Value Creation and Tension in Coopetition: The Emergence of Virtuous and Vicious Cycles

Abstract

Literature on tension in coopetition has focused almost exclusively on ‘simultaneity tension’, which is rooted in the interplay of simultaneous competition and cooperation. Our paper identifies and unpacks a distinct ‘value tension’ which occurs due to simultaneous firm value creation and joint value creation in coopetition. We layout incompatibilities between firm value creation, which is collaborative, and joint value creation, which is cooperative, and articulate the inherent challenges of pursuing both simultaneously. Efforts to pursue both can pull resources in opposing directions, forego scale and scope advantages, and undermine isolating mechanisms that are at odds with each other. We illuminate positive and negative synergies depending on the extent to which firm value creation and joint value creation are pursued simultaneously and how the ensuing tension is managed. We suggest that subsequent behaviors may reinforce the positives, leading to virtuous cycles, or negatives, leading to vicious cycles. Our integration of the coopetition literatures on tension and value with broader strategic management discourse regarding value creation provides novel future-focused insights concerning coopetition and interorganizational relationships.