Cooperate to Compete with Business Around the Globe

WHY NOT COOPERATE?

In an increasingly competitive, interdependent global economy, achieving objectives is dependent on how well an organization is able to find better ways to use increasingly scarce resources more productively.  One way is to cooperate with other organizations, public, non-profit, or private. Cooperation not only can lead to the more productive use of resources, cooperation also creates synergies between organizations-the attainment of more beneficial outcomes then either organization could attain by itself by cooperating. A company cooperating with another company or companies can help the company become more competitive and profitable. A national government cooperating with another or other national governments, can create synergies to mutual benefit and be more productive in meeting domestic economic development objectives, improve quality of life, create more jobs, etc.

COOPERATION MAKES AN ORGANIZATION BECOME MORE COMPETITIVE

In this increasingly interdependent world economy, where technology has made it easier and cheaper to make products and services that are cheaper and have better quality, cooperation with other organizations, private and public, is part of a required model for success. The term “Cooperate to Compete” refers to the fact an organization, whether business, non-private, or government, when working together with other organizations, can use resources more productively and create a source of competitive advantage.

Business application. In business, a company might form a strategic alliance, where two or more companies will join together each providing a particular resource or resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The strategic alliance is a cooperation or collaboration that aims to create a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. It is even quite common for companies to cooperate with another company, sometimes a competitor, to gain a competitive advantage when they need a resource in a highly competitive market and to increase profits, to more efficiently achieve objectives. Cooperation with another company, even with rivals, can help a company achieve more profit. A good example of a strategic alliance was the General Motors strategic alliance with Toyota 1982-2010. Toyota supplied the technology and General Motors provided the basic product and together they produced a very high-quality product. It was a successful strategic alliance formed by two competitors, one with a failing plant, and the other with appropriate technology, out of necessity. Both benefitted.

As shown in this example, cooperation in business is a “win-win” for mutual benefit. Without mutual benefit, the cooperation will not continue. Companies can also cooperate indirectly with other companies join industry trade associations, chambers of commerce, and local economic development boards, to learn from other companies, learn about new regulations, new methods and ways of doing business, and learn about new technologies that could affect their business. Cooperation makes companies more competitive.

International political science application. Countries also cooperate by working together to produce a source of comparative advantage (comparatively, we are more competitive now that we are working together.) this is called economic integration. Countries working together can improve the quality of their citizens’ lives, increase the number of jobs, and improve their economy by cooperating with other countries. In the field of international political economy, cooperating with other countries to achieve economic development goals is part of the ideology of economic liberalism (as embodied by such supranational organizations as the WTO, IMP which established a system of agreed upon rules, guidelines to make the exchange of goods, currencies, investment, official development aid, possible) which leads to economic integration, such as the European Union, Organizations such as the North American Free Trade Agreement (NAFTA), and Association of Southeast Nations (ASEAN) are good examples. Cooperation with other countries can make countries more competitive, and while all may not all benefit equally, the agreements provide a legal, ethical, and financial structure that allows member countries the opportunity to be more productive in the use of increasingly scarce resources as they strive to develop their domestic economies.

 

About Dr. Ian Gladding

Dr. Ian V. Gladding is Director of the Lewis University International Business and Contemporary Global Studies Program

One thought on “Cooperate to Compete with Business Around the Globe

  1. April 19, 2018 at 4:17 am

    thanks you for the information

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