towards a framework for managing strategic tensions in dyadic interorganizational relationships

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SCAMAN-881; No. of Pages 9

Towards a framework for managing strategictensions in dyadic interorganizationalrelationships

Paul C. van Fenema a,*, Claudia Loebbecke b

a Faculty of Military Sciences, Netherlands Defence Academy, P.O. Box 9002, 4800 PA Breda, The NetherlandsbDepartment of Business, Media and Technology Management, University of Cologne, Pohligstr. 1, 50969Koeln, Germany

Scandinavian Journal of Management (2014) xxx, xxx—xxx

KEYWORDSTension management;Value creation;Value distribution;Interorganizationalrelationship

Summary Current literature lacks a coherent framework for analyzing how organizations caneffectively deal with tensions arising in their dyadic interorganizational relationships. Ourobjective is to develop such a framework, focusing on two common strategic tensions: valuecreation and distribution. Extending the tension management literature, our framework builds ontheories on structures and behavioral processes, as well as strategies for dealing with tensions.We analyze active, hybrid, and passive response trajectories to understand how organizations usestructures and behavioral process to deal with value creation and distribution tensions and toexamine the consequences of their stances. The conceptual paper concludes with opportunitiesfor future research in the area of tension management and interorganizational cooperation.# 2014 Elsevier Ltd. All rights reserved.

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Introduction

Interorganizational cooperation enables value creation thatexceeds what organizations can achieve on their own (Dyer &Singh, 1998; Gulati & Singh, 1998; Shaw & Holland, 2010).Cooperation takes several forms such as sharing market oppor-tunities or combining capabilities and resources (Vlaar, vanden Bosch, & Volberda, 2006a). As organizations link theirprocesses, information systems, and knowledge cycles (Faraj& Sproull, 2000; Gibson, 2001; Kumar & van Dissel, 1996), theyenjoy the benefits of external services while concentrating on

Please cite this article in press as: van Fenema, P. C., & Loebbecke, Cinterorganizational relationships. Scandinavian Journal of Managemen

* Corresponding author. Tel.: +31 76 5273878; fax: +31 76 5273255.E-mail addresses: [email protected] (P.C. van Fenema),

[email protected] (C. Loebbecke).

http://dx.doi.org/10.1016/j.scaman.2014.03.0020956-5221/# 2014 Elsevier Ltd. All rights reserved.

their core knowledge, resources and relationships (vanFenema & Beeres, 2010). Since the late 1980s, companiesand scholars have become aware of (potentially) negativeaspects of interorganizational cooperation. Business environ-ments, strategic choices, and evolution processes of organiza-tions that cooperate may differ over time (Vlaar, van denBosch, & Volberda, 2006b). Operational and knowledge depen-dencies emerge between organizations. Contract and poweraspects of interorganizational relationships may evolve notentirely matching the interests of the cooperating organiza-tions (Buvik & Reve, 2002; Dekker, 2004). Organizations mayexperience tensions for instance between short and long terminterests, and between knowledge exploration and exploita-tion (Heiman & Nickerson, 2004). We define tensions as contra-dictory relationships between courses of actions of twoorganizational actors at the strategic level; they refer tocontradictory demands placed on organizations and in

. Towards a framework for managing strategic tensions in dyadict (2014), http://dx.doi.org/10.1016/j.scaman.2014.03.002

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2 P.C. van Fenema, C. Loebbecke

particular on management (Smith & Lewis, 2011). More spe-cifically, we refer to interorganizational tensions, that is, acontradiction between intended and experienced value crea-tion and distribution (Aime, 2007). In the case of contradictionwith regard to value creation, organizations do not materializean increase of value they hoped for (Oliver, 1991; Porter &Kramer, 2011); cooperation does not extend value creation ofeach organization. In the case of contradiction with regard tovalue distribution, accumulation of value does not equallysatisfy both organizations’ interests (Aime, 2007; Gulati &Singh, 1998).

In this paper, we concentrate on dyadic interorganiza-tional cooperation, eliminating networks consisting of multi-ple organizations or alliance portfolios (Aime, 2007; Provan,Fish, & Sydow, 2007). While we focus on the strategic level ofdyadic cooperation, we also recognize that units of analysiswithin organizations play a role (Perlow, Gittell, & Katz,2004; Yin, 2009). Accordingly, we include organizationalstructures, behavioral processes and organizational strate-gies. Yet we exclude micro-level aspects such as interperso-nal conflict behaviors in order to stay focused on our topic,interorganizational cooperation and tension management.

