, may foster on stakeholder-oriented value creation.
4.2. Adaptation of Syncretic Rent-Seeking Behavior The stakeholder literature implies that a stakeholder orientation describes a firm’s responsible
behavior (Heikurrinnen & Bonnedahl, 2013). Similarly, the research of coopetition indicates
that syncretic rent-seeking behavior broadens the perspective of a multidimensional framework,
which includes public (social) responsibility (Rusko, 2012). Moreover, the literature of strategic
alliances recognizes that syncretic rent-seeking behavior leads to socioeconomic progress
(Lado et al., 1997). As a consequence, the adaptation of syncretic rent-seeking behavior can be
viewed as socially responsible and thus, encourages stakeholder-oriented value creation in
coopetition.
The case of Toyota confirms this argument by providing evidence of the power of syncretic
rent-seeking behavior in buyer-supplier coopetition (Hill, 1995; Lado et al., 1997). The parallel
sourcing approach established collaboration between the suppliers and enhanced their
effectiveness to gain quicker results (Rusko, 2012). Within this example, Toyota showed social
responsibility with an increased stakeholder orientation. Moreover, the suppliers demonstrated
the power of syncretic rent-seeking, which, in turn, led to an increase in innovation
performance.
Business firms that adapt a syncretic rent-seeking behavior in coopetition have a greater
strategic flexibility that includes a broad range of strategic options to source advantages from
competition and cooperation (Lado et al., 1997). Especially on the competition side,
competitive conflicts and confrontations are considered as vital and promote “greater openness,
knowledge and understanding” between the coopetition partners (Anderson et al., 1994, p. 483).
The stakeholder orientation approach suggests that business firms should focus on stakeholders
who support and positively influence their business operations (Heikurrinnen & Bonnedahl,
Stakeholder-Oriented Value Creation in Coopetition
52
2013). These stakeholders are described as salient and can be evaluated by their power,
legitimacy, urgency, and proximity (Driscoll & Starik, 2004; Mitchell et al., 1997). In this
context, the adaptation of syncretic rent-seeking indicates to increase the transparency between
coopetition partners in order to identify salient mutual stakeholders that can be integrated into
the value creation process to foster on stakeholder-oriented value.
The stakeholder literature suggests that by applying a responsive approach, business firms can
focus on improving already existing stakeholder demands, for example, through higher labor
standards or by integrating renewable energy practices in the value chain (Heikkurinen &
Forsman-Hugg, 2011). In line with sustainability literature, sustainable practices derive from
societal demands and influence industry initiatives (Potts et al., 2014). In accordance with the
coopetition literature, the responsive approach reflects one of the underlying motives for
coopetition, which is to create efficiency in resource utilization (Ritala, 2012). Similarly, the
beyond responsive approach relates to find innovative solutions for creating new stakeholder
demands (for instance, cleaner production) and correspond with another common coopetition
motive, which is to increase the current market or create a new one (Ritala, 2012). As a result,
the adaptation of syncretic rent-seeking behavior in coopetition implies to enhance the
adaptation of a responsive or beyond responsive approach to foster on stakeholder-oriented
value.
Besides, the potential benefits of implementing sustainability initiatives correspond with the
potential benefits accruing from the adaptation of syncretic rent-seeking in coopetition.
According to Hart and Milstein (2003), the benefits of implementing sustainability initiatives
can lead to a repositioning in the market, reduce risk and costs by distribution, speed up
innovation or strengthen growth path and trajectory. On the other hand, the coopetition
literature suggests that syncretic rent-seeking behavior may lead to an increase of the
competitive position (Ritala, 2012), which can be gained by leveraging unique resources and
share costs and risks (Lado et al., 1997). Moreover, competition enhances efficiency that
promotes innovation (North, 1990), whereas cooperation emphasizes win-win situations, which
encourages growth and development (Nalebuff et al., 1996).
Expanding this idea, critical players in an industry might consider industry initiatives by
applying syncretic rent-seeking behavior and fostering on stakeholder-oriented value. For
instance, concerning horizontal relations, voluntary sustainability standards demonstrate a
potential pre-competitive platform in an industry that brings competitors together (Giovanni &
Stakeholder-Oriented Value Creation in Coopetition
53
Porte, 2005) in order to find new business opportunities, such as preserving public resources
concerning common stakeholders (Potts et al., 2014). Voluntary sustainability standards have
gained increased recognition and perceived a fast-growing market value (Potts et al., 2014).
