Abstract
This article builds on existing analyses of coopetition strategy as practice by exploring coopetition as a social-structural and relational phenomenon. We draw on social practice theory to present an analysis of coopetition in a cluster of small informal businesses in Accra, Ghana. In so doing, we adopt a comprehensive socio-cultural perspective enabling us to account for a wider range of antecedents, drivers and both intended and unintended outcomes for individuals, firms, clusters and wider institutions. We show how immersive cooperation among competing firms became a naturalised practice in the cluster, embedded as a cultural assumption. Following this, we develop a conceptual framework that shows how the actions of individuals (agency) and strength of institutional and societal (structure) influences may lead to different forms of small business coopetition strategy.
Introduction
Coopetition, the phenomenon of simultaneous competition and cooperation with competitors (Brandenburger and Nalebuff, 1996), has been analysed at length since its origins in the business and management literature in the mid-1990s (Peng et al., 2012). Despite this, scholarship on coopetition strategy in small businesses is relatively sparse (Bouncken et al., 2015; Granata et al., 2018). This is surprising, given that small firms may be more suited to using coopetition strategy due to their flexibility, limited contractual commitments and informal structures, policies and controls (Gnyawali and Park, 2009; Morris et al., 2007). Coopetition research is dominated by studies that focus on the likelihood and ability of firms to adopt coopetition strategy in order to achieve predefined performance outcomes (Estrada and Dong, 2020; Klimas et al., 2021; Raza-Ullah, 2020). These studies typically ascribe deliberate strategic intents such as learning, stretching or complementing strategic capabilities (Bouncken, et al., 2020; Czakon et al., 2020). A strand of coopetition research has encompassed the social embeddedness of coopetition strategy, acknowledging that coopetition can be both deliberate and emergent. This research has viewed coopetition strategy as a social and relational practice, with drivers and outcomes traceable to influences at multiple levels (Dahl et al., 2016; Garri, 2021; Tidström and Rajala, 2016). However, it has largely focussed on more immediate actors and contextual influences, drivers and outcomes. Despite calls for such work, there is scant empirical research either on the role of macro-structures and social practices in coopetition strategy or on the plurality possible outcomes (Bouncken et al., 2015; Gast et al., 2015).
We situate the current study amongst those that incorporate unplanned, emergent and other unintended conceptions of coopetition (Kylänen and Rusko, 2011; Mariani, 2018). Specifically, we draw on coopetition studies rooted in the strategy-as-practice (SAP) research approach (Dahl et al., 2016; Tidström and Rajala, 2016). The SAP approach gives analytical primacy to how strategy work is undertaken in practice rather than the prevailing strategy within an organisation (Vaara and Whittington, 2012). It conceives of strategy as a social practice and constitutes strategy work within three interrelated elements: strategy praxis (actual activities in the doing of strategy), strategy practices (shared norms of behaviour and acting in the doing of strategy) and strategy practitioners (actors/strategists engaged in the doing of these activities). The SAP approach informs research that examines how individual (micro) level practices influence, and are influenced by, organisational (meso) level strategy practices, as well as the sector, industry, institutional or societal level practices (Seidl and Whittington, 2014; Vaara and Whittington, 2012). The SAP approach is appropriate as it offers analytical tools geared to deeper understanding of the ‘doing’ of coopetition as social practice and especially to the appreciation of the social, structural and relational linkages between the practice, influences, drivers and outcomes of coopetition strategy at multiple levels. Nascent research on entrepreneurship as practice (EAP) follows a broadly similar approach (Champenois et al., 2020).
Strategy-as-practice studies to date have not fully explicated the social and relational dimensions of coopetition strategy as practice so offering a limited view only of the range of outcomes of coopetition strategy (Jarzabkowski and Spee, 2009), despite the fact that a number of previous studies have examined coopetition outcomes (Crick and Crick, 2021a; Granata et al., 2018; Kraus et al., 2019). The aim of this study therefore, is to build on our understanding of coopetition strategy as practice by examining coopetition as a socio-structural and relational phenomenon embedded in its social context. An important objective is to account for a wider range of antecedents as well as unintended individual, organisational, institutional and societal level outcomes than extant coopetition studies. We study coopetition strategy in a cluster of small informal businesses, as a polar case of coopetition by small businesses in general. Such atypical cases auger well for theoretical advancement in respect of coopetition because they highlight broader manifestations and thus, a deeper appreciation of the concept (Jugdev and LaFramboise, 2012). Informal businesses are not officially registered so are unlikely to be partially or wholly complaint with tax, labour and employment laws (Gërxhani, 2004). Our goal is to highlight coopetition as a social practice in situ by incorporating intra and extra-organisational levels of analysis (Seidl and Whittington, 2014; Vaara and Whittington, 2012).
The contribution of our article is twofold. First, we extend existing work (Dahl et al., 2016; Garri, 2021; Tidström and Rajala, 2016) by developing a more comprehensive socio-cultural perspective on the antecedents, drivers, execution and outcomes of small business coopetition. In particular, we draw upon social practice theory to build on the understanding of how social context creates and renders coopetition as a naturalised practice. We make a theoretical contribution by highlighting how coopetition can become embedded as a cultural assumption where the actors involved in its co-construction accept coopetition as an ingrained and unquestioned method of conducting business. Second, building on this and situating our findings in the contemporary literature, we offer a conceptual framework that shows how the actions and inactions of individual agents and the strength of institutional, societal and cultural influences may lead to different forms of small business coopetition strategy.
Our article is structured as follows: First, we outline our theoretical starting point based on social practice theory. We then review the deliberate strategy and situated practice streams of the small business coopetition literature before expanding on the coopetition strategy as practice perspective. We then outline our research, based on a strategy-as-practice inspired analysis of a cluster of small informal businesses. Finally, we report findings related to the antecedents, drivers, execution and multi-level outcomes of coopetition in this setting and present the implications for small business coopetition theory.
