How Does Centrality in Coopetition Networks Matter? An Empirical Investigation in the Mobile Telephone Industry
| Author | Frédéric Le Roy,Famara Hyacinthe Sanou,Devi R. Gnyawali |
| Published date | 01 January 2016 |
| Date | 01 January 2016 |
| DOI | http://doi.org/10.1111/1467-8551.12132 |
British Journal of Management, Vol. 27, 143–160 (2016)
DOI: 10.1111/1467-8551.12132
How Does Centrality in Coopetition
Networks Matter? An Empirical
Investigation in the Mobile Telephone
Industry
Famara Hyacinthe Sanou, Fr´
ed´
eric Le Roy1and Devi R. Gnyawali2
University of Montpellier 1 – ISEM, Espace Richter –Bat. B, RueVend´
emiaire, 34960 Montpellier Cedex,
France, 1University of Montpellier 1 and Groupe Sup de Co Montpellier, University of Montpellier 1 – ISEM,
Espace Richter – Bat. B, Rue Vend´
emiaire, 34960 Montpellier Cedex, France, and 2Department of
Management, 2011 Pamplin Hall, Virginia Polytechnic Institute and State University (Virginia Tech),
Blacksburg, VA 24061, USA
Corresponding author email: s.famarahyacinthe@yahoo.fr
This research examines how a firm’s position in a coopetitive network (formed through
cooperation among firms within an industry) influences the extentof the fir m’scompetitive
aggressiveness and market performance. The authors collected data on the competitive
and cooperative actions of firms in the mobile telephone industry from 2000 to 2006,
using structured content analysis of news reports.The results show that the centrality of a
firm in a coopetitive network contributes to the firm’s competitiveaggressiveness through
increased volume and varietyof competitive actions. Further, the more central a firm is in
the network, the greateris its market performance. Firms that undertake more volume and
variety of competitive actions improve their market performance. Overall, these results
show that being in a central position in a coopetition network is quite advantageous for
the firm.
Introduction
Coopetition involves the simultaneous pursuit
of competition and cooperation (Bengtsson and
Kock, 1999; Dagnino, 2009; Gnyawali and Park,
2011; Peng et al., 2012; Ritala, 2012; Yami et al.,
2010). The pursuit of coopetition is increasing ow-
ing to pressures arising from the changing nature
of products and technologies and the potential to
access and use partners’ resources (Gnyawali, He
and Madhavan,2008; Padula and Dagnino, 2007).
Much current research has examined coopetition
This research was supported financially by the LabEx
Entrepreneurship, Montpellier, France. This ‘Laboratory
of Excellence’ is part of a French governmentfund recog-
nizing and promoting research initiatives in human and
natural sciences.
between a pair of firms (e.g. Gnyawali and Park,
2011) or an inter-firm dyad. Scholars haverecently
noted the need to examine coopetition using a
network perspective (Bengtsson, Eriksson and
Wincent, 2010; Park, Srivastava and Gnyawali,
2014). Firms in technology-intensive industries
are increasingly forming cooperative relation-
ships with competitors (Fjeldstad, Becerra
and Narayanan, 2004; Oshri and Weber, 2006;
Pellegrin-Boucher, Le Roy and Gurau, 2013;
Teece, 1992), leading to the formation of ‘coopet-
itive networks’ (Gnyawali, He and Madhavan,
2006).
Firms in coopetitive networks face a unique sit-
uation: the cooperative ties provide firms with op-
portunities to learn about their partners and aord
them access to resources residing within the net-
work, but they are simultaneously constrained by
© 2015 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
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144 F. H. Sanou, F. Le Roy and D. R. Gnyawali
the cooperative relationships because cooperation
with competing firms involves risks. Although
coopetitive networks are unique and arebecoming
increasingly popular, we know little about the na-
ture of such coopetitive networks and whether a
firm’s structural position in such networks shapes
its competitive actions. Moreover, the literature
has not examined the performance consequences
of firms’ positions in such networks.This paper ad-
dresses these critical research gaps by examining
the following research question: how does a firm’s
position in a cooperative networkamong competi-
tors (a coopetitive network) aect its competitive
aggressiveness and performance?