Tension, risk, and conflict management are related butdistinct. First, tension management explores ways to handlecontradictory requirements likely to emerge in interorgani-zational cooperation. It thereby partly differs from riskmanagement, which refers to (potential) internal and exter-nal threats to sustaining value creation (Kleindorfer & Wind,2009). Second, tension management precedes conflict man-agement. Tensions may evolve into conflicts, for instancewhen organizations fail to pay attention to them or when thecontradictory quality of the relationship takes the upperhand. Hence, conflict management relates to a later stageof (legal) escalation and to longer term effects of tensionsand tension management (Gupta & Polonsky, 2013).

In this work, we concentrate on the initial stages oftension management after the initial ‘honeymoon’ stage(Luo, Shenkar, & Gurnani, 2008), soon after operationalcooperation has started. Literature notes the risk of tensions;this calls for a framework and tools to detect and managethese tensions.

Background

We ground our work in four research streams bearing rele-vance to tensions management in dyadic interorganizationalcooperation. First, literature on alliance managementexplains why alliances are formed (Ireland, Hitt, & Vaidya-nath, 2002) and points at the role of generic mechanisms suchas training, experience and alliance managers (Draulans, deMan, & Volberda, 2003; Spekman, Forbes III, Isabella, &MacAvoy, 1998). Scholars have become interested in ‘how’questions and recognize the emergence of tensions (Spekmanet al., 1998). However, limited attention has been paid tohow tensions are managed.

Second, systems literature on interorganizational infor-mation systems acknowledges tensions, failures, and adap-tation challenges (Rodon & Sese, 2010) for instance formanaging their operational workflows and supply chains.Operational interdependence is believed to influence thelikelihood of tensions to occur (Kumar & van Dissel, 1996).


Yet, this literature offers little insight in managing tensionsand preventing them from evolving into conflicts.

Third, literature in organizational behavior and organiza-tion science acknowledges instabilities, dynamics and com-plexities of interorganizational relations, pointing to amixture of formal and informal processes such as contractsand sense-making (Vlaar, van den Bosch, & Volberda, 2006b)and appropriate coordination and control mechanisms (Git-tell, 2002; Grandori, 1997). The adopted contingency per-spective explains why one particular strategy or organizationstructure would be selected. However, this stream of litera-ture does not address the dynamic challenge of detecting andmanaging tensions (Smith & Lewis, 2011).

Fourth, an emerging stream of literature on paradox andtension management offers tools for understanding tensioncycles (Eisenhardt, 2000; Smith & Lewis, 2011) — even withonly limited specific guidance in the sense of organizationalchoices.

Objective and research framework

The objective of this paper is to build a framework fordetecting and managing tensions in dyadic interorganiza-tional cooperation extending current work on interorganiza-tional structure, behavioral processes and strategies. Fig. 1summarizes our proposed tension management frameworkdiscussed in this paper. Tensions are considered contradictoryrelationships between courses of actions of two organiza-tional actors at the strategic level; they are barriers to thestrategic interests that motivate interorganizational coop-eration. We conceptualize tension management (dark graytriangle) based on the three dimensions—structures, beha-vioral processes and organizational strategies.

This paper is structured as follows. In the next section, weelaborate on interorganizational value creation and tensionsthat may emerge. In the Structures and Behavioral Processesfor Tension Management section, we then look at two dimen-sions tension management: structures (governance mechan-isms), and behavioral processes (cycle of tensionmanagement), before we elaborate on trajectories of inter-organizational interaction and tension management before weelaborate on trajectories of interorganizational interactionand tension management trajectories. The last section con-cludes with contributions and suggestions for future research.

Interorganizational value creation andtensions

In advanced economies, organizations’ value creation relieson knowledge or knowledge-intense products and services(Felin & Hesterly, 2007). Increasingly, organizations partnerwith other organizations to strengthen their value creation,defined as benefits versus costs (Sirmon, Hitt, & Ireland,2007). Value-enhancing synergy is achieved when organiza-tions get access to each other’s infrastructures and markets,complementary resources, cross-organizational learning,and opportunities for economies of scale and (transaction)cost reduction (Austin & Seitanidi, 2012; Ireland et al., 2002).It demands relationship building, interorganizational govern-ance and operational linkages (Tiwari, 2010). Producingknowledge-intense products and services requires knowledge



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Figure 1 Tension management framework.

