RT2C

Discussion: Dynamics of Cooperation and Competition

Being successful in today’s business environment requires more nuanced thinking than just stressing competition. Consider General Electric, which found that a highly effective way to improve its KPIs in the aircraft engine market was to actually partner with a competitor. It seems counter-intuitive, but it worked. When General Electric and Snecma created an alliance to build aircraft engines, General Electric shielded certain sections of the production process to protect against the excess transfer of technology (“Snecma, GE Renew CFM Agreement,” 2008).

Consider the dynamics of cooperation and competition in the future business environment. For organizations that are in an environment of increasing cooperation/competition, consider the proactive role the HR department can serve in helping the C-suite think about balancing competition and cooperation. As part of the Discussion, give specific examples.

To prepare for this Discussion ,

Review this week’s Learning Resources, especially:

· Resource fit in inter‐firm– See pdf

· Interpretive schemes – See pdf

· Knowledge transfer to partners – See pdf

· Two Favors of Open Innovation - See pdf

Assignment:

Respond to two of your colleagues’ postings in one or more of the following ways:

· Ask a probing question.

· Share an insight from having read your colleagues’ postings.

· Offer and support an opinion.

· Validate an idea with your own experience.

· Make a suggestion.

· Expand on your colleagues’ postings.

· No plagiarism

· APA citing

1st Colleague - Natasha Mills 

Dynamics of Cooperation and Competition

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Partnerships have not only become commonplace but have also become the critical determinant of the future of businesses. Globalization is the mediating factor in this case as it enables firms to expand and explore new markets for competitiveness. As Fung (n.d) posits, globalization has allowed companies to venture into new markets, making it necessary for them to work with other players in the market due to the unfamiliarity of their respective cultures. HR professionals need to be proactive in heading their organizations into this collaboration with other players. Their proactivity help organizations balance cooperation with competition, leading to successful alliances that create more value for them. This paper will analyze the key role of HR in balancing the dynamics of cooperation and competition in partnerships.

Analysis of the Dynamics of Cooperation and Competition

Cooperation and competition form the basis of partnerships. Simply put, in order to increase their competitiveness, firms have to cooperate with other organizations. Wilhelm & Kohlbacher (2011) advocate for an effective balance of the two concepts for successful alliances, through what they refer to as co-petition. Co-petition comprises of both competition and cooperation that foster knowledge sharing and knowledge creation. Other alternative terms the authors use are knowledge exploitation and knowledge exploration. These are the major dynamics of cooperation and competition because the goal to increase competition forces a company to create new knowledge. To create new knowledge, companies have to collaborate with other firms and exploit existing knowledge (Wilhelm & Kohlbacher, 2011).

Proactive Role HR Department can Serve in the Balancing of Competition and Cooperation

The HR department is part of the strategic management of the organization. In addition, HR professionals are central to the success of alliances through the roles they play. One of the proactive roles the HR department can serve in the balancing of competition and cooperation is to learn about inter-firm relationship management and thereafter help the C-suit with the same. Effective relationship management skills are critical to balancing competition and cooperation because it arms the organization with the necessary courses of action that increase the chances of a successful alliance. As Smith (n.d) puts it, businesses are more about relationships than partnerships. Therefore, the HR department can help the C-suit think about how to balance cooperation and competition by helping them with effective relationship management strategies even before they get into partnership agreements.

Cooperation/Competition Resources and How the Decisions about Resources are Made

Peng (2011) identifies a strong correlation between resources and inter-firm cooperation. This means that the level of resources each partner commits during an alliance is instrumental in determining its success. However, it is unrealistic to expect all partners to commit equal resources for cooperation or competition. This is because the formation of partnerships mainly involves companies of different sizes and levels. As a result, the decisions about the resources each partner commits are anchored on other variables, such as control systems, absorptive capacity, and firm intent (Peng, 2011). These are the elements that firms use to assess whether or not their partners are a strategic resource fit, which, in turn, leads to desirable performance implications. From this perspective, it is also logical to argue that firms with a wide disparity in market share or net worth should not be expected to commit the same percentage of resources. What matters is the value that each partner creates for the other using the resources they have.

