Collaborating with your Rivals: Identifying Sources of Coopetitive Performance

1
Collaborating with your Rivals Identifying
Sources of Co-opetitive Performance

• Farah Abdallah- PhD Student
• Prof. Anu Wadhwa
• Druid Conference June 2009

EPFL-CdM-CET Odyssea CH-1015 Lausanne Tel. 41
693 00 08 Fax. [phone] eMail
farah.abdallah_at_epfl.ch http//cet.epfl.ch
2
Introduction

• Definition and Motivation
• Co-opetition
• Firms achieve superior performance by being
  simultaneously engaged in collaborative and
  competitive relationships. (Brandenburger and
  Nalebuff1995)
• ICTs are an enabler for the arise of
  co-opetition Standard Setting Organizations
  (SSOs)
• Objectives
• How firms can improve their performance in
  co-opetitive networks with their rivals?
• What is a co-opetitive performance?
• What are the sources of co-opetitive performance?
  

3
Co-opetitive Performance

• The quest for a definition for co-opetitive
  performance
• Co-opetition collaborating in creating a pie,
  and competing in splitting the pie gt Existing
  definition of performance are not indicative of
  how well a firm perform in a co-opetitive context
  
• The focus of the definition
• Co-opetitive relationship where collaboration
  occurs between rival firms in the same network at
  the technological and market levels
• Literature on coopetitive performance argues
• Firms achieve greater performance through
  co-opetition(Lado. Boyd et al. 1997)
• A high level of coopetitive performance is
  associated with a high level of competition and a
  high level collaboration (Luo 2007 Chin, chan et
  al. 2008)

4
Coopetitive Performance
Competitive performance The ratio of the value
appropriated by the firm and the value added by
it
Competition
Co-opetition
Collaboration
Monopoly

• Collaborative performance Share of the value
  added by the firm to the total value created by
  the network of rivals of which the firm is a part
  of

5
The sources of co-opetitive performance

• A source of co-opetitive performance is a set of
  resources and capabilities that affect
  simultaneously the collaborative and competitive
  performance of a firm.
• Strategy literature treated the sources of
  collaborative and competitive performances
  separately which leads to some paradoxical
  results
• Our model identifies three potential sources of
  coopetitive performance 1- network resources 2-
  absorptive capacity 3- relational capability

6
(No Transcript)
7
Conclusion

• In this paper we propose a model which helps in
  detecting the firms which are deficiently
  co-opeting in their network, and identify the
  proper resources and capabilities that should be
  developed within the firm in order to enhance its
  co-opetitive performance.
• Future Work empirical survey to postal operators
  to tests the propositions
• Thank you !

8
Tushman Anderson 1986 Technological
discontonuity and organizational environment

• Technology is defined as those tools, devices and
  knowledge that mediate between inputs and outputs
  (process technology) and or create new products
  or services (Rosenberg 1972)
• Technology is a central force in shaping the
  environment competition (rise and fall of
  population)
• Technological change can be
• Pontaneous event driven by technological genius
  (Shumpeter)
• A function of historical necessity and economic
  demand
• Competitive uncertainty will be higher after a
  technological discontinuity (Uncertainty The
  extend to which we can predict the environement)
• Environmental munificience will behigher after
  technological discontinuity (Munificience the
  extend the environment can suppport growth)

9
Tushman Rosenkopf 1992Organizational
determinants of technological change

• The interaction of technological options with
  organization and interorganization dynamics that
  shapes the actual path of technolgical progress
• Non-assembled products Aluminium, paper/
  technological progress occurs in process or
  material/ merits are in quality and efficiency
• Simple assembled product skis/ made through a
  set of interlinked steps that are sequentially
  ordered/ technical progress through process,
  material or product substitution/ merits in
  price/performance
• Closed Assembled system automobile and
  television some sbsystem are more central then
  other and are produced by a single organization/
  technical progress at the subsystem or linkage
  level
• Open systems the product is a function of
  networked compoents working together railroads,
  computer

10
(No Transcript)
11
Tushman Rosenkopf 1992Organizational
determinants of technological change

• Techology can be described as systems ranging
  from non-assembled closed systems to open
  systems. The greater the product compexity the
  greater the intrusion of organizational dynamics
  in technological evolution

12
(No Transcript)
13
Tushman Rosenkopf 1992Organizational
determinants of technological change

• Towards a sociology of technological evolution
• Under which conditions do organization dynamics
  affect the path of technical progress
• They find that technologies eveolve through the
  combination of random and chance events, the
  direct action of organiaztion shaping the
  industry standards, and the competition between
  organiaztion

14
(No Transcript)
15
The sources of coopetitive performance

• Network resources complementary resources and
  primal position in the network
• Proposition 1 A firm increases its
  collaborative performance (a) by bringing
  distinctive resources to the coopetitive network,
  and (b) by combining the complementary resources
  in the coopetitive network.
• Proposition 2 A firm increases its competitive
  performance by occupying a central or/and
  structurally autonomous position in the
  coopetitive network.

16
The sources of coopetitive performance

• Absorptive capacity
• Zahra and George (2002) defined absorptive
  capacity of a firm as a set of organizational
  routines and processes by which firms acquire,
  assimilate, transform, and exploit knowledge to
  produce dynamic organizational capability(P185).
• Cohen and Levinthal (1990) defined the absorptive
  capacity as a firms ability to recognize the
  value, assimilate and apply new knowledge
• Dyer and Singh (1998) defined partner-specific
  ACAP as the firms ability to recognize and
  assimilate valuable knowledge from a particular
  alliance
• Proposition 3 The greater the PACAP of a firm,
  i.e. its acquisition and assimilation
  capabilities, the greater the collaborative
  performance of the firm.
• Proposition 4 The greater the RACAP of a firm,
  i.e. its transformation and exploitation
  capabilities, the greater the competitive
  performance of the firm.

17
The sources of coopetitive performance

• Effective Relationship governance Strong
  trustworthiness and contractual management
  capabilities
• A firm faces the challenge of employing
  governance mechanisms that achieve concurrently
  the objectives of (1) maximizing the value
  created while (2) minimizing the threat of
  opportunism.
• Proposition 5 Firms developing effective
  governance mechanisms with their partners in the
  coopetitive network, develop more easily common
  goals and coordinate better, hence have a high
  collaborative performance.
• Proposition 6 Firms developing effective
  governance mechanisms with their partners in the
  coopetitive network, reduce the threat of
  opportunism, by imposing costs on opportunistic
  actors and defining equity contracts, and hence
  have a high competitive performance.