Introduction
The management of coopetitive tensions has become a critical issue in coopetitive success (Le Roy & Czakon, 2016; Le Roy et al., 2017). Previous studies have highlighted two contradictory principles for managing coopetition: the separation principle and the integration principle (Bengtsson & Kock, 2000; Fernandez et al., 2014; Fernandez & Chiambaretto, 2016; Le Roy & Fernandez, 2015; Pellegrin-Boucher et al., 2018). Whereas the separation principle relates to the organizational level, the integration principle relates to the individual level. However, the adoption of a coopetition strategy forces employees from both parent firms to work together (Fernandez et al., 2014; Gnyawali & Park, 2011). Although previous studies on coopetition management have paid less attention to the working-group level, it is critical to understanding how coopetitors work together, how they organize their daily work to achieve a common goal, how they select worker locations, how they are structured and coordinated, etc. (Fernandez et al., 2018).
Thus, the aim of this chapter is to understand how coopetition is managed at the working-group level. We highlight an original mode of organization: the coopetitive project team. We define the coopetitive project team as the pooling of human, financial, and technological resources from two coopetitors in a common and unique project team separated from both parent firms and fully dedicated to a common goal. The design and primary features of the coopetitive project team are analyzed. The coopetitive project team is governed by a mixed structure that is equally shared by both partners to preserve the partnership equity. Key managerial functions are duplicated (two individuals from both companies) without any hierarchical relationship. Project managers act as masters of coopetition by integrating the coopetition paradox and managing related tensions at the working-group level.
Both separation and integration principles are used to build the coopetitive project team. The separation principle is used to separate the coopetitive project team from both parent firms. The coopetitive project team is dedicated to collaboration, whereas the parent firms remain in competition. However, within the coopetitive project team, the competitive dimension is not excluded. According to the integration principle, project managers must internalize the duality of competition and collaboration and must behave accordingly in their daily work.
The implementation of both principles of separation and integration is not sufficient to manage coopetition at the working-group level. We show that firms must establish a bi-cephalous governance structure and a dual management committee. This organizational structure corresponds to a new principle known as the co-management principle (Le Roy & Fernandez, 2015), which is essential for the success of coopetition. Without this co-management, workers from both competitive firms will be unable to complete their common project.
Coopetition management
Coopetition is by definition a paradoxical relationship (Raza-Ullah et al., 2014; Tidström, 2014). The management of paradoxical tensions is a pervasive research question in organizational theories (Lewis, 2000; Smith & Lewis, 2011). Two contradictory approaches to managing paradoxical tensions are frequently debated. The first approach recommends paradox resolution by splitting opposite forces (Poole & Van de Ven, 1989). The second approach suggests that splitting creates vicious cycles. Therefore, scholars who support the second approach recommend accepting the paradox at both the individual and organizational levels. Once the paradox is accepted, a resolution strategy should be implemented (Tse, 2013).
Smith and Lewis (2011) do not oppose splitting and integration strategies but suggest combining them in a strategy of resolution. Combined with acceptance at both the organizational and the individual levels, the resolution strategy enables companies to benefit from the management of paradoxical tensions and to improve their sustainability (Smith & Lewis, 2011) and innovation (Tse, 2013) capabilities.
The pioneers of coopetition management literature, consistent with the paradox-solving approach through splitting, explain that “individuals cannot cooperate and compete with each other simultaneous(ly), and therefore the two logics of interactions need to be separated” (Bengtsson & Kock, 2000: 423). Thus, the management of collaboration and the management of competition should be split to manage coopetitive tensions (Bengtsson & Kock, 2000; Dowling et al., 1996; Herzog, 2010). The separation can be functional, temporal, or spatial. Partners can cooperate on one dimension of the value chain (i.e., R&D) while competing on another dimension (i.e., marketing activities).
However, other scholars note that the separation principle appears to be inefficient because it creates new internal tensions within the organization and integration issues for individuals (Chen, 2008; Oshri & Weeber, 2006). In the example cited above, a conflict can arise between the departments. Thus, it becomes very important to seek other solutions to manage coopetition. As noted by Wong and Tjosvold (2010), inter-individual relationships and personal interactions strongly contribute to coopetition management in a win-win way. To encourage these inter-individual relationships and personal interactions, an integration principle is highly recommended (Chen, 2008; Oshri & Weeber, 2006).
The integration principle is consistent with the acceptance of paradoxes (Lewis, 2000; Luscher & Lewis, 2008; Smith & Lewis, 2011), which allows individuals to understand their roles in a paradoxical context and to behave accordingly, following both logics simultaneously. Thus, the challenge for managers is to simultaneously manage collaboration and competition to optimize the benefits of coopetition (Luo, 2007). Instead of reducing competition or collaboration, firms would rather maintain them in a balance (Clarke-Hill et al., 2003).
