Tension in coopetition between small- and medium-sized firms

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientific

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.
Original languageEnglish
Title of host publicationProceedings of The 20th McGill International Entrepreneurship Conference
Publication date2016
Publication statusPublished - 2016
MoE publication typeB3 Article in conference proceedings
EventThe 20th McGill International Entrepreneurship Conference - Vaasa, Finland
Duration: 23.08.201625.08.2016
Conference number: 20th

Keywords

  • 512 Business and Management
  • Coopetition
  • Cooperation between competitors
  • Tension
  • SMEs

Fingerprint Dive into the research topics of 'Tension in coopetition between small- and medium-sized firms'. Together they form a unique fingerprint.

  • Cite this

    Virtanen, H., & Kock, S. (2016). Tension in coopetition between small- and medium-sized firms. In Proceedings of The 20th McGill International Entrepreneurship Conference