However, the effectiveness of syncretic rent-seeking behavior depends on each coopetitive
situation. For this reason, the following paragraphs analyse different coopetitive situations in
conjunction with the adaptation of syncretic rent-seeking for establishing voluntary
sustainability standards.
It is suggested that a concentrating situation does not constitute a suitable scenario to establish
voluntary sustainability standards because it most likely involves rather small and new rivals
in few foreign markets that strive for market expansion and achieving a global scale. However,
it is important to mention that small rivals can also use a participation tactic to develop a
relationship with other key players in the industry and participate, for example, as an alliance
partner. In such a case, small rivals are advised to adapt a collaborative rent-seeking behavior
and foster on collective interest, but attention is needed to avoid strategic rigidity (Lado et al.,
1997; Luo, 2007).
In a dispersing situation, the adaptation of syncretic rent-seeking behavior may encourage the
establishment of voluntary sustainability standards. The coopetition partners can pursue a
solidification tactic and use the partners’ market power through differentiation, economies of
scale, or innovation. For instance, rivals compete in market share or position holding while they
simultaneously cooperate in sharing suppliers or other cost-effective activities (Luo, 2007).
This indicates that big players in a dispersing situation can enlarge their perspective with a
syncretic rent-seeking behavior to focus on stakeholder-oriented value. A relatively weak or
small rival may consider a defensive stance in a dispersing situation because of its premature
existence in a global environment. Nevertheless, coopetition literature suggests that a small
rival can also follow a mutual venture with other big players by focusing on the common needs
of its rival (Luo, 2007). In this case, similar to a concentrating situation, a relatively small rival
may consider the adaptation of a collaborative rent-seeking behavior.
In a connecting situation, many global competitors can use a position tactic, in which they try
to occupy a central market position and exploit available and distinctive resources (Luo, 2007).
Therefore, the adaptation of syncretic rent-seeking behavior can increase the rivals’ strategic
flexibility to search for competitive advantage and identify deficiencies that could be
Stakeholder-Oriented Value Creation in Coopetition
54
complemented through cooperation (Markiewicz & Adamus, 2012). Referring to the plasma
television industry, the example of the coopetition partnership between Mach-One with its
rivals (LG, Samsung, Sony, Hitachi, and Matsushita) shows evidence of product innovation
and technical standards (Luo, 2007). This implies that the adaptation of syncretic rent-seeking
behavior in a connecting situation may encourage global rivals to foster stakeholder value
creation in terms of product innovations and the establishment of standards.
In the networking situation, competitors can have several coopetitive relationships with
different intensities. Thus, a networking situation suggests to be very complex, but also shows
many opportunities for cooperation because of an enhanced probability of complementary
resources between rivals (Noda & Collis, 2001). In a networking situation, both situational
tactics, sponsorship and integration, show indications for the importance of the adaptation of
syncretic rent-seeking behavior. For instance, syncretic rent-seeking behavior facilitates a
sponsorship tactic by finding agreement on common grounds (win-win opportunities), such as
research and development consortia, common supply bases, or production clustering.
Concerning the integration tactic, syncretic rent-seeking behavior strives for a dynamic balance
of competition and cooperation (Lado et al., 1997), which correspond with the coordination and
allocation of resources for the partnership (Luo, 2007). Conclusively, the adaptation of
syncretic rent-seeking in a networking situation implies a crucial role in order to manage and
balance coopetition for the creation of stakeholder-oriented value.
However, in order to achieve stakeholder-oriented benefits with the adaptation of syncretic rent-
seeking behavior, the coopetition partners need coherent goals with all the partners involved
(Hamel, 1991). Divergent goals between the partners may lead to a disbalance of a cost/benefit
ratio in coopetition. As a consequence, value destruction occurs, which also leads to failure to
strengthen a firm’s competitive position (Gnyawali & Charleton, 2018; Lado et al., 1997). As
a result, the adaption of syncretic rent-seeking behavior indicates to promote stakeholder-
oriented value creation, when the coopetition partners develop and pursue common goals that
refer on mutual salient stakeholders, instead of those stakeholders who undermine the
achievement of strategic goals (Heikkurinen & Bonnedahl, 2013).