Weaddress this research question by building on
the literature on inter-firm networks (e.g. Nohria,
1992; Wasserman and Faust, 1994), competi-
tive dynamics (Ferrier, Smith and Grimm, 1999;
Gnyawali and Madhavan,2001; Young, Smith and
Grimm, 1996), and coopetition (Bengtsson and
Kock, 1999; Dagnino, 2009, Gnyawali, He and
Madhavan, 2006) to provide theoretical insights
into the nature and implications of coopetitivenet-
works forfirms. By blending insights from compet-
itive dynamics, e.g. that resources are one of the
most important determinants of competitive ag-
gressiveness (Chen, 1996; Chen and MacMillan,
1992; Gnyawali and Madhavan, 2001), and from
network literature, e.g. thata central firm enjoys re-
source advantages (Nohria, 1992; Wasserman and
Faust, 1994), we suggest that the more central a
firm’s position in a coopetitive network, the bet-
ter access it will have to the resources contained
in the network, and such access enables the firm
to be more aggressive in its competitive actions
and, in turn, to achieve superior performance. We
build on the coopetition literature and develop in-
sights about a coopetition network’s unique fea-
tures. Although it is quite challenging to acquire
a competitor-partner’s resources (Gnyawali, He
and Madhavan, 2006), firms that are more central
in the coopetition network have the prestige and
power, which enable them to acquire and use such
resources.
We develop several hypotheses by building on
these literatures, and test them using longitudinal
data from the mobile phone operator industry. We
study the cooperative and competitive actions of
firms over the period 2000–2006 and use the struc-
tured content analysis (Ferrier and Lyon, 2004;
Jauch, Osborn and Martin, 1980) method to iden-
tify competitive and cooperative actions. The re-
sults show that being central in the coopetitivenet-
work increases the firm’s competitive aggressive-
ness through the increased volume of competitive
actions (labelled ‘competitive activity’) and the di-
versity of competitive actions (labelled ‘competi-
tive variety’) undertaken by the firm. The results
also show that central firms in the networkachieve
superior market performances. Moreover, both
competitive activity and competitive variety posi-
tively impact the firm’smarket performance. Thus,
the results show thatcentrality in a coopetitive net-
work helps to improve firm performance directly
and through increased competitive aggressiveness.
We make several noteworthy contributions.
First, this paper develops a networkview of coope-
tition and oers insights into how firms’ compet-
itive behaviours are shaped by their positions in
coopetitive networks. Second, we show that occu-
pying a central position in the coopetitive network
enables firms to be competitively more aggressive
and, in turn, to achieve superior performances.
This paper thus provides a concrete basis for un-
derstanding coopetitive networks and their impli-
cations. Finally and more broadly, our research
shows how valuable insights can be gained by inte-
grating competitive dynamics research and coope-
tition research. We oer fertile ground for coopeti-
tion researchers to develop a theory of coopetitive
dynamics in the future by incorporating insights
from the competitive dynamics literature.
Theoretical background
Coopetitive networks
Network theory suggests that firms are embed-
ded in their socio-economic environment (Gra-
novetter, 1985) and are part of a network of re-
lationships that shape the firms’ behaviours and
performances (Baum and Dutton, 1996; Burt,
1992; Gulati, Nohria and Zaheer, 2000; Nohria,
1992). An inter-firm network is conceived as a
collection of formalized cooperation relationships
(strategic alliances) between firms and provides a
firm with access to the resources of the network
partners and constrains its behaviour (Gnyawali
and Madhavan, 2001).
A coopetitive network is a particular type of
network that emerges within an industry. Firms
within an industry often formally cooperate with
each other through mechanisms such as strate-
gic alliances, joint ventures and technological or
© 2015 British Academy of Management.
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