Coopeti titi tion w on with F Frene nemies: Towar ards s Mo Modelin ling o of S Sim imulta ltaneous Coop ooperation on and nd C Comp ompetition on Vik Pant and Eric Yu University of Toronto, Toronto, Canada
Agenda 1. Introduction 2. Enterprise Cooperation, Competition, And Coopetition 3. Emerging Requirements For Modeling Enterprise Coopetition 1. Key Features of Coopetitive Relationships 2. Strategic Competition Between Enterprises 3. Tensions in Paradoxical Relationships 4. Complementarity, Interdependence, Trustworthiness, And Reciprocity 5. Example: Inter-partner Learning & Knowledge-sharing Among Enterprises 4. Conclusions And Future Work 2
1. I Introduc ducti tion on 3
Multifaceted Relationships Among Digital Natives 4
Multifaceted Relationships Among Digital Natives 5
Multifaceted Relationships Among Digital Natives Launched rental car service Volvo tests self-driving Hertz rental system on cars are used to Uber offer rides to coalition for Lyft customers GM, Volvo, Ford supply autonomous automobiles to Hertz. At driving vehicles one time, Ford owned Hertz and Volvo invested in it. 6
Multifaceted Relationships Among Digital Natives Uber, Lyft, and Hertz compete to sell rides or rent vehicles Uber, Ford, Volvo, and GM are building their own driverless systems 7
Multifaceted Relationships Among Digital Natives 8
Related Work - Conceptual Modeling of Organizational Strategy • Enterprise and business modeling employ concepts such as goal, actor, value, process, etc.). Johannesson, P. (2007). • Modeling and evaluating organizational strategy. Giannoulis et al. (2011); Weigand et al. (2007); Gordijn et al. (2006); and Osterwalder et al. (2005). • Goal- and Actor-Oriented Requirements Engineering (RE) approaches to model and analyze business strategy. López & Franch (2014); Paja et al. (2016); and Carvallo & Franch (2012). • None of these approaches have focused directly on the phenomenon of coopetition • Coopetition impacts strategy (goals, tasks, resources, boundaries, etc.). 9
Coopetition in the age of Digital Transformation - impacting Information Systems Design • Digital transformation refers to nexus of forces and confluence of phenomena that are disrupting industries and reshaping markets. • Organizations are having to simultaneously cooperate with their rivals while competing with their partners. • IS researchers have emphasized the need for aligning information system (IS) design with organizational strategy so that information systems help to satisfy business requirements. • A systematic and structured approach is needed for representing and reasoning about strategic coopetition among organizations. • This approach will impact design of IS for knowledge management, organizational learning, service orientation and encapsulation, as well as compliance and governance. 10
Why use Requirements Engineering techniques to model and analyze Organizational Relationships • Coopetition refers to simultaneous cooperation and competition. • “increasingly popular in recent years” - Gnyawali & Park (2009). • “an integral part of many companies’ daily agenda” - Bengtsson & Kock (2014). • Some research papers in the RE literature have discussed competition and cooperation between enterprises. Giannoulis et al. (2011); and Liu et al. (2009 ). • Many characteristics of these strategic behaviors are unexplored in the enterprise modeling literature. • These gaps “make it difficult for requirements engineers to validate low- level requirements against the more abstract high-level requirements representing the business strategy”. Bleistein et al. (2004). 11
2. Ente Enterpr prise Coope ooperation on, C Com ompe petition, A And nd Coopeti titi tion on - backg kgro round 12
Competitive View in Organization Theory • Organizational Theory (OT) is an academic discipline that is concerned with the structure, behavior, and performance of organizations. Baysinger (1991); and Pugh (1966). • OT emerged in the 1950s as an explanation of the strategic dynamics between firms in competitive industries. Linstead, et al. (2008). • It was closely related to Bain’s SCP (structure, conduct, performance) paradigm • The performance of a firm was determined by its conduct • The conduct of a firm was impacted by various industry factors. Bain (1956). • Starting in the late 1970s, Porter popularized this view through his advancement of economic theories of “competitive advantage”. Porter (1979); Porter (1981); and Porter (1991). • As such, for the first thirty years, this competitive view of organizational strategy became the dominant paradigm in OT research. 13