Literature review and theory
Theoretical framework
Commensurate with our adoption of the SAP research approach, we draw on Bourdieu’s (1990) practice theory advocated by SAP scholar, Gomez (2010). This theory has been adopted previously (Pret et al., 2016; Shaw et al., 2017; Vincent and Pagan, 2019), and highlights the socialness of coopetition and its manifestations across individual, organisational and network levels. It emphasises the influence of a multiplicity of actors and social structures across multiple levels (Gomez and Bouty, 2011). Hence, it provides a framework within which we could account for the actions and motivations of individuals and informal firms, as well as the wider institutional context, that intertwine in ways not adequately captured by narrower analytical approaches. Bourdieu’s practice theory encompasses the concept of the field (Bourdieu, 2000). This is used to acknowledge the role and influence of key industry players such as competitors, buyers and suppliers, as well as regulatory agencies, local and central governments, the state and society (Drakopoulou Dodd et al., 2018; Emirbayer and Johnson, 2008). These actors and institutions may directly or indirectly influence, or be influenced by, coopetition practices in diverse ways including regulatory requirements and enforcement, support and advocacy (Dahl et al. 2016).
Small business coopetition research
Small business coopetition research.
Coopetition as deliberate strategy
A strand of small business coopetition research is situated within the traditional school of strategy development as deliberate and planned (Bouncken et al., 2018; Czakon et al., 2016; Kraus et al. 2019). Largely, these studies investigate coopetition between a small firm and a large competitor, particularly within the high-tech, pharmaceutical and biotechnology industries (Chiambaretto et al., 2020; McCutchen and Swamidass, 2004). These studies mostly assume that organisations have a high degree of control over their coopetition strategies and practices and hence, make calculated choices about how they formulate and execute these strategies (Dahl et al., 2016; Peng and Bourne, 2009). Although antecedents, relationships and outcomes feature prominently as broad research themes, this research tends to focus on rational economic drivers and economic outcomes—collaborating with competitors gives small businesses access to resources and capabilities that they cannot develop on their own (Kraus et al., 2019; Morris et al., 2007). The studies give only limited consideration to contextual influences such as individual managerial mental models and the coopetitive mind-set (Klimas et al., 2021). Evidence suggests that these drivers are critical to a healthy balance between retaining independence and exploiting opportunities that flow from coopetitive relationships and so, to the success of coopetition strategy (Bengtsson and Johansson, 2014; Crick, 2020; Dahl et al., 2016).
Consistent with the planned strategy logic, some small business coopetition research addresses the balance between the levels, extent and locus of cooperation and competition amongst firms. In this perspective, top managers have high autonomy in making decisions that balance their contribution to the relationship with how much their firm can potentially gain (Bouncken et al., 2020; Lechner et al., 2016). For instance, Crick and Crick (2021b) found a non-linear coopetition-performance relationship and thus, recommended adopting a judicious level of coopetition. Although a valuable contribution to the coopetition literature, this strand of research only partially explains the execution of small business coopetition strategy since it does not offer insights into how social context may constrain or enable strategic actor behaviour and choice (Dahl et al., 2016; Vaara and Durand, 2012). The roles of a multiplicity of actors, some of whom may be physically distanced across multiple institutions and organisational levels, are also often lost, due to this diminished focus on strategic actors and outcomes (Dahl et al., 2016; Whittington, 2007).
Coopetition in a socio-cultural context
Another strand of small business coopetition literature explores the influence of socio-cultural setting and relationships. Though these studies do not employ the SAP perspective, they identify drivers and outcomes of small business coopetition strategy at the individual, organisational or sector, industry and wider institutional levels. At the institutional level, studies of coopetition between small businesses in agglomerations such as industrial districts, hubs and industry clusters (Kylänen and Rusko, 2011; Lechner and Dowling, 2003) have found that their coopetition strategy may be tacit, intuitive and unintentional. For instance, Kylänen and Rusko (2011) showed how competitors at a tourist attraction began to cooperate for influential events, largely as a result of context-specific factors, including individual actors operating in close proximity, a sense-of-place and destination promotion (Webb et al., 2021). Coopetition may also be in effect imposed by factors such as the cluster, the nature of the product and social ties in the immediate geographic spaces that embed the coopetition practices (Damayanti et al., 2017; Wang and Krakover, 2008). In the tourism study, the location is a close-knit community in which cooperating with competitors is relatively commonplace with business partners and/or competitors most likely to be known to each other. Coopetition is instinctive as there exists little, or no separation, between the small businesses, their owners, their personal and commercial relations (Wang and Krakover, 2008).
Furthermore, the institutional environment and individual actors within formal institutions influence cooperation between small firms through policy and regulatory initiatives (Garri, 2021; Kylänen and Rusko, 2011; Mariani, 2007). Studies depict patterns of interaction between cooperative and competitive situations as individual actors draw on norms, trust and situated practices. Attuned to survival and resilience, coopetition actors quickly switch from competition to cooperation and vice versa, according to evolving capability, availability and constraints. This is consequential strategically, in that the actors avoid losing business opportunities as a collective (Damayanti et al., 2017). Actors may be socialised into coopetitive behaviours through incremental sequencing of competition and cooperation. Put another way, coopetition may be learned such that it becomes institutionalised over time. For instance, Mariani (2007) found that following an initial stipulation to coproduce, a group of competing theatres later deepened their cooperative relationship to include sharing actors thus, imposed cooperation thrived alongside competition. Subsequently, cooperation became normative, inducing tacit coopetitive knowledge that shaped the attitudes and behaviours of partner theatres.