How Conflicts of Cooperation and Competition are Anticipated, Planned for, and Resolved by the HR Department

According to Hutzschenreuter & Horstkotte (2010), the roles, motivations, and overall characteristics of partners usually differ. Thus, it is recommended that the HR department anticipates, plans for, and resolves conflicts that may emerge concerning competition and cooperation. For instance, the HR department can anticipate cooperation and competition conflict by examining the interpretive schemes of the prospective partners, especially if the alliance is multinational. Das & Kumar (2009) argue that interpretive schemes lead to differences in how partners from different cultures make sense of conflict. When this is anticipated, the HR department can draft mechanisms for responding to any differences that may emerge as a result of variations in interpretive schemes. The conflict resolution plan will increase the HR department’s effectiveness in resolving competition and cooperation conflicts during the partnership.

In conclusion, the HR department plays a crucial role in every step of the partnership, including renegotiating the partnership contract when the alliance has achieved its goals. Therefore, HR professionals must have an in-depth understanding of their role in partnerships for organizations to engage in successful alliances through healthy cooperation and competition.

Das, T. K., & Kumar, R. (2010). Interpretive schemes in cross‐national alliances: Managing conflicts and discrepancies. Cross Cultural Management: An International Journal.

Fung, K. W., (n.d). Globalization leads to collaboration.

Hutzschenreuter, T., & Horstkotte, J. (2010). Knowledge transfer to partners: a firm level perspective. Journal of Knowledge Management.

Peng, T. J. A. (2011). Resource fit in inter‐firm partnership: intellectual capital perspective. Journal of Intellectual Capital.

Smith, P., (n.d). Relationships, not partnerships.

Wilhelm, M. M., & Kohlbacher, F. (2011). Co-opetition and knowledge co-creation in Japanese supplier-networks: The case of Toyota. Asian Business & Management, 10(1), 66-86.

2nd Colleague - Anthony Blount 

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Anthony Blount 

RE: Discussion - Week 8

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Hi Ty

Thanks for sharing.  You said that considering cooperation and competition is vital if a company stays ahead.  Is that enough?  There are various models for implementing coopetition.  I think HR should explore these models, identify those most relevant to the organization, and present them to the C-suite along with an assessment of the skills and abilities of their workforce.  Knowing these are fundamental to developing a partnership where the cultural and strategic conflicts have been addressed and agreed upon, plans of action have been developed to deal with potential barriers and included in the partnership agreement.   An organization with an idea of what to do but never implements these ideas can’t be a competitive or innovative partner.  This behavior opposes a culture that is eager to grow.  The ideas implemented in partnerships made Toyota innovative, which were tested and refined again and again after data analysis to maximize the coopetition of all parties (Wilhelm and Kohlbacher, 2010).

 

The customer is vital to the partnership’s success, but does the customer alone inform the partnership on how and where to innovate?  Apple uses coopetition similar to Toyota.  Customers do not play a significant role in driving innovation.  The teams develop ideas and applications that the customer has not yet thought of or experienced.  Accordingly, a partnership-driven exclusively by the customer may get you satisfaction, but it would grow your market share and the brand.  HR must understand the talent pool and what is necessary to foster their ingenuity in the workforce.  This allows the C-suite to make an informed decision on whether the partnership candidate is a good fit culturally.  Ideally, the cultures should align or complement each other (Gupta & Wang, 2011).  Taken collectively, the C-suite can determine what they can offer (Dyer and Nobeoka, 2000; Fujimoto, 2007).   Further, it guides what governance is best for the partnership.  Once HR understands the partner’s talent, creating a strategic partnership plan that includes a charter, activities, resources, and a synchronous culture can maximize the partnership’s success (Gupta & Wang, 2011).   

 

Do you think in most partnerships that fail in 2-3 years, HR failed to understand both talent pools, the needs of the organizations, and identify the cultural and strategic conflicts between both organizations (Gupta & Wang, 2011)?  Is a partnership only as good as an organization’s HR department?

 

Anthony

 

 

References:

Dyer, J.H. and Nobeoka, K. (2000) Creating and managing a high-performance knowledge-sharing network.  Strategic Management Journal 21 (3): 345-367

 

Fujimoto, T. (2007) Competing to be Really, Really Good: The Behind-the-scenes Drama of Capability-building Competition in the Automobile Industry.  Tokyo: International House of Japan.

Gupta, A., & Wang, H. (2011).  Partnering up the smart way.  South China Morning Post Ltd., Business, B6.

 

Wilhelm, M., & Kohlbacher, F. (2011). Coopetition and knowledge co-creation in Japanese supplier networks: The case of Toyota.  Asian Business and Management, 10(1), 66–86.

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