Framework for managing strategic tensions 3

coordination within and across organizational boundaries(Aarikka-Stenroos & Jaakola, 2012; Gittell & Weiss, 2004).Within their boundaries, organizations foster ‘‘team-situatedinteractions aimed at managing resources and expertisedependencies’’ (Faraj & Sproull, 2000: 1555), transformingthemselves into open knowledge processing systems (Tsou-kas, 2009).

Across organizational boundaries (Delmas & Toffel, 2008;Marabelli & Newell, 2012), organizations increasingly pushgroups and leaders to share knowledge (Levina & Vaast,2005). This demands sophisticated and timely knowledgemanagement processes that complement and extend thoserelated to an organization’s core competencies (Tiwana &Keil, 2007). New collaborative processes emerge to solveproblems involving both organizations (Aarikka-Stenroos &Jaakola, 2012). Liaisons and teams with members of bothorganizations offer a platform for sharing knowledge, devel-oping new processes, and materializing innovations (Malho-tra, Majchrzak, Carman, & Lott, 2001).

Even with strong strategic motives to create joint value,interorganizational cooperation frequently introduces ten-sions (Ireland et al., 2002). Organizations’ culture and logicsmay prove highly diverse (Uiterwijk, Soeters, & van Fenema,2013); strategic objectives may be vague and difficult tooperationalize (Hoffmann & Schlosser, 2001); organizationsmay behave opportunistically (Hamel, Doz, & Prahalad,1989); and poor planning and intense operational interde-pendence increase the likelihood of conflicts (Kumar & vanDissel, 1996; Spekman et al., 1998). Tensions in interorgani-zational relationships precede conflict management, whichmakes them important to identify and manage. Organizationsworking together partially agree on their joint course ofaction. Commonly, contradictions remain as organizationshave their own interests, make their own choices and facetheir own responsibilities. Conflicts arise when interests startto clash, i.e. when choices of one organization negativelyimpact those of another organization. Many interorganiza-tional tensions may be solved at the operational and middle


management level. Yet some could become a concern forstrategic managers. We focus on these contradictionsbetween intended and experienced value creation and dis-tribution (Aime, 2007; Ben-Khedher, Kintanar, Queille, &Stripling, 1998).

Value creation touches upon the very reasons for coop-erating, the metaphorical larger pie (Wagner, Eggert, &Lindemann, 2010). If organizations cannot benefit from eachother’s infrastructures and resources, or they cannot benefitfrom economies of scale, their cooperation is in jeopardy.Tensions arise when cooperation does not yield new value:synergies between both organizations’ processes fail tomaterialize. Specifically, understanding value as the differ-ence between benefits and costs, a lack of new value mayresult from constraints to create new benefits or high costlevels. Benefits would depend on combining organizations’resources and markets to offer new opportunities to collec-tive customers (Jacobides, Knudsen, & Augier, 2006). Risingcost levels may be caused by differences of organization’sbusiness, cultural differences and geographical distance.

Value distribution (also denoted in the literature as appro-priation) refers to the extent to which organizations equallybenefit from new collective knowledge (Dekker, 2004) andnew value resulting from cooperating. In brief, what ‘slice ofthe pie’ they will get (Wagner et al., 2010). Benefits for oneof the partners may exceed collective benefits at the inter-organizational level (Ireland et al., 2002). Or cost distribu-tion may prove unequal. Inequality may result fromintentionally opportunistic behavior or may just emerge asa pattern in the relationship (Ben-Khedher et al., 1998).Moreover, competitive pressure (Ritala & Hurmelinna-Lauk-kanen, 2009), mobility of assets (Jacobides et al., 2006), andpower differences may underpin inequality, with one orga-nization being able to take advantage of its partner’s weak-nesses (Lavie, 2007). Detecting and managing value creationand distribution tensions represent a formidable task forstrategic managers, requiring more research (Spekmanet al., 1998).