Cooperative and Collaborative View in Organization Theory • The “militaristic” competitive view in OT was challenged throughout the 1980s and 1990s by management researchers. • These management researchers argued in favor of “cooperative advantage” and “collaborative advantage”. Ketelhöhn (1993); and Lado et al. (1997). • This stream of research posited that firms could improve their performance and increase their profits by partnering with other firms. • Dyer and Singh promoted the notion of “relational rents” as profits that were generated through relationship-specific idiosyncratic assets and resources. Dyer & Singh (1998). 14
Why cooperate / collaborate? • Many rationales and justifications were offered for inter-firm relationships such as strategic alliances. • These included the ability for partner firms to • Acquire knowledge. - Jiang & Li (2009). • Share risks. - Das & Teng (1996). • Access markets. - Gebrekidan & Awuah (2002). • Spread costs. - Todeva & Knoke (2005). • Pool resources. - Koza & Lewin (2000). • Achieve strategic objectives. - Inkpen & Ross (2001). 15
Disagreements Between Prominent Views • By the mid-1990s, the field of OT was divided into two camps that offered incompatible and divergent explanations of inter-firm behaviors. • The competitive camp argued that cooperation among rivals led to • Collusion or cartelization. • Market failure through the creation of deadweight loss. • Reduction of consumer surplus. • Obviation of incentives for innovation. • The cooperative or collaborative camp argued that competition among partners led to • Mutually destructive outcomes. • Promotion of distrust/mistrust. • Reduction of goodwill. • Persistence of disequilibrium in the market. • It seemed that only an esemplastic theory could resolve the creative tension between these camps. 16
Coopetition Theory • Proposed as a syncretistic means for reconciling the competitive and cooperative perspectives. Padula & Dagnino (2007). • Introduced in 1995 by two economists - a game-theoretic lens for interpreting inter-firm behaviors. Brandenburger & Nalebuff (1995; 1996;1997). • a prominent field of scholarly inquiry in the two decades since its introduction • literature reviews Walley (2007); Dorn et al. (2016); Bengtsson & Raza-Ullah (2016); Bouncken et al. (2015); Gast et al. (2015); and Czakon et al. (2014);. • special issues Roy & Czakon (Eds.). (2016); Dagnino (Ed.). (2007); and Baglieri et al. (Eds.) (2008). • Empirical fieldwork – explore “the antecedents-process-outcomes trail”. Lado et al. (1997); and Czakon et al. (2014) • Influence beyond economics on other disciplines including • political science, diplomacy, and civics. Fleisher, C. S. (2001); Alber et al. (2006); and Racine, D. (2003). 17
Coopetition In Practice • Competition and cooperation are diametric social behaviors that are undergirded by opposite logics and assumptions. Bengtsson & Kock (2000). • Their co-occurrence in any relationship represents a paradox that creates tensions between the coopeting actors. Raza-Ullah et al. (2014). • Different degrees of cooperation and competition can co-exist within vertical (i.e., buyer-supplier) as well as horizontal (i.e., firm-to-firm) relationships. Bengtsson et al. (2010; 2000); and Dowling et al. (1996). • Moreover, coopetition can occur within a dyad (i.e., between two actors) or in a network. Czakon et al. (2014). 18
Forms of Coopetition • Dyadic coopetition necessitates direct coopetition between two actors. • can be regarded as procedural coopetition where activity is an appropriate unit of analysis. Rusko (2012). • Network coopetition enables direct as well as indirect coopetition (i.e., via an intermediary). • can be regarded as contextual coopetition where actor is a suitable unit of analysis. Rusko (2014). • Coopetition is also a multi-level phenomenon • An actor may exhibit different behaviors at different levels (i.e., within a dyad or network). Chiambaretto & Dumez (2016). 19
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