Despite these portrayals of small business coopetition as situated practice in the individual, firm and industry context several aspects remain only partially explored. In this article, we explicate more fully the unconscious/unplanned feature of coopetition, articulate the socio-structural and relational linkages between social practices and coopetition practice more profoundly and uncover a multiplicity of outcomes that are germane to understanding coopetition as social practice.
Coopetition strategy-as-practice
These studies are guided by the SAP perspective which conceptualises strategy as a social practice with wide ranging influences, drivers and outcomes at differing levels. From this perspective, Dahl et al. (2016) provide a framework analysing coopetition strategy as both deliberate and emergent, formulated and executed by individuals at both the intra- and inter-organisational levels. Tidström and Rajala (2016) studied coopetition between a large multinational and its supplier, showing how praxis at the individual level influences, and is influenced by, practices at the organisational level, and to some extent the network level, and how these shape coopetition strategy over time.
These contributions notwithstanding, contemporary SAP coopetition research offers a limited analysis of the more distant extra-organisational macro (sector, institutional and societal) level influences on coopetition praxis and practices that SAP (Seidl and Whittington, 2014; Vaara and Durand, 2012). Deeper levels of structural influence derive from sectors, institutions, society and at a national level. As such, although they begin to address limitations in other strands of small business coopetition literature, the extant literature adopting the SAP approach gives analytical primacy to coopetition that is largely planned and deliberate (Dahl et al., 2016; Vaara and Whittington, 2012). Thus far, studies have not fully explored small business coopetition as situated practice entangled in a ‘web of social practices’ (Vaara and Whittington 2012: 288). Though previous research has examined how coopetition strategy may become an unplanned yet, inevitable choice we argue for the need to adopt a more holistic view of the socio-structural influences and outcomes that render coopetition a naturalised practice.
Methods and design
Research setting
Evidence was gathered from small informal printing businesses in Accra New Town, Ghana. As a well-known printing cluster in Ghana, this setting represented a polar case of a small business cluster that would challenge conventional characterisations and findings. Its businesses, although registered and certified to operate as such, do not fully comply with legal requirements such as business operating license renewal, tax obligations or employment laws. Their physical and internal organisation and operations also lack bureaucracy compared to formal businesses with well-defined reporting, accountability, control and command structures and systems in place. For example, they keep only rudimentary financial accounts, with no dedicated or compliant systems. However, they produce and offer legal goods and services (Bruton et al., 2012; Holt and Littlewood, 2014). The printing industry is very competitive and characterised by a wide range of inter-related specialised activities associated with design and printing, which engenders the need to adopt strategies for success and survival (Graham and Owusu, 2015). Almost every structure in the location houses a printing business, with total numbers in the hundreds. Related and supporting businesses such as training schools, input material suppliers and equipment maintenance services are also located in the cluster. The informal businesses are small, with three to five permanent employees and typically housed in a space about the size of a standard shipping container. Most owners are also the managers and work in the business full-time, making it their main source of income. The businesses are typically not family firms.
Despite the distinctive nature of informal businesses, it is instructive to note some similarities with small formal businesses, for example, in terms of the liabilities of smallness, foregrounding of behavioural advantages and the strong influence of owner-managers. Although informality may account for significant aspects of coopetition practices in the study, by selecting a setting that is representative of small businesses in some regard, yet dissimilar in others, we set the stage for deeper engagement with contextual influences on small business coopetition practice. For example, informality underpins extreme forms of flexibility and so, is a form of behavioural advantage whilst informal arrangements may also permeate small formal business settings to some extent (Darbi et al., 2018).
Data collection
Selected cases of small informal printing businesses.
Note: All business names are pseudonyms
Summary of data set.
Data analysis
The audio-recorded interviews lasted 20–85 min and were transcribed and imported into Nvivo 10 for further analysis, along with hand-written field notes (observations, informal chats, shadowing), news items, webpages and literature (Granata et al., 2018). The overarching unit of analysis, which guided initial coding, was cooperation behaviours and practices, related activities, influences and consequences involving participating informal businesses and their competitors. A first-order thematic analysis (Braun and Clarke, 2006) revealed the dominant categories around which coopetition practices form. Initial codes therefore, targeted related instances of praxis (activities in the doing of coopetition), practices (norms of behaviour and acting in the doing of coopetition) and practitioners (actors who engage in the coopetition practices) (Dahl et al., 2016; Whittington et al., 2006). These were wrapped in relationships, actions, actor identities, resources, perceptions, dispositions, artefacts, assumptions, heuristics, interpretations and consequences that represent the enactment of cooperation between the informal businesses and their competitors in the focal field (Gomez and Bouty, 2011). A second order theoretical analysis probed for deeper patterns and explanatory dimensions (Gioia et al., 2013; Gioia and Chittipeddi, 1991). This analysis drew on a Bourdieusian logic of practice, as noted above, applying Bourdieu’s concepts to interpret the material under each theme (Vaughan, 2008). The analysis was organised into the three broad themes, in keeping with our analytical questions (Braun and Clarke, 2006). This inductive, qualitative approach is established in the study of business practices in the informal sector as it reveals elements beyond rational and economic conventions (Afreh et al., 2019).
Findings
We report on our findings related to coopetition drivers, practices and outcomes. For each of these we found individual, organisational and wider institutional influences, consistent with our adopted Bourdieusian theoretical framework. We describe these below and in Figure 1, illustrating how the different elements interconnect and interact. Interconnections between coopetition drivers, practices and outcomes.
Institutional and social drivers
Actor embeddedness
We found that individuals tended to have had prior engagement with informal printing businesses and the cluster prior to founding their current firm. Consequently, nascent cluster participants were already imbued with a mutual cultural frame that included a disposition towards close cooperation with competitors in the cluster. As one participant put it: I know him [owner-manager of a dominant informal business]. When I was in school, I used to print at his’ so I’ve known him for a long time before I set up my own business. It’s been like eight years now, for four years I was a customer to him, for four years I was just giving him jobs. I get the jobs but I didn’t have my own place so I did it at his end and after I opened my own place, I still send him jobs I cannot do at my place.