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Structures and behavioral processes fortension management

Dimension 1: structures for dealing with tensions

Literature on dyadic interorganizational cooperation,including alliances, lists numerous structural mechanismsfor managing across organizational boundaries. At a govern-ance level, examples include alliance agreements and con-tracts (Mulford & Rogers, 1982; Sobrero & Schrader, 1998). Atthe strategic and operational level, examples include jointgoal setting and planning, liaisons, dedicated units, andtraining (Draulans et al., 2003). Depending on the stage ofcooperation, such mechanisms foster collective learning andknowledge sharing (Gupta & Polonsky, 2013), coordination(Vlaar, van den Bosch, & Volberda, 2006a), and control(Dekker, 2004). Structure is concerned with the arrange-ment of people, departments, and other subsystems in theorganization (Fry, 1982) and describes organizational gov-ernance mechanisms (Grandori, 1997). In interorganiza-tional relationships, structures encompass for instancealliance managers or contracts. A first structural contin-gency factor is the scope of work. The larger the scope ofinterorganizational cooperation (i.e. more projects, moredepartments involved), the more challenging managementof interorganizational cooperation becomes (Schilke &Goerzen, 2010). We propose:

Proposition 1. The larger the scope of interorganizationalcooperation, the more organizations rely on interorganiza-tional structures to resolve tensions.

Task-related contingency factors influence the role ofcoordination and control mechanisms. Based on the proper-ties of work and consequences for coordination and control toget the work done, more structured mechanisms (e.g. pro-cedures) are used when task uncertainty and task interde-pendence are low (Grandori, 1997; Kumar, van Fenema, &von Glinow, 2009). Tasks are understood and can be specifiedin detail, and information processing remains limited. Struc-ture represents a mechanism with low coordination andcontrol costs. Alternatively, behavioral (non-structured)mechanisms are used to refine understandings (Vlaaret al., 2006a), such as mutual adjustment and sensemaking(Gittell, 2002; Vlaar, van Fenema, & Tiwari, 2008). Wepropose:

Proposition 2. The lower the level of task uncertainty andtask interdependence, the more organizations use structuredcoordination and control mechanisms rather than behavior(non-structured) mechanisms to resolve tensions.

Interorganizational appropriation is affected by the rela-tion between task uncertainty and task interdependence(Gulati & Singh, 1998). Higher levels of task uncertaintyand task interdependence, for instance when organizationsco-develop a new product or service (Malhotra et al., 2001),lead to more concerns with respect to appropriation. Orga-nizations are expected to put more emphasis on (hierarch-ical) structure (Ben-Khedher et al., 1998). From an


appropriation point of view, structures reduce coordinationand control costs (Dekker, 2004). We propose:

Proposition 3. The lower the level of task uncertainty andtask interdependence, the less organizations experienceappropriation tensions, and the less they will need to relyon structured coordination and control mechanisms for man-aging these tensions.

Dimension 2: behavioral processes for dealingwith tensions

Turning to behavioral processes, we draw on tension manage-ment theory. This behavior-oriented perspective (Hamelet al., 1989) acknowledges the contradictory demands orga-nizations face in a globally connected business environment,e.g. demands of empowerment and enslavement or of depen-dence and independence (Jarvenpaa & Loebbecke, 2009).Traditionally, researchers considered the contradictory, dua-listic elements of tensions as mutually exclusive in an onto-logical and epistemological sense. Smith and Lewis (2011)probe for new perspectives and propose four stages of ten-sion management:

� Noting tensions: Tensions become salient where organiza-tion members make explicit statements of tensions per-taining to their work or work environment (Chanin &Shapiro, 1985). Organization members try to balance tightcontrol of interorganizational processes with the freedomto spur innovation. Noting latent tensions relates to dri-vers in an environmental (e.g. scarcity) and cognitivesense (frames and processes allowing for paradoxes).� Choosing a tension management strategy: An organiza-tion’s strategy for managing tensions depends on its mem-bers’ need for consistency and how they handle emotions.Moreover, organizational forces for inertia and environ-mental conditions play a role in choosing a tension man-agement strategy (Smith & Lewis, 2011).� Coping with cycles emerging from tension management:An organization’s strategy for dealing with tensions influ-ences to a large extent the type of cycle it ends up with.That is, how a pattern of evolving interactions can bequalified (vicious or virtuous).� Developing capabilities: The type of cycle (vicious orvirtuous) drives organizational capability building.

For building our framework, we propose two changes tothese four stages. First, we separate behavior and tensionmanagement strategy. This enables us to elaborate on awider range of strategies. Second, in order to explain theway actors move through these stages, we integrate Gibson’s(2001) model of socio-cognitive processes. It is built on fourprocesses as shown — each with three subprocesses: accu-mulation (perceiving, filtering, storing); interaction (retriev-ing, exchanging, structuring), examination (negotiating,interpreting, evaluating), and accommodation (integrating,deciding, acting).