The literature review highlights two primary but opposing principles for managing coopetitive tensions. In the separation approach, individuals are unable to integrate the coopetition duality. Consequently, to address coopetitive tensions, an appropriate organization design separates collaboration from competition. Conversely, in the integration approach, individuals can integrate coopetition duality into their daily activities. Thus, managing coopetition relies on the development of individuals’ capacity for paradox integration (Bengtsson et al., 2016; Gnyawali et al., 2016).
Recent studies highlight the possible combination of both principles to efficiently manage coopetitive tensions (Fernandez et al., 2014; Fernandez & Chiambaretto, 2016; Le Roy &Fernandez, 2015; Pellegrin et al., 2018; Séran et al., 2016). Because the separation principle creates internal tensions within firms, a principle of integration at the individual level is recommended to manage them. This principle relies on individuals’ capabilities to understand other roles.
However, assuming that the integration principle requires the development of cognitive capabilities to understand the dual logic of coopetition, we wonder whether this principle is realistic for all individuals. This question is even more appropriate at the working-group level. Indeed, the implementation of a coopetition strategy requires employees from both parent firms to work together (Fernandez et al., 2014; Gnyawali & Park, 2011). Unfortunately, we have little evidence about how coopetitors organize, structure, and coordinate their daily work to achieve their common goal.
To address this question, we conducted an in-depth case study within the most important and the most competitive sector of the space industry: the manufacturing of telecommunications satellites. We focus on an innovation programme called Yahsat that is jointly developed by the two European competitors, Thales and Airbus, who follow a coopetition strategy. The case uniquely represents a situation in which two firms engage in coopetition, examining the organizations and their relationships to provide deep insights regarding the management of coopetition. The common project team established by Thales and Airbus to conduct the program represents a unique case for investigating in-depth coopetitive tensions at the working-group level.
The formation of the coopetitive project team
Airbus and Thales are organized by projects. The organizational design for their common projects depends on the innovativeness of the project. When the project is an incremental innovation, Airbus and Thales use a simple organizational design. When the project is a radical innovation, they use a more complex organizational design that we named the coopetitive project team.
For low-innovation, low-risk, and low-cost projects, firms do not design a complex organization. In such projects, there is no need to combine similar and complementary knowledge to create new capabilities. Knowledge sharing remains limited to interfaces (project coordination), thus reducing the risk of plunder and unintended spillover. A simple organizational design allows the achievement of low-innovation projects while protecting the core knowledge of the firm against the opportunism of its coopetitors.
For highly innovative, risky, and costly projects, it makes sense to adopt a more complex organizational design. A specific team is fully dedicated to the project. The project team has its own technological, human, and financial resources dedicated to achieving a clear objective. The project is governed by a “project management office” (PMO) composed of a project manager and several deputies.
The project manager plays a critical role. He manages the time schedules and the technical performance as per the client’s requirements. He is also responsible for team composition. Relationships between the project manager and the team members are functional rather than hierarchical. Team members depend on the technical departments allocated to the program. At the end of the program, they are transferred to another project.
When working together on very innovative projects, Airbus and Thales establish this organization to achieve their goal. They pool human resources into a mixed project team to create and exploit positive synergies from both the exploration and exploitation processes. Because the resources come from competing firms, tensions can arise within the team. The existence of coopetitive tensions allows us to name this specific organization a coopetitive project team. We define the coopetitive project team as an organizational mode that results from the pooling of technological, financial, and human resources between two competing firms that is fully dedicated to achieving a common goal within a specific time limit.
The coopetitive project team differs from traditional collaborative project teams because of the simultaneous expression of collaboration and competition within the team. Although they must collaborate, team members remain members of their parent firms. They defend their firm’s interests while collaborating. They also know that collaboration is temporary and that they will have to compete for the next program. For these reasons, collaboration and competition occur simultaneously at the project team level. Thales and Airbus deliberately internalize the coopetitive tensions and their management within the coopetitive project team and, more precisely, within the PMO. To efficiently manage coopetition, the coopetitive project team is independent and allows the establishment of appropriate managerial tools.
The coopetitive project team: A dual design
The duality of the coopetitive project team governance structure
In the early stage of the program, tensions arise regarding leadership and the need to define the prime contractor. To manage these leadership tensions, the governance structure should reflect the power equity between Airbus and Thales. Several scenarios are possible. In the first scenario, a project manager from one parent firm could be appointed to coordinate and manage the entire program. He alone would independently make all the decisions for the program. The relationships between the project manager and deputies would be hierarchical. Tensions within the team would be expected to increase. To avoid leadership tensions, Airbus and Thales adopted an Integrated Overall Control (IOC) approach based on a mixed PMO composed of individuals from both companies (Figure 17.1).