Another owner-manager similarly described ongoing close interaction with an informal printing business owner that originated from his school years: He became like a master to me and I always call him when I have problems and even give him jobs that are beyond me.
Social structures
The social context in which the cluster was embedded was a key antecedent to the coopetition practices observed. Participants were collectively aware of their deficiencies in capital resourcing and formal organisation since they employed only rudimentary written documentation, reporting, verification procedures and rational-legal decision-making. Seeking partnerships allowed businesses to deploy and exchange capabilities where each had expertise. Coopetition practices could be seen to arise from the characteristically small operating size and space, along with the small market size relative to equipment capacity for these firms. Indeed, the ownership of expensive printing equipment was the preserve of a dominant few. Businesses dealt with this through close associations with competing firms and by working together in a socially conditioned manner that was as much cultural as economic. Investment in cooperation was institutionalised as being more valuable than investment in equipment. According to an owner-manager: Yes, it’s [a dominant informal business laser engraver] one of the most expensive and most advanced machines we have in Accra. People have the Chinese version, Korean and all but his is from America… I have the … table-top version of the engraver (this is Roller and his is Epilog). So since I cannot afford, I have smaller versions of the machines to do my indoor ones and when it’s beyond me, I send it to him.
Similarly, when asked about the main benefits that arise from cooperative relationships with partners, one employee recounted: It is difficult to pencil down because it’s a broad relationship. … as at now we have to send somebody [client] to a different company to work because we can’t do it. We are tied up with something we are doing now, so that company [partner] invariably will do a good job for the client as we’re doing here.
The informal printing businesses relied on other similar firms for inputs, services and products that they were unable to produce in-house due to limited space. As such, they did not perceive their small operating spaces and scale as a competitive disadvantage or constraint particularly, as they were not seeking growth as a strategic imperative.
Industry and regulatory context
Coopetition practices were intrinsically linked to the regulatory environment, market and industry structures. These included the small local market relative to the output capacity of the available equipment, cumbersome business registration requirements and unreliability of essential services such as electricity. This was illustrated by a business owner-manager: Unfortunately the people who are producing plant and equipment for the printing industry are not looking at markets like ours …. . They produce equipment which in a day should be able to produce (if it’s a 50 page book) about 20,000 copies in one shift of 8 hours, so one, the cost of the equipment is high and two, our market scope is so small that you will have a lot of unutilised capacity if you think you want to do most things by yourself.
Use of bespoke smaller-scale equipment was precluded by reliance on more affordable imported second-hand machines. The resulting over-capacity triggered cooperation between competitors that promoted subcontracting, inclusiveness and resource sharing practices. So, competing firms tended to specialise rather than replicate similar sets of equipment and in turn, this added to their already socially-conditioned disposition to cooperate. Moving to the regulatory level, the registrar of companies responsible for business registration and certification implicitly admitted regulator complicity in the tendency of the informal firms to circumvent requirements: There is ignorance, some people do not know about these procedures, others know but feel lazy to come to this place [RGD headquarters in Accra]. You see formerly we had only one office (just here) in Accra, so whichever region you were in Ghana you had to come down here. … Others just do not want to honour these obligations; in fact most of them are right here in Accra.
The informal businesses usually resorted to cooperation with third parties, canvassers and competitors, both inside and outside the cluster, in order to avoid or ignore regulatory requirements.
Coopetition practices
Competition and cooperation situations, practices and behaviours.
Relationships with canvassers
The informal businesses in the cluster had notable limitations in their administrative expertise; this affected their status with formal commercial and government buyers. Cooperation with canvassers (middlemen) enabled them to execute contracts for which they would otherwise be ineligible to bid for due to an inability to satisfy tendering requirements. An employee of an informal printing business illustrates how their association with canvassers enabled them to access market opportunities and successfully compete with larger, formal businesses: … you wouldn’t believe a small company like us go about branding a whole lot of banks… I don’t know if you’ve been to the banking hall of Stanchart or Ecobank – you see the branding of the wall, hall and whole place? We did it, you will think a big formal company sitting somewhere did it, but it’s a third-party arrangement.
The canvassers solicited contracts as if they were in the printing business themselves and therefore, acted more like horizontal competitors, despite serving as important conduits to market opportunities. The informal printing businesses cooperated and worked closely with these canvassers, despite the apparent inequity in the relationship and the potential for canvassers to become competitors. The following quote is a response by an owner-manager of an informal printing business to a question about competition: In this sector, there are two sets of players. There are those of us who have machines to operate, but there are others we refer to as canvassers who do not own machines but by virtue of their networks with people are able to win contracts – so they sort of go and bargain, get the contract and then come run it on our machines and pay us a small chunk of the profits they make. … we no more see them as competitors, we cooperate with them.
The operations of these canvassers, and the way they solicited contracts as if they were themselves printers, was confirmed in the following comment by a formal business client of an informal printing business: There are also some kind of middlemen along the way, they do not come in portraying that they do not have the print houses, but come to you for the business and tell you we can do this for you as if they are going to execute the project, but then sublet to these informal businesses. Sometimes if you ask them for formal third-party requirements, they give you all and tell you quietly we do this with this guy …
Mutual support
We noted several forms of mutual support between businesses in the cluster, which our data conveyed as a pervasive form of coopetition logic, co-constructed as a shared perspective. Established businesses sometimes turned to canvassing when adverse conditions temporarily prevented them from operating physically at their own premises. Under these circumstances, the businesses depended on others still operating to either let them run jobs at the cooperating firm’s premises, or outsource entire contracts. This coopetition practice was critical for business continuity and hence reputation and relationships with valued clients. The price for this was a degree of short-term financial sacrifice by securing contracts only to have to outsource them: I don’t think he [business partner] is my competitor because he has opened up to me to the extent that, if he gets any equipment and he thinks it will be of benefit he doesn’t hide it from me. He tells me go in for this and not that, or I went in for this and it did not help me …. When I get new equipment, he does the installation for me and when he also has difficulties in installation I help out. When he cannot meet a deadline because of workload, I can even go and take control of his machine as well.
