The Paradox of Cooperation and Competition in Strategic Alliances - Towards a Multi-paradigm Approach

Essay by badfans December 2004

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Cooperation and competition characterise the interfirm relationships in strategic alliances. This paper proposes a paradox approach to studying cooperation and competition. It explains the paradox perspective and provides an analytic framework for the paradox of cooperation and competition. In the light of the paradoxical nature, it advocates a multi-paradigm approach to cooperative and competitive strategies, which combines strategic positioning, the resource-based view and game theory. The paper suggests that the multi-paradigms can not only encompass the contradictions of the paradox from the different perspectives, but also emulate the individual ones and provide a holistic picture The multi-paradigm approach therefore establishes a better methodology basis than fragmented orthodox theories in exploring the contradictory, interactive and dynamic nature.

Keywords: paradox, cooperation, competition, strategic alliances, multi-paradigm


In the 1970s and early 1980s, the strategic challenge for business was viewed primarily as protecting its potential profits from erosion through either competition or bargaining.

This view of strategy underwent a change in the late 1980s. The need to pursue multiple sources of competitive advantage led to the need for building collaborative relationships with suppliers, customers, competitors, and variety of other institutions (Bartlett & Ghoshal, 2000). Many companies shifted strategic focus and began to embrace both competitive and cooperative strategies. The growing role of cooperative strategy is manifest particularly in the phenomenon of strategic alliances (Bartlett & Ghoshal, 2000), which are interfirm cooperation agreements to share or transfer skills and resources to meet mutually agreed goals.

Cooperation or collaboration can be considered as a counterpart to the pursuit of competitive advantage. It can offer significant advantages for companies, which are lacking in particular competencies or resources to secure these through links with others possessing complementary skills and assets (Child & Faulkner, 1998; Dyer & Singh, 1998). Some authors describe this kind of advantage as...