Co-Opetition

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ARTICLE CRITIQUE:
Zineldin, Mosad(2004)”Co-opetition: the organisation of the future”

INTRODUCTION

In most business theories, competition is seen as one of the key force that keeps organisations innovative and lean. To be able to survive in a market, organisations have had to engage in competitive strategies. On the other hand, theorists have begun to realize that to also survive, organisation may be inclined to cooperate with their competitors. Thus, new theories of collaboration, networking, cooperating and sharing are beginning to be forecast and written on. One of the theories is of co-opetition. This article critiques, Zineldin's article on "Co-opetition: the organisation of the future" .

SHORT ACCOUNT OF THE ARTICLE

In his article, Zineldin claims that the organisation of the future will have to collaborate and cooperate with its competitors. Zineldin states that companies need to consider the potential benefits of collaborating, cooperating and coordinating with their competitors. He terms this strategy as co-opetition. Thus, business strategies and activities should aim for the establishment of mutually beneficial partnership relationship with other actors in the organisation’s network, including their competitors.

The fundamental role for the organisation of the future will be to create and develop processes of strategic co-opetition that will enhance long-term relationships, retention and loyalty. Five main advantages for co-opetiton outlined are, sharing of knowledge, pooling of competencies, increased incentives to take risks and proactively in product development. For this co-opetition strategy to work there should be trust and commitment among players. Creating co-opetition has both a cost and value. For a company, it takes time to develop such a relationship and the time factor may after the parties’ profitability. Hence, those involved must have a common philosophy, clear goal of what they want to achieve. Zineldin identifies that individual willingness motivation, interdependence, culture fit, integration and integrity, organisational arrangement and institutinalisation criteria should be met before forming a co-opetition strategy.

Zineldin furthermore identifies short benefits of these strategies. These are reduction of transaction costs, cost of joint ventures and access to vast amount of knowledge of a company’s particular market

He states that many organisations today are competing through cooperation rather than just competition by establishing formal or informal strategic alliances and networks that range from exchange of technology and markets to industrial mega deals. Some examples given are Mitsubishi &Volvo, IBM & Volvo and Apple, IBM & Motorola. Furthermore, co-opetition will lead to economies of scale, lower prices, a skilled labour force, high level of R&D and so on, so forth.

On the other side, this strategy can be of disadvantage to companies. For example, other costs can be created, such as time and resources used to build the relationships and return on investment can take a long time to calculate. Companies may take advantage of the more vulnerable company.

ANALYSES

It could be said that Zineldin wrote on a valid point. Although it is not a new concept, (first coined by Ray Noorda, the founder of Novell) he has somehow managed to summaries the concept in a simplified way. The article lacks evidences; he has not done any empirical study thus a lacking of critical evidence makes the article more of hearsay than of a positive study. It is of a normative study nature.

Most research on competition has been on vertical relationship between organisation such as value added supply chain or distribution rather than horizontal relationships. Zineldin does not say which competitor to cooperate with in the organisations network. Furthermore there is not clear example and measurement of the success and this strategy

Although there is insufficient amount of...
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