Similar coopetition logic found expression in the sharing of inputs such as printing supplies when one business ran short but needed to deliver to clients on schedule. This even extended to electricity as many firms were unable to purchase generators to mitigate the unreliable power supply in Ghana. Coopetition gave them the ability to literally ‘move house’ to partner firms. As one employee put it: We are cool, because for instance if there is power cut now, I have a gen [generator] ok, so if you have to deliver a contract and the lights are out or your machine breaks down, you need to contact someone who has similar equipment or me with a generator to help you out. So to succeed, it pays to be good and nice to everybody in the industry.
Open communication
The businesses shared a disposition towards highly open communication. Contemporary communication technologies had largely replaced formal business agreements. This open communication logic was associated with acceptance of significant levels of flexibility in using each other’s facilities: It’s also difficult to have all equipment installed in your own place, so at a certain point, somebody [partner] will have to do something for you. Similarly some others also contract to us, so on the basis of doing open business, we do have good relationships with organisations we consider in very positive light, in terms of output and so on.
Participants acknowledged the inherent risks in these arrangements and communicated socially-constructed notions of risk, trust and mistrust. Possibilities included non-payment or under-payment for work done, appropriation of partner samples, undermining partners with clients in an attempt to take over their contracts and poor performance by network partners. A typical account by an owner-manager is: At the end of the two years the client was so happy that we signed a contract for five years, but … a certain aspect of the work we contracted out. The person we contracted picked one of the works, went to the client and said ‘I do this job for this [subcontractor] …. so you are better off dealing directly with me’.
Rather than employ formal governance mechanisms to mitigate these risks, firms employed context-specific social controls and sanctions. They drew on the open communication, whistleblowing and reference practices in the cluster to identify suitable and trustworthy partners (Gulati and Gargiulo, 1999). Social controls included implicit non-negotiated, non-documented sanctions such as alienation, leading to loss of future opportunities: Yes, everybody must exude a certain amount of power to be able to convince the target [client] that they are in a better position to satisfy them than the other person [partner], this is rife so we all do it. But, you must do it within acceptable parameters because if you don’t and you are found out you lose out eventually.
Coopetition outcomes
Consistent with our literature review, and as shown in Figure 1, we considered outcomes of coopetition at multiple levels and sought to account for non-economic as well as economic outcomes.
Socialisation of individuals
For individuals, the dominant mode of coopetition in the cluster became the means for them to establish their own businesses. It permitted different forms of prior participation resulting in a shorter learning curve when creating their own firms; acceptance and legitimisation as insiders allowed them to be accepted and enact local norms and practices (De Clercq and Honig, 2011; De Clercq and Voronov, 2009). These individuals then became complicit in maintaining the ingrained cultural assumptions of the cluster that encouraged specialisation, outsourcing and sharing: ...I used to do my jobs at his’, so we had a relationship going before I established my own business. I did not have machines in my early years of establishment, so most of the jobs that came my way went to him and most of the equipment I thought I will need were introduced to me by him.
Business continuity and resilience
Coopetition created resilience amongst the businesses as it fostered continuity in circumstances that would otherwise prevent business operations. In situations of temporary physical absence from the field, businesses instead took on different roles (Vaara and Whittington, 2012), effortlessly switching from having a physical location with dedicated equipment to operating as a canvasser, as noted above. The canvasser role enabled continuity in business name, trademark and contract delivery: …. even when my business is closed down and I’m not in the country, I am able to execute and deliver jobs to clients because all we [business partners] need to do is emails.
The mutual support for supply and inputs described above was another source of organisational resilience arising from an immersion in coopetition. A business owner in a news story (Yeboah, 2013) re-affirmed this point: In order to avoid such embarrassing situations, some of the printers have come up with an arrangement that enables those who do not have electricity to go to their colleagues who do have it, to continue their printing jobs, after which the two parties share the income according to the volume of work done by each of them.
Through these mechanisms, firms in the cluster were able to compensate for their otherwise disadvantaged societal and economic position to deliver flexibility, prompt service and lower prices relative to larger and better resourced competitors. Coopetition practices that involved firms making individual concessions had the ultimate effect of maximising collective opportunities.
Naturalised coopetition practice
An overarching system-level outcome of coopetition in the cluster was that this form of interaction had become naturalised to the extent that from the participant’s viewpoint, it was the only plausible strategic choice. Businesses in the cluster in effect operated not as individual players, but in cooperative networks based on localised logics and practices. We observed that the coopetition practices were not driven by necessity aimed at survival per se, but instead by socialisation and embeddedness in the cluster. Actors had come to accept and project coopetition as obvious and natural with alternative courses of action being practically and culturally less attractive to both existing and new informal businesses entering the cluster. The following comment from an employee of an informal business illustrates this: Sometimes because you are down with a supply [input] that a partner in the same line of business has, or you have loads of work to do, you can pass jobs on because it’s like a pool. You try to handle all, you lose all and you lose your business. But you pass it on to him, he [partner] returns the favour and everybody is happy.
Discussion
Despite the setting of our study in the idiosyncratic informal sector, we noted that many aspects of the findings were consistent with those from previous research on coopetition strategy in a socio-cultural context and coopetition strategy as practice. Below, we discuss the key interrelated themes of our findings with reference to the existing research and show how we extend and contribute to coopetition theory and practice.