Stakeholder-Oriented Value Creation in Coopetition
55
4.3. Adaptation of Collaboration for Conflict Management Tensions arise by nature in coopetition (Tidström, 2014). For maintaining a successful
coopetitive partnership, the involved partners continuously need to manage occurring tensions
(Chin et al., 2008; Raza-Ullah et al., 2014). The coopetition literature acknowledges the
adaptation of a collaboration style as the most fruitful style for conflict management because
this approach is characterized as highly assertive and cooperative (Tidström, 2014). This
implies that the adaptation of a collaboration style supports the communication and relationship
management, which are not only key success factors in coopetition (Chin et al., 2008), but also
enhance a sustained relationship for future interactions.
A problem-solving attitude leads to effective management of conflicts and should be used in
any coopetition partnership that also involves components of competition (Afzalur Rahim et
al., 1999; Bradford et al., 2004, Tidström, 2014). With adopting a collaboration style, the
coopetition partners search for creative solutions by considering both the interests of the
coopetition network and the interests of other partners involved (Gross & Guerrero, 2000). In
this context, a multi-faceted coopetition includes two or more business firms and at least one
or more stakeholders. This indicates that a collaboration style may encourage a multi-faceted
coopetition by fostering on stakeholder-oriented value. Notably, in a networking situation of
global coopetition, the adaptation of a collaboration style may facilitate a global rival choosing
a sponsorship tactic to serve as a mediator between the other network members (Luo, 2007).
The stakeholder literature argues that business firms should assemble their different
responsibilities, including profit, people, and the planet (Freeman et al., 2010). In order to
achieve an appropriation of all three responsibilities, business firms are advised to interact with
their stakeholders (Heikurrinnen & Bonnedahl, 2013). In a coopetitive partnership such as the
syncretic-rent seeking behavior, the adaptation of a collaboration style strives for optimal win-
win outcomes and benefits that accrue to all partners involved (Lado et al., 1997; Tidström,
2014). A collaboration style is seen as integrative, highly competent, and includes a problem-
solving attitude (Afzalur Rahim et al., 1999; Bradford et al., 2004; Tidström, 2014). These
aspects indicate to support coopetition partners in relationship development to foster on
stakeholder-oriented value creation in terms of finding consensus in the stakeholder network
and mutual business opportunities between the focal firms in an industry.
Stakeholder-Oriented Value Creation in Coopetition
56
The coopetition literature implies that the adaptation of a collaboration style is beneficial to
resolve all types of tensions (Bradford et al., 2004). For instance, role tension arises when the
partners’ objectives derive from the objective of the coopetitive agreement (Bengtsson & Kock,
2003). Thus, before engaging in coopetition, the alignment of the firms’ strategic objectives
represents a crucial act in the cooperation process (Bengtsson & Kock, 2003; Chen, 2008).
Afterwards, common goals are pursued independently in competition (Bengtsson & Kock,
1999). In this context, the adaptation of a collaboration style helps coopetition partners to align
common objectives (Tidström, 2014). Additionally, the network literature and the stakeholder
literature predict higher firm performance when competitors integrate their stakeholder interests
and strategic goals, instead of having conflicting views toward stakeholders’ objectives (Dyer
& Singh, 1998; Freeman, 1984; Freeman et al., 2007). In conclusion, the adaptation of a
collaboration style can mitigate role tensions in coopetition and thus, facilitates the alignment
of the strategic goals of the coopetition partners and the stakeholders involved.
Knowledge tension arises when a partner overly restraint its knowledge that is important for
the coopetitive agreement (Tidström, 2014). In order to mitigate knowledge tension, an
adequate information system helps to maintain the interchange of data and ensures effective
communication (Friedman & Barnes, 1992). Besides, the adaptation of a collaboration style
can moderate knowledge tensions by adopting a problem-solving attitude and increases the
information flow throughout the coopetition agreement.
Another type of tensions concerns the interplay between power and dependence (Osarenkhoe,
2010). For instance, a dominant firm can use its power on a smaller partner against its interests,
which leads to a specific dependency. When the dominant firm receives valuable resources, the
firm may disengage from the agreement that constitutes an imbalance of power and dependency
in the whole partnership. Consequently, the imbalance of power between the firms may lead to
a loss of competitive advantage (Luo, 2007). In turn, the adaptation of a collaboration style can
assist in counteracting on an imbalance of a power and dependence tension by monitoring and
reacting on conflicts between partners that can influence the whole coopetition partnership.