In the PMO, key managerial functions are duplicated and equally shared by Thales and Airbus: two project managers, two management controllers, two satellite managers, etc. A manager from Airbus or Thales and a deputy from the other company head each industrial segment. The duplication process reflects the equity between Airbus and Thales at the segment level. Without a hierarchical relationship, both managers have the same power in the decision-making process. Even if Airbus has been appointed as the agent, Airbus is not allowed to negotiate alone with the client. The negotiation process between the partners is permanent to ensure consensus between Airbus and Thales. This process suffers from a lack of flexibility and is slower and more difficult to implement than a regular program is. High levels of tension appear, especially during technically difficult phases, when each manager recommends a solution that is advantageous for its parent firm. However, the double loop in the decision-making process increases the legitimacy of the decision for all team members. Engineers accept a decision from their own project manager more easily than they accept one from the competing project manager.
The duplication in the governance structure of the coopetitive project team could be considered a waste of resources, but it is a requirement for financial reporting. The results from Yahsat should be established for each partner and presented to top management.
The duality of the coopetitive project team management committee
Autonomous from their parent firms, project managers and segment heads are in charge of managing tensions at the program level. When tensions are efficiently managed at the segment level, project managers are not involved. When conflict persists, project managers must intervene. When project managers do not agree on how to manage the tension, they refer to the formal procedure as defined in the partnership agreement, which involves a mixed steering committee (two Thales PMO members, two Airbus PMO members, heads of the business unit, and top managers from Airbus and Thales). When the mixed steering committee does not succeed, the procedure requires the involvement of executives from Thales and Airbus. This situation has never occurred in Yahsat.
In spite of the absence of hierarchy, project managers must control their respective work. The double control is essential to ensure each firm of the quality of work performed by the partner. Project managers also manage information within the team to manage tensions between sharing and protecting information. When Yahsat requires information, it is shared without any transfer of property right. In spite of its complexity, the dual governance structure allows the tandem project managers to integrate the ambiguity of coopetition and thus to manage tensions and potential conflicts.
Coopetitive project team operations
The coopetitive project team co-location
The geographical proximity of the subsidiaries of Thales and Airbus in the Toulouse area (South of France) facilitates the collaboration between firms and individuals. The coopetitive project team is co-located in Toulouse to facilitate the access of individuals to their parent firms.
To facilitate team members’ interactions, Airbus and Thales decided to co-locate the coopetitive project team within the Airbus plant in a building that is exclusively dedicated to coopetitive programs, separated from the rest of the company by wire netting. The building is not freely accessible and, reciprocally, coopetitive project team members do not have access to Airbus. Within the team, a real melting pot occurs among individuals. For example, office doors do not mention the name of a team member’s parent firm, to avoid distinctions between Thales and Airbus members.
The coopetitive project team co-location illustrates the principle of spatial integration in coopetition. Tensions between competition and collaboration are simultaneously managed at the same location. However, co-location could have an unintended effect. Over the years, team members may develop their own identity and feel disconnected from their parent firm. Their colleagues could perceive them as traitors because they work with a competitor.
The coopetitive project team composition
Yahsat is technically and relationally challenging because of the coopetition context. Thus, the team-building process is very important. Project managers require individuals with both technical and relational skills, but such resources are scarce. In the Telecom Business Unit, each project manager writes a checklist of the technical competencies that are required for Yahsat. He then looks for these competencies among individuals who hold specific relational skills that were developed through previous collaborative experiences. This assumption explains why the majority of Airbus Yahsat team members were members of a previous military telecommunications program, “Skynet.” Junior managers are highly qualified but lack the experience to manage the coopetition context. The paradoxical situation is difficult to handle for individuals, primarily because of the tensions related to information management.
Whereas in traditional projects technical skills are the most important, in coopetition, relational skills are as important as technical in guaranteeing the success of the project team. To succeed, an individual should be able to integrate the paradoxical context, i.e., to cooperate with their competitors while defending the interests of the parent firm.
The project manager
In Yahsat, both project managers are among the best engineers but also hold specific managerial capacities that allow them to defend their project under all circumstances. These capacities allow the project managers to develop a coopetitive mind-set and to integrate the coopetition paradox. They understand the benefits of collaborating with a competitor as well as the risks of this collaboration. Because they are convinced of the strategic choice of coopetition, they are able to base their internal communication on the benefits of Yahsat for companies and individuals.
Considering the project manager’s strategic role, choosing the appropriate person is highly critical for the companies. The assignment process is informal. The companies’ career management policies do not account for the involvement of individuals in coopetitive programs. Some individuals find the coopetition context crippling and pressuring, whereas others find it creative, challenging, and inspiring. The project managers’ motivation, commitment, and devotion represent key factors in the success of Yahsat.