Implications for theory
Antecedents of coopetition
Within this article, we highlight the level of influence that may arise from non-deliberate policy and regulatory practices. Existing studies highlight the influence that the institutional environment has on the practice of coopetition through deliberate, targeted policy and regulation (Garri, 2021; Kylänen and Rusko, 2011; Mariani, 2007). In common with such literature, our study found that antecedents of coopetition practices included the cluster, the nature of the product and social ties in the immediate geographic spaces (Damayanti et al., 2017; Wang and Krakover, 2008). However, we also found that a number of non-deliberate policy and regulatory practices were central to the social construction of the coopetitive practices that firms adopted, including cumbersome business registration and license renewal processes. The cooperative practices can be seen as a natural response to navigate challenging institutional characteristics. Accordingly, we identify the importance of analysing the influence of socio-cultural context on coopetition practices that depends on non-deliberate and implicit as well as deliberate policy and regulation.
Our study offers a new perspective on the significance and scope of macro-level structural influences on coopetition. Along with Tidström and Rajala (2016), we offer empirical support for Dahl et al.’s (2016) notion of coopetition as a practice within a multilevel framework; we illustrate the importance of individual, team, organisational, network and regional-level influences. We contribute to analyses noting that the wider institutional context can be germane to understanding the antecedents of coopetition, including the national context. Whilst previous work has reported how national business culture may support coopetition (Choi et al., 2009), we extend this by showing how structural variation, for example, in levels of economic development in a country or region, may be a pervasive driver of coopetition strategy practice, especially in the case of indigenous or resource-constrained small businesses. For example, our findings highlight the unreliability or unaffordability of critical supplies, which the government largely controls and excess capacity driven by reliance on imported second-hand equipment designed to service larger markets. These structural exigencies at national level drove the competing businesses to turn to cooperation in the form of all-inclusive resource and information sharing as the most effective response.
We also offer a deeper portrayal of how coopetitive dispositions of small businesses and individual actors may be internalised from embedding macro-level social structures. This is consistent with existing coopetition strategy as practice research (Dahl et al., 2016; Tidström and Rajala, 2016), which recognises the salience of extending the empirical scope beyond the practices of an individual manager or groups of managers within an organisational setting. Our article extends this research by portraying more fully the interplay between praxis, practices and practitioners as the generative mechanism behind coopetition as a social practice. For example, we showed how the early socialisation of the firm owners into the printing cluster was key to understanding why coopetition was such a widespread and uncontested practice along with the ease of setup, informality and flexibility. Closely related to this was the phenomenon of canvassers, as detailed in our findings, and the propensity of owner-managers to provide unquestioning support despite apparent inequities. Thus, we have shown how the coopetitive disposition of individual actors is intertwined with both the mutuality cultural frame upon which the coopetition practices were built and the embedding macro-level social structures. The theoretical implication of this being that full analysis of the antecedents of coopetition strategy calls for understanding of how actors individually, and collectively, internalise a coopetitive disposition from embedding macro social structures. This in turn leads to the notion that coopetition can become a naturalised practice.
Coopetition as naturalised practice
Building on the above, and focussing on the ‘practice’ of coopetition, we propose that coopetition strategy can be conceived as a naturalised practice. This notion moves beyond the previous argument that coopetition may occur as an emergent strategy nurtured, imposed or induced by the socio-cultural and institutional context (Dahl et al., 2016; Damayanti, et al. 2017; Tidström and Rajala, 2016). We also contribute to evidence that proximity, familiarity and sense of place may induce actors to cooperate (Lechner and Dowling, 2003; Wang and Krakover, 2008). Our study found that coopetition had become embedded as a cultural assumption among actors in the cluster; as a result, they no longer undertook coopetition deliberately or purposefully, but as an ingrained and unquestioned mode of operating. Owner-managers in the cluster expressed the view that cooperation with competitors lay at the core of their very existence and success; to them, practices such as resource sharing and mutual support and learning were rendered a sine qua non as alternatives were deemed unworkable. More succinctly, this form of coopetition had become a naturalised practice that can be seen to have arisen not from individual actors, but from the wider distinctive configuration of individual, organisational and extra-organisational levels of praxis, practices and practitioners.
Previous coopetition studies have referred to concepts close to that of coopetition as naturalised practice across contrasting business contexts; Vaara et al. (2004) used the terms ‘inevitable choice’ and ‘naturalisation’ to describe orientation towards strategic alliances in the global airline sector. Similarly, Kraus et al. (2019) found that public pronouncements by managers, founders and presidents of craft beer breweries and associations implied that coopetition was accepted as a natural way of conducting business in the industry. In the informal sector, Eijdenberg (2016) concluded that entrepreneurs in Tanzania eschew competitive aggressiveness because structural influences from the community outweigh individual agency and orientations – they need each other on a day-to-day basis in order to survive. We add empirical support and texture to these studies by revealing how different influences interact to give rise to a situated form of naturalised coopetition practice.
Coopetition as naturalised practice brings a new perspective to previous work on coopetition strategies of small firms. Although Thomason et al. (2013) characterised the practice of owners referring customers to competitors as lacking strategic justification, in our distinctive context and from a ‘strategy as practice’ perspective, this appears consequential to the firm’s very survival and success (Chia, 2004; Chia and Rasche, 2010). This seemingly paradoxical practice can be seen as rational when it forms part of a deeper engagement in mutual sub-contracting relationships such that struggling businesses can even be saved from failure by their peers. Naturalised coopetition practice also gives context to findings by Mariani (2007) and Damayanti et al. (2017) that competition and cooperation can be simultaneous or sequential. In circumstances such as we found, where coopetition is an outcome of deeply layered antecedents and practices, these distinctions are not sufficient to capture how coopetition is undertaken from either a business or policy perspective.
