Managing coopetition in multipartner alliances of micro firms

Abstract

This research explores how micro firms cope with coopetition tensions in a multipartner alliance over time. Micro firms are significantly pressured to cooperate and compete simultaneously. Coopetition and its management in micro firms are underinvestigated, particularly in alliances with multiple partners. Despite their popularity, multipartner arrangements generate more tensions and are more complex to manage. A longitudinal qualitative case study research focusing on micro firms from the ecotourism sector is employed to understand the mechanisms employed to manage these tensions. Results show that tensions are frequently diffused over more than two partners and tensions' management is conditioned by the liability of smallness and the number of firms affected. The firms' experience in the alliance allows for tailoring the mechanisms to manage tensions over time. Also, contrasting the extant view on faultlines, this study shows that establishing faultlines is a management mechanism promoting value creation and the alliance's longevity but can have a cyclical effect by generating other tensions.