Project managers manage tensions at the project team level, avoiding the propagation of conflict to the rest of the organization. They ensure the progress of Yahsat, regardless of the tensions and potential conflicts. For instance, during interfaces, project managers must manage the risks of transfers and imitation. They have the power to prohibit information transfers that are required by their top management and to allow information transfers prohibited by their top management. Project managers appear as the keystone of coopetition, balancing collaborative and competitive tensions to avoid conflicts and contribute to the program’s success.
Conclusion
The question of organizational design is a key issue for the success of coopetition. For low-innovation, low-risk, and low-cost projects, firms use a simple organizational design. Conversely, for highly innovative, costly, and risky projects, firms design a coopetitive project team. This team is (1) spatially separated—co-located in a dedicated space and separated from both parent firms; (2) functionally separated—autonomous and resource-independent; and (3) temporally separated—respecting its own planning. According to the separation principle (Bengtsson & Kock, 2000; Dowling et al., 1996; Herzog, 2010), this organizational separation between competition and cooperation is necessary to manage coopetition.
However, the coopetitive project team design is insufficient for the daily management of all coopetitive tensions. In line with integration scholars (Chen, 2008; Das & Teng, 2000; Oshri & Weeber, 2006), our research highlights the necessity of individual integration for coopetition management. The project’s progress relies primarily on the project managers. They must contain coopetitive tensions at the team level, avoiding the spread of tensions within the parent firms. Project managers are innovative people with the specific abilities (i.e., a combination of expertise and relational competencies) to create tools to manage daily tensions. They can be considered masters of coopetition. Their cognitive capabilities allow them to integrate the paradox, and this paradox integration allows them to manage coopetitive tensions. Project managers are decision-makers—they make all the decisions for the project—but they are also risk-takers—they can make decisions in contradiction with their internal policies.
Nevertheless, integration cannot be fully achieved by all members of the coopetitive project team. The integration of the paradox requires high cognitive capabilities that are difficult to acquire and develop for employees. Thus, employees involved in coopetition can behave either too competitively or too cooperatively. Consequently, a co-management principle is required at the working-group level to encourage balanced behaviors between collaboration and competition.
In dyadic coopetition, the co-management principle relies on both the bicephalous governance structure and the dual management committee. The managerial duplication in the governance structure reflects the equity of the partnership and is a key factor in the program’s success. The co-management committee is entrusted with managing coopetitive tensions. Because individuals involved in a coopetitive project team refuse directives from a project manager from a competing firm, the co-management approach legitimizes the leadership of each firm and enhances collaboration among team members. Moreover, this duplication increases the control of each partner in the sharing process. Thus, co-management increases the confidence of team members and the probability of the program’s success.
Finally, our research illustrates a combination of the separation principle (Bengtsson & Kock, 2000; Herzog, 2010) and the integration principle (Chen, 2008; Oshri & Weeber, 2006) with the co-management principle. Coopetitors have deliberately created a coopetitive project team that is (1) separated from the rest of the organization, (2) governed by a dual-governance structure and a co-management committee, and (3) managed on a daily basis by a project manager who has previously integrated the duality of coopetition. The coopetitive project team can be considered to be a managerial innovation to manage tensions and conflicts in a paradoxical context such as coopetition. To sum up, the efficient management of coopetitive tensions relies on the implementation of a separation principle at the organizational level, a co-management principle at the working-group level, and an integration principle at the individual level (Figure 17.2).
A research agenda on the coopetitive project team
The coopetitive project team is a fascinating research topic. Future research could explore several directions. The first direction consists of delving deeper into the coopetitive project team structure, as highlighted in this research. For instance, specific research could aim to better understand the role of the project manager or to further investigate the daily interactions between team members and their implications on knowledge sharing/protection. Who decides to share critical information, and how is the decision made? Do coopetitive project teams have specific information systems? We have noted the essential role of project managers in running coopetitive project teams. Senior managers appear to be more qualified than young ones. Further research could examine the manager profiles required to govern coopetitive project teams. Could companies train their managers to govern coopetitive project teams? How could they learn to govern coopetitive project teams? Further attention is also required to understand how information is managed within the coopetitive project team. A second research direction concerns the emergence of the coopetitive project team; how has this organizational structure emerged? Does the coopetitive project team result from learning processes or from previous collaborative experiences? Does the learning come from individuals or from firms? Do the coopetitive capabilities necessary to implement coopetition strategies belong to individuals or to companies? Another perspective could determine how the coopetitive project team structure could be used when coopetition involves more than two firms. Would firms use the same structure and the same mechanisms? As underscored by these questions, we believe that the coopetitive project team represents a strong opportunity for future research.
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