Drawing on the polar case logic (Jugdev and LaFramboise, 2012), the distinctive setting for our study has highlighted the concept of coopetition as a naturalised practice. The specific manifestation clearly derives from the setting: resource-constrained, lacking conventional business compliance, lacking internal organisation and operating in a developing country with concomitant institutional limitations. The naturalised coopetition practice we found was entangled with the wider cultural identity and belonging of the actors, the cluster and the informal sector. Indeed, this entanglement may tie some firms to the sector, as conventional business growth and development represent formalisation, requiring a shift in mind-set. Yet, the polar case logic leads to an expectation that forms of coopetition as naturalised practice will occur more widely, including in conventional small business contexts as indeed, prior work has noted. Our contribution is to demonstrate how strategic actors may pursue coopetition strategy as a naturalised response to a configuration of interconnected structural and agential influences.
Plurality of coopetition outcomes
An additional contribution of our study, reflecting its focus on the ‘broader social organisation’ (Watson, 2012: p.17) surrounding coopetition, lies in the manner in which we extend consideration of coopetition outcomes beyond the scope of prior studies. However, existing coopetition research accounting for its socio-cultural context and studying it as a strategy practice (Damayanti et al., 2017; Tidström and Rajala, 2016) to a degree considers multiple antecedents and drivers of coopetition practice, in terms of outcomes it emphasises intended outcomes. We look beyond these to the unintended outcomes that may not be purely economic in nature (Czakon et al., 2019; Peng and Bourne, 2009). As such, we note individual, organisational and extra-organisational-level outcomes from the prevailing naturalised form of coopetition. For individuals it was consequential as it accorded them a shared sense of apprenticeship, and a channel for socialisation and entry into the cluster (Bourdieu and Wacquant, 1992; Rasche and Chia, 2009). For firms, it provided in-built resilience that allowed them to recover from adverse business events. For the cluster, it carved a viable competitive position comparable to that occupied by large formal printing businesses, despite radically different strategic characteristics, capital configurations, systemic logic and practices. This in turn has societal/national socio-economic outcomes that extend beyond the local operating spaces of the cooperating businesses (Vaara and Durand, 2012; Vaara and Whittington, 2012). The theoretical implication being that in order to fully evaluate a given set of coopetition practices, research must account for unintended and potentially non-economic outcomes that extend beyond the focal actors and organisations and may encompass individuals, firms, networks and aspects of wider society.
Synthesis: coopetition strategy practice
Having advanced the notion of coopetition as naturalised practice, we now consider how this relates to wider conceptualisations of the drivers and nature of coopetition strategy practice. Research on coopetition strategy in a socio-cultural context, and on coopetition strategy as practice, has highlighted the interaction between two pervasive forms of influence, namely individual strategy actors and macro-level forces. These give impetus for the choice of axes of the representation in Figure 2 in which we portray coopetition strategy as emanating from varying degrees of individual and collective influence by actors who are embedded to a greater or lesser degree in a layered set of social structures. This representation builds on the typology proposed by Dahl et al. (2016) and emphasises the primacy of individual agents and of structural influences from the socio-cultural context. The relational approach of our study enables us to extend the notion of social embeddedness of actors beyond their immediate environment to encompass linkages with intermediate and more remote antecedents and drivers. Individuals have agency that permits them to nurture or support coopetitive behaviours and practices, deliberately or otherwise, in ways that either run counter to prevailing social institutional structures, or that reinforce them. Agential and structural nature of coopetition strategy practice.
As a naturalised practice, coopetition strategy and related behaviours and practices are primarily structurally-conditioned, since macro socio-cultural and regulatory institutions, industry and market forces constrain praxis and choice. A wide range of individual actors (strategy practitioners), from inside and outside the businesses, co-construct these structures in a reinforcing manner, via actions or inactions that support and condition coopetition practices. Individual managerial agency is limited as coopetition practices are embedded as a cultural assumption. Examples of this conceptualisation of coopetition in formal and informal sectors and in large as well as small firms have been noted (Eijdenberg, 2016; Kraus et al., 2019; Vaara et al., 2004), where managerial actors exercise more deliberate influence, coopetition strategy becomes an adaptive practice (Kylänen and Rusko, 2011; Mariani, 2007; Wang and Krakover, 2008). In this form, top managers respond to externally-imposed and sometimes intermittent environmental, institutional and regulatory constraints. Because policy and regulatory actors influence the practice; for example, by way of championing deliberate pro-coopetitive policies and regulations, coopetition as an adaptive practice is shaped by both intra- and extra-organisational actors. In this quadrant of Figure 2, top managers have a degree of agency, that is, flexibility around how to respond or adapt to structural constraints and incentives.
The ‘planned practice’ quadrant represents the most widely studied conceptualisation of coopetition in the literature. Studies in this quadrant view coopetition as a rational, calculated and deliberate, internally driven practice largely shaped by practitioners within the focal business (Bengtsson and Johansson, 2014; Gnyawali and Park, 2009; Hanna and Walsh, 2008). In this view, although top managers have agency over coopetition practices, praxis is constrained by the assumption of rationality and economic incentive. Finally, the emergent practice quadrant captures coopetitive practices that are free to evolve without dominant influence from either structural forces or internal managerial agency. Practices are thus, open to multiple intra- and extra-organisational influences on multiple forms of strategy practitioner.
