Interplay between coopetition and institutions: How Japanese airlines enhance bargaining power

Abstract

Organisations engage in coopetition, the simultaneous pursuit of competitive and cooperative activities, because of various environmental factors. The concept of coopetition continues to gain attention as global competition increases. However, the analysis of the influence of institutional elements on coopetition has been limited. This study bridges this gap. We use a case study to examine the coopetition framework among competing Japanese airlines formed to negotiate with major institutional elements: a monopolistic supplier and a government regulatory authority. First, this study identifies the mechanisms through which institutions promote coopetition. The findings point to coercive isomorphism and external hazard as influential institutional mechanisms; through coercive isomorphism, the shared benefits increase, and the cost of cooperation is reduced; through external hazard, organisations are encouraged to unite, and coopetition is promoted. Second, the study identifies the mechanisms through which organisations in coopetition enhance their bargaining power. Specifically, we find two sources of enhanced bargaining power: intensified pressure as a larger group and improved persuasiveness with consensus. These findings have important implications for the theory and management of co-operative organisations, such as for the interaction between co-operatives and institutions, since the coopetition framework we analysed has characteristics close to the values and principles of co-operatives.