The third type of tension relates to opportunism (Lado et al., 1997; Osarenkhoe, 2010), which
is described as the exploitation of a partner’s resources by pursuing self-interest and using guile
(Tjosvold et al., 2010). As delineated in the game theory subsection (3.1.2.), especially in multi-
partner coopetition, opportunistic behavior is tempting because of the harm allocation, difficult
Stakeholder-Oriented Value Creation in Coopetition
57
detection, and lack of controllability (Zeng & Chen, 2003). Therefore, trust and commitment
represent essential components for mitigating opportunistic behavior (Chin et al., 2008). Trust
serves as a mediator for conflicts (Anderson & Narus, 1990), and commitment encourages the
maintenance of a valued relationship (Morrman et al., 1992). Therefore, the adaptation of a
collaboration style is essential for managing opportunism tension in coopetition. Moreover,
trust and commitment positively influence a collaboration style to prevent opportunism and
encourage common intentions that consider all of the partners’ interests.
4.4. Importance of Socio-Environmental Value
The socio-environmental value represents a public good and plays a significant role in
stakeholder-oriented value creation in coopetition. The stakeholder literature indicates that a
firm should merge its economic, social, and environmental responsibilities through its
stakeholders (Freeman et al., 2010). Similarly, the sustainability literature contains suggestions
for business firms in the global economy to intervene in its systems and processes by social and
environmental engagement (Hart & Milstein, 2003). From this contextual perspective, Susniene
and Vanagas (2006) emphasize that other stakeholders enclose business firms in the network,
whose behavior is partly influenced by how the firms treat their stakeholders.
The coopetition research, on the other hand, implies that the value net model of coopetition
(section 3.1.2.) shows where coopetition partners can detect socio-environmental issues and
create socio-environmental value and thus, fostering on stakeholder-oriented value creation. In
addition, the value net model considers a broad stakeholder view, including primary and
secondary stakeholders (Freeman et al., 2010). Especially, suppliers and customers of
coopetition partners may represent potential stakeholders for creating socio-environmental
value in coopetition. Coopetition partners can pursue socio-environmental initiatives by
reducing their resource intensity or focusing on the reduction of waste. Moreover, socio-
environmental value can be achieved when coopetition partners pursue a positive-sum logic in
the appropriation process (Volschenk et al., 2016). Following a resource-based perspective, the
analysis of different stakeholder relationships can help to assess the resources of coopetition
partners and detect deficiencies that could be complemented through cooperation (Markiewicz
& Adamus, 2012). Although the coopetition partners cannot obtain socio-environmental value,
Volschenk et al. (2016) suggest that it can be leveraged to enhance wealth and prosperity for
interdependent mutual stakeholders. Considering the arguments mentioned above, coopetition
partners that pursue the incentive to find solutions for socio-environmental issues may have an
increased likelihood of encouraging stakeholder-oriented value creation.
Stakeholder-Oriented Value Creation in Coopetition
58
The value that is created in coopetition cannot be created by each firm in isolation but requires
the mutual contribution of idiosyncratic resources (Volschenk et al., 2016). How stakeholders
perceive stakeholder value depends on the suitability of the value in the stakeholders’ utility
function (Harrison & Wicks, 2013).
Real goods and services can be perceived as transparent vehicles of value, which can be
addressed to create socio-environmental value (Porter & Kramer, 2011). Additionally, in
coopetition, organizational justice indicates to have a positive effect on the creation of socio-
environmental value, because when multiple stakeholders are involved in the value creation
process, the actors’ interdependence implies a significant influence on the relationship and
outcome (Ekeh, 1974). The affiliation between organizations also suggests encouraging socio-
environmental value creation. This can be explained by the fact that positive relations between
organizations promote common interests (Putnam, 2000) and encourages collective actions for
a common good (Hartman & Phillips, 2011). For instance, in coopetition, competitors in an
industry can establish voluntary sustainability standards in order to preserve public resources
(Potts et al., 2014). Despite the rivalrous value in coopetition, public benefits include societal
and environmental factors. Thus, public benefits, such as the reduction of carbon dioxide
emissions, represents socio-environmental value (Volschenk et al., 2016). Coopetitive actions
can either destroy or create value for society and involved firms (Volschenk et al., 2016).
Considering only economic value in coopetition has been criticized for leaving additional
hidden value aside, which goes beyond financial benefits (Harrison & Wicks, 2013).
Consequently, disregarding socio-environmental impacts in coopetition are viewed as sub-
optimal (Freeman, 1984; Harrison & Wicks, 2013; Volschenk et al., 2016).
In order to increase the awareness and importance for socio-environmental value, business
firms that engage in coopetition should acknowledge and internalize the concept of ubiquity.
Certain stakeholder groups are essential for the growth of sustainability (for example, the poor
or natural environment) but are viewed as less salient than others (Hart & Milstein, 2003).
