Sources and management of tension in co-opetition case evidence from telecommunications satellites manufacturing in Europe

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Highlights

  • Three levels of coopetitive tensions are highlighted: inter-organizational, intra-organizational and inter-individual

  • Multiple sources of coopetitive tensions are investigated and characterized at each level

  • Empirical evidence to the implementation of the separation principle to efficiently manage coopetition at the three levels

  • Empirical evidence to the implementation of the integration principle to efficiently manage coopetition at the three levels

  • Effective management of co-opetition is about being able to effectively combine simultaneously both separation and integration principles

Abstract

Co-opetition is filled with tension due to inherent contradictory and opposing forces. In this research, we develop a multi-level conceptual framework that helps to understand key drivers of tension in co-opetition and key approaches to managing the tension. We combine literature-based conceptual arguments and insights from in-depth study of one exemplar case of co-opetition between Astrium (EADS group) and Thales Alenia Space (Thales group) within the sector of telecommunications satellites manufacturing in Europe. Our findings highlight multiple sources of co-opetitive tension at different levels. Further, our research shows that a mixed organization based on both separation and integration of competition and cooperation is helpful to understand and effectively manage tension in co-opetition. This paper offers case-based rich insights on the sources and management of tension and has important implications for the design and conduct of future empirical research.

Introduction

Co-opetition strategy, defined as the simultaneous pursuit of cooperation and competition among firms, is suggested by scholars as being critical for firm performance (Bengtsson and Kock, 1999, Gnyawali et al., 2008, Pellegrin-Boucher et al., 2013, Teece, 1992, Yami et al., 2010). While the pursuit co-opetition strategy has the potential to create competitive advantages, it is quite challenging to pursue due to very high levels of tension involved in co-opetition (Gnyawali et al., 2012, Lewis et al., 2002) as it embodies opposing forces of competition and collaboration and the need to work together to generate higher common value and the need to compete with each other to get a large portion of the value (Bengtsson and Kock, 2000, Gnyawali and Park, 2011, Walley, 2007). These tensions can be very strong and could jeopardize effective pursuit of co-opetition (Bonel & Rocco, 2007).

Despite the surge of scholarly interest on co-opetition and its management practice, less attention has been paid to the sources and management of tension associated to co-opetition. While the literature has stressed the existence of tension and has begun to uncover the causes and nature of tension in co-opetition, our understanding of this important phenomenon is clearly lacking. Examination of the sources of tension and ways of managing tension thus is critical to develop a theory of co-opetition (Chen, 2008, Gnyawali and Park, 2011, Walley, 2007). Previous research on these questions has been mainly theoretical (Chen, 2008, Clarke-Hill et al., 2003, Das and Teng, 2000, De Rond and Bouchikhi, 2004, Gnyawali et al., 2008). Empirical studies are very rare (Bengtsson & Kock, 2000). This paper aims to address this critical gap by focusing on two questions: (a) what are the sources of tension in co-opetition? (b) How do firms manage tension in their co-opetitive relationships?

Researchers generally propose two opposite principles to manage co-opetition: separation and integration. In the separation principle, Bengtsson and Kock (2000) recommend a functional or a product–market separation of the management of cooperation and competition. Separation could also be achieved by a third actor entrusted to manage the cooperation (Castaldo, Möellering, Grosso, & Zerbini, 2010). Internal tensions are likely to be low when competition and cooperation are separated. However, other scholars express an opposite point of view in which collaboration and competition should not be separated but integrated. The integration principle underscores the importance of viewing competition and collaboration as simultaneous forces and the need to adopt more holistic and integrative mechanisms (Chen, 2008, Gnyawali et al., 2008). While these approaches appear meaningful conceptually, we know little about whether and to what extent these approaches work and help in managing tension in co-opetition. Research evidence is needed to better understand whether one approach could be better than the other and how firms manage these approaches.

We address these questions by first providing a conceptual discussion of tension in co-opetition. Conceptual insights developed in the first part of the paper are used to deeply investigate co-opetition, tension in co-opetition, and management of tension using an exemplar business case of co-opetition. The case is between two European manufacturers of telecommunication satellites — Astrium (EADS group) and TAS (Thales group) in the European space industry. Our case study examines three levels—inter-organizational, intra-organizational and inter-individual—in order to develop a richer understanding of the multi-level nature and sources of tension.

We contribute to the co-opetition literature in several ways. First, we develop literature-based and case-based insights to understand the nature and sources of tension in co-opetition. Scholars have recognized that co-opetition entails tension (Gnyawali & Park, 2011), but have rarely explored the sources and the dimensions of such tensions. Our results reveal various dimensions and multiple sources of co-opetitive tensions at the inter-organizational, intra-organizational, and inter-individual levels. Second, we develop insights on how firms could manage tension and generate beneficial outcomes from co-opetition. Most of previous scholars insist on the importance of managing co-opetition tension (Gnyawali and Park, 2011, Walley, 2007) but do not explain how to manage it. Insights from our multilevel case study help to understand how various managerial approaches could be useful to deal co-opetitive tension at various levels. Our findings suggest critical role of ordering parties, project teams, and project managers in dealing with tension at multiple levels. Moreover, our results suggest that a combination of both separation and integration principles is to be achieved in effectively dealing with co-opetition. Third, our paper based on rich conceptual development and in-depth case study provides a solid basis for the design and conduct of large-scale empirical research, which is very critical in order to advance our understanding of co-opetition and its implications. Finally, our findings illuminate the role of cognitive and behavioral factors in understanding co-opetitive situations and in managing tension from co-opetition. We show that tension in co-opetition seems to stem mainly from cognitive factors whereas behavioral factors seem critical in the management of tension.