We merge the four main processes with Smith and Smithand Lewis’ (2011) tension management stages to understandbehavioral processes of tension management (see Table 1).



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Table 1 Patterns of tension management behavior, after Gibson (2001).

Process/stage 1 2 3 4

Factors Accumulationa Interactiona Examinationa Accommodationa

Noting tensionsb Choosing atensionmanagementstrategyb

Coping withcyclesemergingfrom tensionmanagementb

Developingcapabilitiesb

Factor task uncertainty " " #Factor role ambiguity " " #Factor feedback "Factor conflict " " #Factor leadership "Factor social comparison: discrepancies # " "Factor routines "Factor consensus "

Arrows indicate high or low importance of a particular process depending on a number of factors. Gray shading highlights positive effects,e.g. more task uncertainty leads to more accumulation.a After Gibson (2001).b After Smith and Lewis (2011).


Furthermore, we relate the processes and stages to factorsexplaining their importance to organizations. These factorsare derived from Gibson’s (2001) model of socio-cognitiveprocesses.

The first four factors (task uncertainty, role ambiguity,feedback, and conflict1) lead to more emphasis on initialprocesses. The remaining four factors (leadership, socialcomparison, routines and consensus) are linked to laterprocesses. The latter refer to cooperation that seems moremature with established leadership, routines and consensus.When social comparison leads to discrepancies (e.g. in caseof global sourcing), groups invest in examining their owngroup and counterpart.

Integrating dimensions 1 (structures) and 2(behavioral processes)

Contingency factors such as task uncertainty and task inter-dependence (dimension 1) can be related to factors recog-nized in dimension 2 literature: task uncertainty, roleambiguity and conflict. In case of high information processingneeds misunderstandings are likely. Hence, organizationsrely less on structures, but rather on behavioral processes(mutual adjustment and sensemaking). They put an emphasison the accumulation and interaction stages (Table 1). Wepropose:

Proposition 4. The higher the levels of task uncertainty, taskinterdependence, role ambiguity and conflict, the moreimportant are behavioral processes (mutual adjustmentand sensemaking) associated with accumulation and interac-tion stages.


1 Following Gibson (2001), conflict is used here as a contingencyfactor, and not elaborated as a micro-level social process.

Conversely, conditions of low levels of task uncertainty,task interdependence, role ambiguity and conflict are typi-cally associated with structured mechanisms, as work can bedefined comprehensively ex ante. Organizations may haveexperience working together and shared knowledge. Theyhave structures in place that could be understood in terms offactors recognized in behavioral process theory, e.g. leader-ship, social comparison, routines and consensus. Developedover time, such structures allow organizations to rapidly shiftto developing capabilities, the final stage of tension manage-ment.

Proposition 5. The greater the role of leadership, socialcomparison, routines and consensus in organizations, themore rapidly organizations shift toward the developing ca-pabilities stage.

Dimension 3: organizational strategies formanaging tension

Faced with threats not to achieve the strategic objectivesregarding their cooperation, organizations choose how theyrespond, depending on the extent to which they want tocontinue cooperation in the future (Williamson, 1991), coop-eration with the partner organization cooperation so far andlikelihood of cooperation in the near future (Rangan, Samii, &van Wassenhove, 2006). Smith and Lewis (2011) distinguishtwo strategies: defensive and accepting. The defensive strat-egy, aimed at protecting a preferred understanding of selfand context (Bettis & Prahalad, 1995), consists of repression,denial, and splitting. The accepting strategy reflects open-ness to various aspects of the present situation in relation toformerly held understandings. It enables exploring newdirections for their relationship (Arbuthnott, Eriksson, &Wincent, 2010). Dissonance characterizing this relationshipis accepted and explored.



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Strategies for managing tension and comparable socialconditions have been also explored in social science litera-tures on pressure, diversity, pluralism, and conflict (Aaltonen& Sivonen, 2009; Panteli & Sockalingham, 2005). Thesestudies address such conditions at different levels, e.g.societal groups, organizations, and micro-level conflicts.Authors seem to agree on a passive-active continuum, ran-ging from accommodating to defensive.