Several non-governmental organizations constitute a vital voice channel for sustainability-
related stakeholders, which affect business concerns (Heikkurinen & Bonnedahl, 2013). Thus,
an increased perception of the natural environment as a primordial stakeholder may lead to a
higher probability that coopetitors create socio-environmental value in coopetition.
Conclusion
59
5. Conclusion The thesis is built on and extends the understanding of stakeholder-oriented value creation in
coopetition. The objective of this thesis was to answer the research question “How can
coopetition be managed and balanced to foster stakeholder-oriented value creation?”. In order
to provide an appropriate answer, the analysis of the theory was split into three parts. The aim
of the first part was to clarify the meaning of stakeholder-oriented value creation in a
sustainability context. The second part intended to provide a comprehensive analysis of a
coopetitive perspective in order to find different factors that are essential for the dynamic
management and balance of coopetition. Finally, the third part included the connection of both
research streams, which has provided a closer examination on stakeholder-oriented value
creation in coopetition. For this purpose, a game theoretical and resource-based lens was
applied. The results suggested that high inter-organizational proximity, the adaptation of
syncretic rent-seeking behavior, the adaptation of a collaboration style for conflict
management, and the endeavor to create socio-environmental value increases the probability to
foster stakeholder-oriented value creation in coopetition.
5.1. Discussion and Theoretical Contribution The first contribution of the thesis outlines that there is a connection between inter-
organizational proximity and stakeholder-oriented value creation in coopetition (Bansal &
Roth, 2000; Chin et al., 2008; Driscoll & Starik, 2004; Knoben & Oerlemans, 2006; Steinmo
& Jakobsen, 2013). The following six types of proximity justify the connection of nearness
between the coopetition partners and the stakeholder-oriented value creation in coopetition.
(1) Social proximity increases trust and reputation, which is essential for relationship
development between the partners. (2) High cognitive proximity between business firms is
relevant for sharing a similar mindset about the coopetitive partnership and to mutually
encourage stakeholder-oriented value creation. Additionally, (3) robust institutional proximity
indicates an essential criterion for collective learning and the decrease of knowledge tension
(Knoben & Oerlemans, 2006; Tidström, 2014). (4) Close cultural proximity in coopetition also
facilitates stakeholder-oriented value creation. Bengtsson and Kocks (1999) point out that
common goals encourage closer proximity between the actors. Strategic goals are stipulated
mutually in cooperation, but are pursued independently in the competition (Bengtsson & Kock,
1999). Therefore, the development of a mutual organizational culture is essential for a
successful coopetitive partnership (Chin et al., 2008). (5) Technological proximity indicates a
vital factor of stakeholder-oriented value creation, assuming that the coopetitive agreement
Conclusion
60
includes the development of technological innovations. Last but not least, (6) close
geographical proximity enhances stakeholder interactions and is critical for knowledge
exchange and the development of trust because of short information paths and face-to-face
communications (Driscoll & Starik, 2004; Knoben & Oerlemans, 2006; Ponds et al., 2007).
Nevertheless, it is vital to take a critical look at inter-organizational proximity because great
proximity facilitates stakeholder-oriented value creation. Whereas too close inter-
organizational proximity, especially concerning technological proximity, may increase the
temptation for opportunistic behavior, and as a consequence, leads to value destruction in the
coopetition partnership. Therefore, it requires attention to find out to what extent inter-
organizational proximity is supportive and to which degree it may constitute a significant risk
of failure in coopetition.
The second contribution of the thesis highlights the fact that the adaptation of syncretic rent-
seeking behavior facilitates coopetition partners to foster stakeholder-oriented value creation
(Heikurrinen & Bonnedahl, 2013; Lado et al., 1997). Several arguments can assure this
statement. Syncretic rent-seeking represents a socially responsible behavior (Heikurrinnen &
Bonnedahl, 2013; Lado et al., 1997; Rusko, 2012) and thus, facilitates a comprehensive
stakeholder orientation. Additionally, syncretic rent-seeking behavior provides strategic
flexibility that may lead to an increase in the transparency between the coopetition partners in
order to identify salient mutual stakeholders. Expanding this idea, strategic flexibility may
encourage the actors to strategically looking ahead and reason backwards (Nalebuff et al., 1996)
by considering all elements of the PARTS-model in coopetition (Players, added values, rules
and tactics, scope) (Nalebuff et al., 1996) to increase the likelihood of stakeholder value
creation.
