Ray Noorda, the former CEO of Novell Inc., first coined the term “coopetition” in 1992 to describe a common phenomenon in the computer industry: cooperation between competitors. This phenomenon is inconsistent with classical economic and business theory going as far back as Adam Smith, who viewed the production system as based on a separation between suppliers and buyers. Micro-economists have traditionally viewed the firm as buying raw materials and components from suppliers, producing finished goods, and selling those goods in competition with other firms to a different set of firms or consumers. However, starting in the 1990s, research on forms of cooperative relationships between competitors became very common. The most common types are (a) competing firms engaging in horizontal alliances along the same level of the value chain and (b) vertical cooperation along different levels of the value chain between suppliers and firms in the focal industry or between customers and firms. In the last 25 years, there has been a great increase in research on coopetition. In a systematic literature review conducted in 2014, one researcher found over 130 academic articles in more than 80 academic publications published since 1996. The majority of the research to date has been qualitative, with many cases studied conducted. A number of special issues in academic journals have been devoted to the topic in general or to special topics concerning coopetition. The Strategic Management Journal organized a special issue in 2018 on the interplay of competition and cooperation, and a number of workshops have been held on coopetition strategy and innovation.
Andy El-Zayaty and Russell Coff
Many discussions of the creation and appropriation of value stop at the firm level. Imperfections in the market allow for a firm to gain competitive advantage, thereby appropriating rents from the market. What has often been overlooked is the continued process of appropriation within firms by parties ranging from shareholders to managers to employees. Porter’s “five forces” model and the resource-based view of the firm laid out the determinants of value creation at the firm level, but it was left to others to explore the onward distribution of that value. Many strategic management and strategic human capital scholars have explored the manner in which employees and managers use their bargaining power vis-à-vis the firm to appropriate value—sometimes in a manner that may not align with the interests of shareholders. In addition, cooperative game theorists provided unique insights into the way in which parties divide firm surplus among each other. Ultimately, the creation of value is merely the beginning of a complex, multiparty process of bargaining and competition for the rights to claim rents.