Co-Opetition: The Organisation Of The Future.

Mosad Zineldin.

A)This article refers to a strategic tool being increasingly employed by management executives Co-opetition: The organisation of the future.

known as co-opetition in which Zineldin considers that in a global market, organisations that are self governing may be able to combine resources and work as a team. This involves pooling resources for a certain objective whilst remaining independent of each other yet still challenging each other and other rivals for the same business.

Zineldin refers to his earlier work suggesting that co-opetition is a kind of business philosophy in which the strategic management of companies should involve steering the business into positive long term relationships with other established players in the field.

This should also include competitors, with the overall intention of improving best practice and moving the industry forward.

These amalgamations may be useful in one particular area of business, for example research and development without affecting the drive for sales at the marketing stage.

(It is imperative for a successful alliance and relationship between the collaborators to communicate and cooperate in an atmosphere of frank debate, trust, interdependence, and mutual positive expectation so that the mutual benefits and interests may be achieved.) Zineldin, M. (1998)

Zineldin acknowledges that whilst the organisations may correlate business activities to achieve mutually beneficial exchanges and add value to each others organisations, they will challenge each other in order to maximise their own share holder’s wealth.

He also suggests that promotion of a culture of best practice and striving for excellence is not the same goal as merely doing better than one’s competitors. He justifies this using evidence gained from articles by (Bengtsson and Kock, 2000),(Hensler (2000)and (Kohn (1992)

He draws comparisons from evolutionary theories suggesting that The Darwinian survival of the fittest theory has an antethisis, serial endosimbiosis theory (SET) quoting Margulis(1998) and (Hensler 2000)

He theorises that in evolutionary processes cells of different histories and abilities merge to evolve into more complex organisms.

Zineldin refers to his earlier work where he likens strategic planning to Business ecology in which competitors in the market form pragmatic coalitions to fit in with the economic climate. Zineldin, M. (1998)

Zineldin suggests that by adhering to this paradigm, forward thinking organisations will embrace a culture of co-operation and that competitors will aim to compliment each other’s businesses,

respectively adding value to each organisation.

The organisations are much more likely to take risks if they feel that they have mutual goals and objectives.

Zineldin evidences this theory giving examples referred to by Bengtsson and Kock (2000) (see appendix 1.)

Zineldin claims that to successfully implement a co-opetition strategy

• the organisations must be willing to be involved in an interactive exchange relationship

• The relationship must be mutually rewarding.

• Each party must have assets to bring to the relationship.

• Terms must be agreed to enable each party to benefit from the relationship.

• The parties must be able to communicate and interact with each other.

• The parties must be able to agree on ethics, level of commitment and interdependence.

• They maintain confidentiality and do not abuse the information they are in receipt of.

• They have a relationship built on flexibility, trust and respect.

Zineldin suggests that if these conditions are implemented the result will generally be a mutually beneficial experience with a healthy culture of competition, interdependence and collaboration. This appears to mirror (Foti and Ross. Jun2004,)

Before seeking partners Executives should ask:

• On what terms do we compete and on what specific activities are to be included in the cooperation?

• What is expected of each company?

• How will the revenue be divided?

• What if a conflict arises?

• What if somebody breaks the rules?

• Can we wholeheartedly trust the company/companies that will be our partners?

• Do we have enough Knowledge about their strategies, goals, intentions and visions?

• How are we going to relate the cooperation to our stake holders?

James Champy,Chairman of consulting,Perot Systems,Plano, Texas, U.S.A.

(Foti and Ross. Jun2004,)

A co-opetive relationship can incur fewer costs than an independent venture, and the ethos appears to be that it is fine to be successful providing that this does not depend on the failure of others.

This synergetic approach leads to the products or services provided being of a better standard and therefore all parties should be able to take a larger slice of the market.

Relationships characterized by various degrees of initial asymmetry evolve in dramatically different ways over time. Findings suggest that weaker firms can structure and thrive in long-term relationships with powerful partners because initial asymmetries are subsequently redressed through the development of high levels of interpersonal trust across the dyad, which in turn leads to increased levels of interorganizational commitment. (Narayandas, Das and Rangan, V. Kasturi, 2004).

Zineldin expresses that where there is an imbalance of power in business to businesses relationships and that a zero sum game should be the preferred outcome, he warns that this is not guaranteed.

Zineldin uses evidence based on the work of HÐ"Ґkansson who suggests that to develop a successful co-opetition, a new “interaction approach” to industrial markets is necessary.