Regulatory focus compatibility, commitment and innovation in SME coopetitions

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Regulatory focus compatibility, commitment and innovation in SME coopetitions

 

Author: Szeto, Sin Ho Martin
Title: Regulatory focus compatibility, commitment and innovation in SME coopetitions
Degree: D.B.A.
Year: 2015
Subject: Small business -- Management.
Strategic planning.
Hong Kong Polytechnic University -- Dissertations
Department: Faculty of Business
Pages: ix, 92 pages : color illustrations
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2890588
URI: http://theses.lib.polyu.edu.hk/handle/200/8466
Abstract: Coopetition is a paradoxical strategy in which firms simultaneously cooperate and compete with their competitors. Past studies on the formation and success of coopetition have usually focused on factors at the firm level among large corporations. However, small and medium enterprises (SMEs) nowadays also choose to collaborate with their competitors. Their objectives for forming such strategic alliances are similar to those of the large corporations, that is, to survive competition in the short-run and enhance competitive advantages for long-term prosperity, but the factors that contribute to partnership formation and success can be very different. Unlike the cases of the large corporations, determinants of coopetition formation and success among SMEs are mostly social and relational. Grounded on the perspectives of similarity (Byrne, 1961) and complementarity (Bohns & Higgins, 2011), this research contributes to the research of SME coopetition by identifying how regulatory focus compatibility would affect partnership commitment and its subsequent impact on innovation. This study consists of several components, including a qualitative interview study and a main survey study. The data are collected through Qualtrics.com, an on-line survey platform. Senior SME operators have been invited to participate in a 2-wave on-line survey. A series of multiple regression tests are then conducted to analyze the data. The findings provide support to two of the three proposed hypotheses. The results show that commitment to a coopetition partnership is generally stronger when the business partners have supplementary regulatory focuses, but weaker when their regulatory focuses are complementary, or different. This pattern of findings confirms, not the complementarity perspective of Bohn et al. (2011), but the similarity-attraction perspective per Byrne (1961). However, this supplementary effect does not hold when trust between competitors is considered. The findings show that the supplementary effect prevails in conditions where there is little trust, but not for the complementarity effect. When trust is strong, partnership commitment is high and neither the supplementary nor complementarity in regulatory focuses between partners matters much. As predicted, commitment is related to two measures of firm innovation, namely, incremental and breakthrough innovations. In sum, one major contribution of the present findings is that knowledge is advanced with regard to why and how commitment to a coopetition can be successfully sustained in relation to the similarity and complementarity effects of their regulatory focuses, and the boundary conditions for these effects. An obvious managerial implication of the results in this study is that coopetition can be a viable option for SMEs through which innovations can be achieved. Also, the understanding of how the compatibility of regulatory focuses will function in different relational situations enables SME operators to select the right competitors as their partners, thus leading to successful business performance.

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