Abstract
Business conditions on international markets are now changing more rapidly, which creates pressure on firms, and especially on small- and medium-sized firms – SMEs, to rethink their strategies. Changing business conditions are challenging. However, they also give birth to opportunities. In order to meet the challenges and capture the opportunities, coopetition is a relevant strategic choice for SMEs. Reduction of costs and risks is a rationale for coopetition. Another rationale is access to external resources. Results from research and news in business media implies that coopetition is not that uncommon. On the other hand, especially research also recommends that coopetition, in the meaning of cooperation with a competitor generally should be avoided.
In coopetition there is a tension between cooperation and competition. The fundamental logic in coopetition builds on the fact that the partners collectively create value, but individually exploit it. Balancing cooperation with competition is important, since once friendly colleagues can revert to hostile enemies if the balancing act fails. Fernandez et al. (2014b) propose separation and integration as options for managing tension in coopetition. For a firm, an integration of a contradictory logic of interaction is possible to embrace, but it is difficult for individuals. In SMEs, the strategic decision making is concentrated to a few key persons, in many cases to the entrepreneur only, which implies that he or she should play the role of partner and competitor at the same time. In multinational firms, it is possible to separate the cooperative and competitive activities on different subsidiaries, markets, divisions, business units, projects and key responsible managers. This is hardly possible in SMEs.
It is relevant to further investigate the nature and causes of tension between cooperation and competition and how the SMEs could manage it. The purpose of the paper is to conceptually discuss the nature and causes of tension in coopetition between SMEs.
In coopetition there is a tension between cooperation and competition. The fundamental logic in coopetition builds on the fact that the partners collectively create value, but individually exploit it. Balancing cooperation with competition is important, since once friendly colleagues can revert to hostile enemies if the balancing act fails. Fernandez et al. (2014b) propose separation and integration as options for managing tension in coopetition. For a firm, an integration of a contradictory logic of interaction is possible to embrace, but it is difficult for individuals. In SMEs, the strategic decision making is concentrated to a few key persons, in many cases to the entrepreneur only, which implies that he or she should play the role of partner and competitor at the same time. In multinational firms, it is possible to separate the cooperative and competitive activities on different subsidiaries, markets, divisions, business units, projects and key responsible managers. This is hardly possible in SMEs.
It is relevant to further investigate the nature and causes of tension between cooperation and competition and how the SMEs could manage it. The purpose of the paper is to conceptually discuss the nature and causes of tension in coopetition between SMEs.
| Original language | English |
|---|---|
| Title of host publication | Proceedings of The 20th McGill International Entrepreneurship Conference |
| Publication date | 2016 |
| Publication status | Published - 2016 |
| MoE publication type | B3 Article in conference proceedings |
| Event | The 20th McGill International Entrepreneurship Conference - Vaasa, Finland Duration: 23.08.2016 → 25.08.2016 Conference number: 20th |
Keywords
- 512 Business and Management
- Coopetition
- Cooperation between competitors
- Tension
- SMEs