On the passive end of the continuum, which Smith andLewis (2011) call defensive, previous works found segrega-tion at a societal level (Berry, 1974), i.e. rejecting externalnorms. Institutional theory proposes manipulating, defying(Oliver, 1991), dismissing, and influencing (Aaltonen & Sivo-nen, 2009). On the active end of the continuum, researchrefers to assimilation when a group loses its identity as itdissolves in a larger social milieu (Berry, 1974). Institutionaltheory refers to acquiesce (Oliver, 1991) or adaptation (Aal-tonen & Sivonen, 2009).

Between these passive and active strategies we distin-guish a hybrid position, which resembles Smith and Lewis’(2011) accepting strategy. It marries openness to the partnerorganization with reconsidering (not passively abandoning)formerly held internal understandings. Similarly, sociologicalresearch proposes integration between a group and thesociety it lives in (Berry, 1974); institutional theory refersto compromising (Aaltonen & Sivonen, 2009; Oliver, 1991).

Organizations can position themselves along this conti-nuum ranging from passive via hybrid to active.

Trajectories: interorganizational interactionand tension management

We have developed a framework for detecting and managingtensions in dyadic interorganizational cooperation with threedimensions. We now examine the interorganizationaldynamics of tension management, along the passive-activecontinuum of tension management strategies. We proposefour possible trajectories. We link these trajectories to bothvalue creation and distribution tensions as well as findingsfrom dimensions 1 (structures) and 2 (behavioral processes).

Trajectory 1: mutually passive strategies

Organizations adopt a passive stance in the face of tensions,which makes them dependent on each other. The cooperationtransforms into a slow moving debate and may come to astandstill.

� Reverting to the factors influencing both structure andbehavior, in situations of low levels of task uncertainty,task interdependence, role ambiguity and conflict, orga-nizations do not rigidly insist on structures in place such as acontract. Their final stages of the tension management mayno longer work, yet passive strategies do not enter theminto earlier stages. Value creation does not take off asorganizations anticipated. Even though this seems a matterof executing structures and drawing on routines (behavioralprocess), it becomes unlikely to improve. Problems of valuedistribution likewise are not likely to get resolved.� High levels of task uncertainty, task interdependence, roleambiguity and conflict lead to an even less promising


situation. Structures are not in place and behavioralprocesses, associated with accumulation and interaction,stagnate. While organizations depend on a joint behavior-al process to fuel value creation (Groenroos, 2011), thisprocess is undermined by the passive stance. Hence, wepropose:

Proposition 6. The more the two cooperating organizationsadopt a passive strategy, the less their value creation anddistribution tensions will be resolved, especially when taskuncertainty, task interdependence, role ambiguity and con-flict are high.

Trajectory 2: passive-active strategies

One organization adapts to its counterpart.

� With low levels of task uncertainty, task interdependence,role ambiguity and conflict, the active partner will usestructures (e.g. contractual stipulations) if these match itsinterests; it will pursue its goals regardless of the struc-tures if they do not match. The active organization movesto the final stages of the tension management cycle yetwithout consulting its passive partner. With value creationunder threat, the passive organization becomes depen-dent on value created by the active organization. Value islikely to accrue at the active organization — almost hier-archically dictating its partner. The passive partner is notcountering this force with its own controls (Ben-Khedheret al., 1998), making equal sharing unlikely. It may evenhave to cease autonomous operations.� In case of high levels of task uncertainty, task interdepen-dence, role ambiguity and conflict, structures are absent.Interaction fails. Organizations lack innovative, interac-tive approaches to foster value creation. The cooperationprocess is likely to fail. Tensions jeopardizing value distri-bution do not play any role.

Proposition 7. If the two cooperating organizationsadopt contrasting strategies (passive versus active), themore the passive partner will adapt to the active partnerand depend on its approach to value creation and distribu-tion. When task uncertainty, task interdependence, roleambiguity and conflict are high, value creation is unlikelyto evolve.

Trajectory 3: hybrid strategies

Both organizations position themselves between passive andactive tension management.

� In case of low levels of task uncertainty, task interdepen-dence, role ambiguity and conflict, organizations realizethat their structures do not work. They engage in initialbehavioral processes to rethink their own and their coun-terpart’s role in joint value creation and distribution.Structures may be reconsidered and adapted to createvalue and distribute it equally, possibly leading to newstructures, routines and.



