Managing coopetition dynamics: A longitudinal study of a multiparty alliance formation in a large utilities project

Abstract

Multiparty alliances (MPAs) are increasingly used to deliver large utilities infrastructure projects on‐time, on‐budget, and to specified quality. In theory, MPAs should help buyers to coordinate suppliers, enable concurrent scheduling, and create process innovations. On the other hand, these governance structures are inherently less stable than dyadic relationships due to their additional complexity and greater opportunities for free riding. We conduct a multi‐source, longitudinal study, investigating how a buyer actively manages the dynamics between competition and cooperation during the formation of an MPA consisting of a lead organization and directional relationships between all partners. We contribute to MPA and coopetition literature by exploring cooperation and competition dynamics that are associated with the MPA structure that would largely be absent in dyads, and unpack the process by which a buyer orchestrates these dynamics by sequentially introducing new initiatives that seek to balance coopetition. MPAs have been recommended by governments and industry bodies as one solution for time and cost overruns in the utilities infrastructure sector, our study also provides guidance to buyers on the management of the alliance during the critical formation stage of the relationship lifecycle.