Syncretic rent-seeking provides suitable traits for stakeholder value creation that enables
competitive efficiency for innovation (North, 1990) and cooperative win-win situations, which
enhance growth and development (Nalebuff et al., 1996). On the cooperation side, the power
interdependence between the coopetition partners rests on functional factors regarding the value
chain. Stakeholder orientation in the value chain can, therefore, be directed to suppliers,
customers, the wider community, and the natural environment to solve sustainable issues. On
the competitive side, the power interdependence between competitors in the network can be
associated with the competitors’ strengths and positions (Bengtsson & Kock, 1999).
Conclusion
61
By adopting a syncretic rent-seeking behavior, coopetitors should also be aware of managerial,
input-based, transformational, and output-based competencies. Notably, in case of output-based
competencies, reputation and trust in coopetition can be increased not only by social proximity
(Maskell & Malmberg, 1999) but also by syncretic rent-seeking behavior (Lado et al., 1997).
For instance, the participation in certification contests (Rao, 1994; Spence, 1973) may increase
a firm’s legitimacy towards stakeholders while trustworthiness between the partners decreases
opportunistic behavior (Barney & Hansen, 1994).
However, a critical view rests on syncretic rent-seeking because it may fail to enhance a firms’
position when the costs of the coopetition partnership predominate the generated benefits (Lado
et al., 1997). The more partners are involved in a multi-faceted coopetition, the more expensive
is the partnership and, hence, requires an appropriate management. Additionally, syncretic rent-
seeking behavior can only be effective when there is congruence between the strategic goals of
all the partners involved.
The third contribution of the thesis emphasizing the significance of adopting a constructive
collaboration style for managing conflicts in multi-faceted coopetition (Rusko, 2011; Tidström,
2014). From a game-theoretical perspective, such as rent-seeking behavior, the collaboration
style strives for managing conflicts constructively and seeks to generates win-win solutions,
benefiting all involved partners (Lado et al., 1997; Tidström, 2014). Besides, identical to the
value net model of coopetition (Nalebuff et al., 1996), a collaboration style widens the
coopetitors’ perspective that integrates the own and the interests of the coopetition network,
which in turn, fosters horizontal and vertical stakeholder relationships of a focal firm.
The results also indicate that a collaboration style mitigates all shapes of tensions (Bradford et
al., 2014) including role tension, knowledge tension, power and dependence, and opportunism
(Bengtsson & Kock, 2003; Chin et al., 2008; Lado et al., 1997; Osarenkhoe, 2010; Tsai, 2002).
In this context, the coopetition partners pursue an integrative approach, which fosters effective
conflict management. Notably, in multi-partner coopetition, the social dilemma approach
(Section 3.1.2.) outlines the importance to prevent opportunism. Such as the drivers
(competencies) for syncretic rent-seeking behavior, trust and commitment serve as two key
requirements to enhance a collaboration style in order to discourage opportunism and also to
promote collective intentions in the coopetition network.
Conclusion
62
As a fourth contribution, the thesis extends the contextual perspective on socio-environmental
value in conjunction with stakeholder-oriented value creation in coopetition. Although socio-
environmental value is construed as inaccessible for coopetition partners (Voslchenk et al.,
2016), it suggests an increase of wealth and prosperity for interdependent mutual stakeholders
that are essential for a firm’s success. The results of the thesis reveal that by focusing on the
creation of socio-environmental value, it will increase a firm’s performance in the long term,
which is associated with increased growth and development in the stakeholders’ network.
Coopetition partners need to acknowledge that a collaboration between competitors create
value for the whole market (Della Corte & Aria, 2016), especially when the coopetition partners
internalize the concept of ubiquity (Driscoll & Starik, 2004). The perception of the natural
environment as a primordial stakeholder supports the orientation towards the creation of socio-
environmental value. Besides, references can be drawn to cognitive proximity that it relates to
intrinsic value that matters in case of sharing similar ideas, approaches, and actions (Bansal &
Roth, 2000). Another vital aspect refers to the integrity of socio-environmental value in
stakeholders’ utility function (Harrison & Wicks, 2013). Organizational justice and affiliation
between organizations represent supportive indicators that can encourage socio-environmental
value creation and thus, encourage collective actions for a common good (Hartman & Phillips,
2011).
5.2. Managerial Implications The thesis provides several implications for management. This section outlines the main aspects
of the results and theoretical contributions in the frame of industry initiatives for sustainability.
