The management of coopetitive tensions within multi-unit organizations

Abstract

Coopetition strategy is often considered critical for firm performance (Gnyawali, He & Madhavan, 2008; Yami, Castaldo, Dagnino & Le Roy, 2010). However, this paradoxical strategy creates tension, especially when coopetition occurs within an organization (Tsai, 2002; Luo, Slotegraaf & Pan, 2006). This paper addresses existing knowledge gaps by providing the first analysis of the specific managerial methods and the key approaches needed to reduce internal tensions within multi-unit and multi-brand organizations. Using an in-depth study approach in the banking industry, we examine two exemplary cases: Crédit Agricole (CA), which is the leading bank in France and the third leading bank in Europe, and Banque Populaire Caisse d'Epargne (BPCE), which is the third leading bank in France. Our findings indicate that firms simultaneously use formal and informal coordination to manage coopetitive goals. Moreover, to reduce tensions due to coopetition, the banks have developed an original organizational model that allows for the distribution of the antagonist powers and fosters integration. The research shows that inter-unit projects balance responsibilities across the firm, while horizontal coordination and social interaction also eliminate blocking and facilitate decision making. To the best of our knowledge, this study represents the first attempt to examine the management of coopetitive tensions within a multi-unit and multi-brand organization.