Section snippets

Co-opetition: A relationship full of tension

Brandenburger and Nalebuff (1996) have defined co-opetition quite broadly, such as a value-net involving the focal firm's interplay with customers, suppliers, complementors, and competitors. Gnyawali and Park (2011) and Bengtsson and Kock (2000) define co-opetition more narrowly with a focus on dyadic interplay between two firms that compete and cooperate with each other simultaneously. Since a narrow definition allows a better understanding of the concept and its implications (Bengtsson &

In-depth case study

Bengtsson, Eriksson, and Wincent (2010) recommend a case study to better understand co-opetition challenges. Case-based exploratory methods seem very appropriate to understand a phenomenon that is poorly understood (Eisenhardt, 1989) and that has multiple and complex elements (Dodgson, Mathews, Kastelle, & Hu, 2008) which evolve over time (Langley, 1999). In-depth study explores and details a multi-faceted and paradoxical phenomenon of co-opetition (Gnyawali & Park, 2011). Accordingly, we

Tensions due to the ordering party

After having decided to develop a common platform, Astrium and TAS had to set up an appropriate organization to support the collaboration. Two-mixed project teams between competing organizations had to collaborate intimately (as illustrated in Fig. 2).

The two ordering parties, CNES and ESA, constituted the first team. The two manufacturers, Astrium and TAS, constituted the second team. Our interviews suggested that tensions arose within both teams and between them, and thus underscored the

The key role of ordering parties in managing inter-organizational co-opetitive tensions

Alphabus governance was shared between four organizations: CNES and ESA on one hand — the institutional common team, and on the other hand, TAS and Astrium, the industrial organization. The constitution of a common institutional was an essential dimension of the project cohesion and of the collaboration within the project. The legitimacy of CNES and ESA to be involved in the project, beyond financial considerations, was reinforced. CNES and ESA played a clear role in the organization and in the

Discussion

This research aimed at answering two important questions: (a) what are the sources of tensions in co-opetition? (b) How do the firms manage tensions arising from co-opetition? We investigated these questions by first developing key conceptual insights related to the sources and management of tensions and then by conducting an in-depth case study to illuminate important findings. Finding from the case study enabled us to better understand and illustrate multiple sources of co-opetitive tension

Contributions

With a focus on sources co-opetitive tensions and ways of managing them, this study contributes to co-opetition literature in several important ways. First, while scholars stressed the existence of tension in co-opetition (Gnyawali and Park, 2011, Gnyawali et al., 2008, Gomes-Casseres, 1994) little is known about the dimensions and sources of co-opetitive tensions. The case study conducted provides insights to fill this important gap in the literature. Our findings highlight three levels of

Anne-Sophie Fernandez is an Assistant Professor in Strategic Management at the University of Montpellier 1 (Institute of Science of Enterprise and Management — ISEM) and a member of the Montpellier Research in Management research team. Her research focused on how firms effectively manage co-opetition strategies, which deals with the management of paradoxes and tensions. She is specifically interested in high-tech industries and collaborative innovation. She has already published several

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  • Cited by (0)

    Anne-Sophie Fernandez is an Assistant Professor in Strategic Management at the University of Montpellier 1 (Institute of Science of Enterprise and Management — ISEM) and a member of the Montpellier Research in Management research team. Her research focused on how firms effectively manage co-opetition strategies, which deals with the management of paradoxes and tensions. She is specifically interested in high-tech industries and collaborative innovation. She has already published several articles on these topics.

    Frédéric Le Roy is a Professor in Strategic Management at the University of Montpellier 1 (Institute of Science of Enterprise and Management — ISEM) and GSCM — Montpellier Business School, France. He is the Dean of Research of ISEM and the Director of the Master Consulting in Management. He published many research articles and several books. His current research relates primarily to co-opetition strategy. Besides, he develops research on entrepreneurship and strategy in high-tech industries.

    Devi R. Gnyawali (Ph.D. University of Pittsburgh, USA) is the R. B. Pamplin Professor of Management and the Director of Graduate Programs at the Department of Management, Virginia Polytechnic Institute and State University (commonly known as Virginia Tech). His current research focuses on two main areas in strategic management: (a) the role of a firm's internal and relational resources on its ability to generate innovations and achieve competitive advantage, and (b) the drivers, nature, and implications of inter-firm co-opetition. His research has been published in several high quality journals, including Academy of Management Journal, Academy of Management Review, Information Systems Research, Journal of Management, and Journal of Management Studies.

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