Moreover, it entails suggestions what competitors in an industry need to consider for
establishing a coopetitive partnership in order to create stakeholder-oriented value creation.
The cognitive proximity between industry competitors matters for voluntary sustainability
standards in case of having common perceptions, shared values, interpretations and evaluation
of the world (Bansal & Roth, 2000; Giovannucci & Ponte, 2005; Wuyts et al., 2005). These
common perceptions and shared values can be associated with the ethical responsibility
concerning sustainability issues (Carroll, 1991). In order to establish a sustainable industry
initiative in multi-faceted coopetition, the partners should establish an ethical philosophy
defined in advance (Giovannucci & Ponte, 2005).
Social proximity provides further implications for the establishment of industry initiatives for
sustainability. Potts et al. (2014) point out that an increasing number of organizations getting
Conclusion
63
involved in standard-setting and implementation processes. Social nearness among industry
competitors is essential in order to enhance their productivity in knowledge exchanges (Hotho
et al., 2012), which encourages intra-industry knowledge creation and transfer (Dagnino, 2009).
In addition, the findings imply that vital players in an industry more likely consider industry
initiatives for sustainability by adopting syncretic rent-seeking behavior that can lead to an
increased market position, reduced risks and costs by distribution, speed up innovation and
strengthen growth and development (Hart & Milstein, 2003; Lado et al., 1997). However, the
appropriateness of establishing industry initiatives depends on specific situational conditions
of coopetition.
Furthermore, a concentrating situation does not provide sufficient conditions for industry
competitors to establish voluntary sustainability standards with a high sustainable impact
because the small firms still need to develop a more impactful scale in a global environment.
However, the dispersing situation, connecting situation, and networking situation (in section
3.4.1.) represent more functional conditions to implement sustainability standards in global
coopetition (Luo, 2007).
In a dispersing situation, by pursuing a solidification tactic, coopetition partners can use their
market power through differentiation, economies of scale, or innovation (Luo, 2007). Although
it involves a small number of rivals, a dispersing situation implies to encourage the
implementation of voluntary sustainability standards in many foreign markets.
Concerning a connecting situation, firms such as Mach-One in the plasma television industry
or Tata Motors in the automobile industry, represent examples for successful coopetition by
having joint research and development, shared marketing and the establishing industry
standards. However, both strategic tactics in connecting situations are also suitable for initiating
voluntary sustainability standards by applying a responsive or a beyond responsive approach
(Heikkurinen & Bonnedahl, 2013; Luo, 2007). The position tactic refers to exploiting available
and distinctive resources, which can be pursued by applying a responsive approach. In contrast,
the differentiation tactic relates to the creation of product innovation or technical standards that
can be pursued by applying a beyond responsive approach (Heikkurinen & Bonnedahl, 2013;
Luo, 2007). The findings also indicate that the adaptation of syncretic rent-seeking behavior
promotes a stakeholder-oriented value creation in pursuing a differentiation and position tactic
in a connecting situation.
In the networking situation, rivals can pursue a sponsorship tactic, which allows them to form
a platform for common grounds and cooperative opportunities (Luo, 2007). For instance, in the
Conclusion
64
tire industry, Michelin made a multilateral agreement to its competitors for providing a new
service innovation that leads to a new industry standard (Dagnino, 2009). However,
interestingly, the “pax system” failed because of missing attention from other stakeholders in
the network, such as car manufacturers and service stations (Adner, 2012). Correspondingly,
voluntary sustainability standards demonstrate a potential pre-competitive platform in an
industry that brings competitors and other stakeholders together. The findings imply that the
adaptation of syncretic rent-seeking behavior enhances a sponsorship tactic in a networking
situation and claims the facilitation of establishing industry initiatives for sustainability.
Additionally, Competitors need to consider the adaptation of a collaboration style for conflict
management to support the establishment of industry initiatives for sustainability in terms of
the search for consensus and mutual business opportunities among vital players in an industry
(Giovannuci & Ponte, 2005). Especially in a multi-faceted coopetition, the adaptation of a
collaboration style indicates a significant factor for managing the complexity of the partnership
that includes the dismantling of conflicts constructively and the maintenance of a cooperative
environment with additional stakeholders (Gross-Guerrero, 2000; Tidström, 2014). Moreover,
the adaptation of a collaboration style promotes communication and relationship development
in multi-faceted coopetition and is fruitful for solving any types of occurring tension in
coopetition (Bradford et al., 2004).