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� High levels of task uncertainty, task interdependence, roleambiguity and conflict put even more emphasis on initialstage behavioral processes, yet without the advantage ofstructures developed earlier in the cooperation. Notingtensions and choosing a tension management strategydemand high investments from both organizations. Suc-cessfully pursuing hybrid strategies depends on long termcommitment, resources, synergetic value creation andequal value distribution.

Proposition 8. The more the two cooperating organizationspursue hybrid (between passive and active) strategies, themore they engage in initial behavioral processes, especiallywhen task uncertainty, task interdependence, role ambiguityand conflict are high. Value creation and distribution dependon their commitment, resources and initial successes.

Trajectory 4: mutually active strategies

When both organizations opt for the active strategies, theyclash with little room for compromise.

� In situations of low levels of task uncertainty, task inter-dependence, role ambiguity and conflict, with clear struc-tures for coordination and control, organizations willprobably end their cooperation. Their routines do notseem to work. When value creation is the dominatingtension, organizations stick to their interpretation offailure. Value creation may collapse. In case of valuedistribution problems, organizations consider existingstructures with their own interests in mind. Legal fightsmay follow to exploit structures such as patents andcontractual stipulations.� In case of high levels of task uncertainty, task interdepen-dence, role ambiguity and conflict, organizations lackstructures. Their active strategies may launch intensebehavioral processes, yet with little chance of reducingtensions. Interorganizational value creation suffers fromorganizations’ sticking to their own perspective and mere-ly trying to influence their counterpart. Unequal valuedistribution is unlikely to improve as organizations focuson pursuing their interests.

Proposition 9. The more the two cooperating organizationsadopt an active strategy, the less likely value creation anddistribution tensions are to be resolved. In case of low levelsof task uncertainty, task interdependence, role ambiguityand conflict, organizations stick to structures in place; in caseof high levels of these factors, they tend to fight withoutconsidering their counterpart’s stand point.

Contributions and suggestions for futureresearch

Dyadic cooperation between organizations promises valuecreating opportunities as resources are shared and mutualknowledge is newly combined (Smith, Carroll, & Ashford,1995; Spekman et al., 1998). Such cooperation also causes


strategic tensions when organizations experience contradic-tory demands in the process of jointly creating value anddistributing it equally. In this context, we contribute a frame-work for detecting and managing tensions in dyadic inter-organizational cooperation.

Our framework is built around two strategic tensions,value creation and value distribution. We combine literatureson structures and behavioral processes and examine the roleof key contingency factors (task uncertainty, task interde-pendence, role ambiguity and conflict). Moreover, we ela-borate on a passive-active continuum of strategies formanaging tensions and suggest four trajectories for pursuingthose strategies: mutually passive, passive-active, hybridand mutually active strategies.

Having developed the proposed framework, we suggestfour lines for future research.

First, relating literatures on structures and behavioralprocesses to tension management strategies, we haveextended the accepting-defensive dichotomy (Smith &Lewis, 2011). Future research may want to consider howorganizations develop and use their interorganizational cap-abilities for dealing with tensions. Strategic consciousnessand control thus becomes an important area for inquiry(Goold & Quinn, 1990; Schreyoegg & Steinmann, 1987).Researchers could also examine the interplay of interorga-nizational and organizational topics considering more openorganizational boundaries (Lewin, Massini, & Peeters, 2011;Malhotra et al., 2001).

Second, we concentrated on the management of tensionsin dyadic interorganizational relationship. Missing are orga-nizational properties (e.g. size, maturity, power in supplychains), and how these properties influence dyadic relation-ships. Future research could include these aspects to validateour framework and revise our propositions.

Third, our focus was on short term tension management.Given that longer term learning is highly relevant in today’ssocio-economic, military, and political networks (Kleindorfer& Wind, 2009; Soeters, van Fenema, & Beeres, 2010), weenvision future research that elaborates on longer term learn-ing and on the relationship between organizational, interor-ganizational and network level tension management (Aime,2007; Provan & Kenis, 2008; Sarkar, Aulakh, & Madhok, 2009).

Finally, while we examined dyadic cooperation, studyingmultiple organizations will gain importance. Each organiza-tion has its own interests and brings its own modus operandi.Insights into tension management may contribute to theirability to explore and exploit opportunities for joint valuecreation (Sytch & Gulati, 2008).

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Aime, F. (2007). Collaborating and competing? Uncoupling valuecreation and value appropriation in strategic alliances. (unpub-lished doctoral dissertation) East Lansing, MI: Michigan StateUniversity.


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