Managing coopetition in diversified firms: Insights from a qualitative case study

Abstract

Cooperation among divisions is usually thought to explain the performance of diversification strategies. However, such divisions are also in competition. Through the in-depth analysis of an intraindustry diversified firm operating in the global semiconductor industry, this paper identifies the sources of coopetition and the treatment of coopetitive tensions among divisions in the production allocation process. We find a multipoint origin of cooperation within a competitive setting. Then, we extend a previous study that considers uniquely two substitute views: (a) corporate-centric; and (b) division-centric. Additionally, by employing formal organizational mechanisms, we show that corporate headquarters guides divisional interaction to form a circular coopetition process. Thus, it is feasible to consider that intrafirm competition and cooperation phases form in a dynamic loop.