Implications for practice
The coopetitive behaviours and practices revealed by our notion of coopetition as naturalised practice have managerial and policy implications for indigenous and often poorly resourced small business clusters. For owner-managers of such enterprises, our study shows how investing in coopetitive relationships might assist with supply of essential materials and provide business support on a day-to-day basis hence, helping them to deal with pervasive resource deficiencies and/or limited market access. Perhaps the most profound finding for owner-managers is that adopting the coopetitive behaviours and practices described in our study can provide in-built resilience to enable business continuity following adverse business events. Our respondents commented upon how their coopetitive behaviours and strategy gave them much needed support, and even a lifeline, in dire situations that led to temporary business closure. Yet, we may also view these naturalised coopetition practices as a form of coping rather than a path to progression and growth, a question addressed by policy debate regarding the informal sector – beyond the scope of this article. Although arguments exist supporting formalisation in order to facilitate firm growth and development, informal sector literature highlights the sector as being far from marginal or transient (Darbi et al., 2018). From the policy perspective, initiatives have traditionally promoted and supported cooperation in clusters of small resource-constrained businesses by, for example, reducing barriers to entry, promoting regional competitiveness and creating employment opportunities (Hanna and Walsh, 2008; Kylänen and Rusko, 2011; Wang and Krakover, 2008). From this perspective, our findings are valuable in adding the notion of building resilience by embedding pervasive coopetitive practices. As we found, these can help firms cope with internal capability constraints as well as paucity of external macro-level support.
Conclusion
This article offers a critical contribution to current debate by addressing how the configuration of strategy practitioners, practices and praxis explains the coopetition practices of small firms. As a point of departure from existing research, we introduce coopetition strategy as a naturalised practice that can be driven and co-constructed by socially-embedded expectations based on the prior experience and cultural assumptions of strategic actors. We extend the existing coopetition literature by placing the concept of coopetition as naturalised practice within a framework highlighting differing levels of influence from strategic actors (agency) and the macro institutional environment (structure). We show that antecedents of coopetition practice include broader and sometimes pervasive contextual and societal factors, such as degree of economic development in a country or region, as well as localised cluster influences and the assumptions of individual actors. Similarly, we extend prior treatment of the outcomes of coopetition to a plural view that is beyond the purely economic.
Our study of coopetition practices took place in a distinctive cluster of informal printing businesses removed from the more conventional settings of existing strategy and small business scholarship. Yet, following the polar case logic (Jugdev and LaFramboise, 2012), the phenomena we highlight have wider relevance given that small formal businesses share comparable characteristics. For example, our literature review notes that characteristics such as resource dependence, extreme liability of smallness/newness, informality and embeddedness have also been observed in such settings (Granata et al., 2018; Morris et al., 2007).
Further research is called for to establish how these possibilities play out across different contexts. An area for future research that we highlight is exploration of coopetition strategy as an emergent practice (low on agential and structural influences), since this is the least investigated of the four scenarios, we identify in Figure 2. The cross-sectional nature of our research (a single 5-month period) limits what we can infer about firm development over time. Our results include some insights into actor trajectories and entry into the cluster, but a longitudinal study of selected firms may provide a deeper view into their evolution and how differences in coopetition behaviour may affect survival and growth outcomes. Our six focal businesses encompassed a range of firm ages and levels of experience, but we did not find systematic variation in coopetition practices or outcomes between them. In addition, our strategy-as-practice approach, focus on social and relational dimensions of coopetition and coverage of plural outcomes mean that, unlike other strands of coopetition literature, we do not measure economic performance.
Footnotes
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Strategy Research Foundation (SRF-DP2014-093).
Author biographies
Appendix
Business profile and biographies of informal printing business participants
| Participant | Status | Major role | Business name | Formal sector work experience | Number of years of work in informal sector | Informal sector experience | Highest educational qualification | Level of formal education | Area of business specialisation | Reasons for participation in the informal economy |
|---|---|---|---|---|---|---|---|---|---|---|
| Cephas | Owner | CEO | SGC | Minimal | 18 years | Extensive | Art college certificate | Moderate | Branding | Easier way to set up business |
| Allan | Employee | Operations | SGC | Minimal | 6 years | Moderate | University degree | High | Branding | Exploring job opportunity |
| Lenny | Employee | IT and design | SGC | Minimal | 6 years | Moderate | University degree | High | Branding | Exploring job opportunity |
| Mark | Owner | CEO | MCS | Nil | 19 years | Extensive | Basic education | Low | Book printing | Matches previous work experience |
| Francis | Employee | Machine operator | MCS | Nil | 5 years | Moderate | Secondary education | Low | Book printing | Job opportunity |
| Eric | Owner | Managing director | CAS | Minimal | 12 years | Extensive | University degree | High | Branding | Entrepreneurship |
| Pearl | Employee | Graphic designer | CAS | Nil | 1.5 years | Minimal | Design and art college certificate | Moderate | Branding | Job opportunity |
| Tim | Owner | CEO | TVC | Extensive | 6 years | Moderate | University degree | High | Book printing | Entrepreneurship |
| Andy | Employee | Machine operator | TVC | Nil | 7 years | Moderate | Vocational training proficiency certificate | Low | Book printing | Job opportunity |
| Ben | Employee | Machine operator | TVC | Minimal | 10 years | Extensive | Basic education | Low | Book printing | Job opportunity |
| Steve | Owner | CEO | SSC | Moderate | 6 years | Moderate | University degree | High | Branding/Book printing | Entrepreneurship |
| Evans | Employee | Graphic designer | SSC | Minimal | 2 years | Minimal | Polytechnic higher national diploma | High | Branding/Book printing | Job opportunity |
| Rose | Employee | Business development manager | SSC | Minimal | 3 years | Minimal | Polytechnic higher national diploma | High | Branding/Book printing | Job opportunity |
| Teddy | Owner | CEO | FPS | Minimal | 5 years | Moderate | Art college certificate | Moderate | Branding | The only way to self-employment |
| Prince | Employee/partner | Graphic designer | FPS | Nil | 11 years | Extensive | Basic education | Low | Branding | Best suited for self-employment |
Note: All names are pseudonyms; respondents used ‘owner-manager’ and ‘CEO’ interchangeably.