For the preservation of public resources, the findings suggest that competitors in different
industries need to acknowledge the importance of socio-environmental value. Socio-
environmental issues can be addressed by focusing on products and markets, a new
determination of productivity in the value chain, or by the empowerment of enabling cluster
developments (Porter & Kramer, 2011). To establish industry initiatives for sustainability,
business firms can create socio-environmental value by implementing certifications for
products or services, label definitions, or the setting of codes of conduct (Giovannucci & Ponte,
2005). Despite the fast-growing market value in private sectors, sustainable practices infer from
societal demands. Societal demands are outlined in international announcements for sustainable
development goals and are associated with, for instance, poverty, climate change, or
environmental degradation (Handl, 2012; United Nations, 2015). Moreover, societal demands
relate to global grand challenges that require coordinative actions between multiple
stakeholders to enhance global partnerships (George et al. 2016). Therefore, the creation of
Conclusion
65
socio-environmental value indicates a crucial factor for both the stakeholder-oriented value
creation in coopetition and the establishment of voluntary sustainability standards.
Finally, the managerial implications suggest on a policy level that attention is needed from the
government in order to support industry initiatives for sustainability that are essential for a
country’s economic wealth. By providing political commitment to detect systemic issues and
encourage the course of development, competitors in different industries can be empowered to
establish memberships of respective institutions and increasingly collaborate with different
stakeholders to establish industry initiatives for sustainability.
5.3. Limitations and Future Research
The purpose of the thesis is to build bridges among the existing coopetition and stakeholder
literature to develop a multidimensional framework in order to describe stakeholder-oriented
value creation in coopetition. However, several limitations need to be considered. In addition,
the detected findings need further theoretical and empirical evidence to prove its importance
compared to the existing literature.
The methodology of a conceptual literature review was used to find opportunities and
restrictions for creating stakeholder-oriented value in coopetition. In this context, one has to
regard that the outcome of this study may not be fully objective because other sources of
information to further validate the generated findings are still missing. This may be a potential
field for future research.
Moreover, the multidimensional framework of stakeholder-oriented value creation in
coopetition is probably not exhaustive and might include additional dimensions. Therefore,
future research can investigate more into relational aspects of cooperative networks and have a
closer examination on competitive dynamics in order to identify further categories of
stakeholder-oriented value creation in coopetitive relationships.
Another limitation is that the thesis might have constraints in providing a sufficient analysis of
opportunities in order to prevent opportunism in strategic alliances. For that reason, future
research can further investigate strategic alliances and collective real options (Smit &
Trigeorgis, 2006) in conjunction with stakeholder-oriented value creation in coopetition.
The thesis also explains stakeholder-oriented value creation in global coopetition. Further
studies could explicitly investigate in, for example, triadic relationships in coopetition. In that
case, future research can focus on multi-partner alliances and generalized exchanges (Thorgren,
Wincent, & Eriksson, 2011) in order to promote stakeholder-oriented value creation.
Conclusion
66
In addition, empirical studies can also include observations and qualitative research of different
industry settings in coopetition. In this context, additional insights are required to examine
different industries with increasing societal demands that promote the establishment of
sustainability initiatives. Some of the industry constellations may involve a dispersing,
connecting, or networking situation that provides conducive circumstances for establishing
voluntary sustainability standards.
Expanding the idea of stakeholder-oriented value creation, the results of this master thesis can
be used to conduct an experiment of a coopetitive partnership that focuses on stakeholder-
oriented value creation. With this experiment, additional research can be conducted to
determine a precise strategy and the specific objectives needed for a successful implementation.
The novel multidimensional framework of stakeholder-oriented value creation in coopetition
provides a different point of view in order to find solutions by establishing a creative
environment and collaborative platform for coopetition partners and additional stakeholders.
This is the reason why the emerging field of stakeholder-oriented value creation in coopetition
is ripe for further development. It can draw upon theoretical and empirical investigations,
including a broad range of different industries, social and environmental concerns, economic
conditions, cultural differences or upon the balance of created social and environmental
advantages and invested costs. Those factors can be included in future studies to explain the
long-term success of a sustainability-related coopetition partnership that fosters on stakeholder-
oriented value creation.
References
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Affidavit
I hereby declare that this Master’s thesis has been written only by the undersigned and without
any assistance from third parties. I confirm that no sources have been used in the preparation
of this thesis other than those indicated in the thesis itself.
This Master’s thesis has heretofore not been submitted or published elsewhere, neither in its
present form, nor in a similar version.
Innsbruck, May 29th, 2019
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