EL

PT
ORGANIZATIONAL BEHAVIOUR - II

N
DR. SUSMITA MUKHOPADHYAY
ASSOCIATE PROFESSOR, VGSOM, IIT KHARAGPUR

Module 03:
Lecture 04 : Models on Competition and Cooperation
ORGANIZATIONAL BEHAVIOUR - II

Models

EL
PT
We have learnt about various functions of
competition and cooperation from previous

N
lecture sessions. Now we will be discussing on
various models of cooperation and competition in
this lecture session.
Models on Cooperation and Competition

 The 3’C Cooperation Model

 The Money Game

EL
 Prisoner’s Dilemma

PT
 Porter’s Competitive Forces Model

N
 The 3C Cooperation Model

Enables
Coordination Collaboration

EL
PT
N
Communication
The 3C Cooperation Model

The 3C cooperation model used in this research comes

from article Ellis, Gibbs and Rein (1991) and is

EL
supported by the conception that to cooperate,

PT
members of a group (C) communicate, (C), coordinate
and (C) collaborate (3Cs). As we can see the diagram in

N
previous slide, there is a cycle indicating that people
must communicate to coordinate their working efforts
and collaborate for one single objective.
The Money Game Model

Two players with envelopes receive 1 coin each. They can either:
1. Keep it and return the envelope empty (1 point)
2. Put it in the envelope for the other player, and the facilitator

EL
will add another coin to the contribution.

PT
 Facilitator hands the envelopes to each player.

N
 The game repeats until all the coins are gone.
Goal: to accumulate as many coins as you can.
Note: The number of coins the other player gets will not affect
your own performance.
The Money Game Model

Player B
Player B
Keeps Coin
Gives Coin

EL
Each receives Player A: 0 coins
Player A

PT
2 coins Player B: 3 coins
Gives Coin
(total 4) (Total 3)

N
Player A Player A: 3 coins Each keeps
Keeps Coin Player B: 0 coins 1 coin
(Total 3) (total 2)
Prisoner’s Dilemma

1950: Merrill Flood & Melvin Dresher, RAND

Corporation, created a 'game' for the simplest

EL
example of a 2-person social dilemma: when two

PT
people have a choice to cooperate or defect:

N
 Mutual defection brings a small benefit for both,
 Mutual cooperation brings a medium payoff for both, but
 An unequal move has the most benefit for one and the least
for the other.
Prisoner’s Dilemma

Alber Tucker, a mathematician, created a story to

illustrate the game:

EL
 Two thieves are put in jail. Each is offered the chance to

PT
confess and shorten his sentence.
 The one ratted on will get the full sentence. If neither rats on

N
the other, both are set free.
Prisoner’s Dilemma : The Story

Two men are arrested, but the police do not have enough
evidence for a conviction. The police separate the two men and
offer each the same deal:
 If one testifies against his partner (defects), and the other

EL
remains silent (cooperates), the defector will go free and the

PT
cooperator will receive the full one-year sentence.
 If both remain silent, both will be sentenced to only one

N
month in jail for a minor charge.
 But if each 'rats out' on the other, each will receive a three-
month sentence.
Each prisoner must choose either to betray or remain silent; the
decision of each is kept quiet. What should they do?
Prisoner’s Dilemma : How Does it Work

Prisoner B stays Prisoner B confesses

silent (cooperates) (defects)

EL
Prisoner A stays Each serves Prisoner A: 1 year

PT
silent (cooperates) 1 month Prisoner B: goes free

N
Prisoner A: goes free
Prisoner A confesses Each serves
Prisoner B: 1 year
(defects) 3 months
Porter’s Competitive Forces Model

Threat of
entry
Threat of
substitutes

EL
PT
Bargaining
Model power of buyers

N
Threat of rivalry

Bargaining power
of suppliers
Porter’s Competitive Forces Model

According to Porter, the ability of a firm to make a profit

is influenced by five competitive forces which include-
 Threat of entry by potential competitors,

EL
 The power of buyers,
 The power of suppliers,

PT
 The threat of substitute products, and
 The intensity of rivalry between firms already in the

N
industry.
Porter’s Competitive Forces Model

 Threat of entry by potential competitors

EL
In general, if an industry is profitable new enterprises
will enter, output will expand, prices will fall, and

PT
industry profits will decline. Managers often strive to

N
reduce the threat of entry by pursuing strategies that
raise barriers to entry
Porter’s Competitive Forces Model

 The power of buyers

The next competitive force is the bargaining power of

EL
buyers. The bargaining power of buyers is the ability of

PT
buyers to bargain down prices charged by firms in the

N
industry or to raise the firms’ costs by demanding better
product quality and service. By lowering prices and
demanding better service, powerful buyers can squeeze
profits out of an industry.
Porter’s Competitive Forces Model

 The power of suppliers

Suppliers provide inputs to the firm. These inputs may

EL
be raw materials, partly finished products, or services.

PT
Suppliers include the employees of a firm, who supply

N
their skills and time in return for pay. Whether suppliers
represent an opportunity or threat to a firm depends on
the extent of their control over inputs the firm needs to
function.
Porter’s Competitive Forces Model

 The threat of substitute products

EL
The existence of close substitutes is a strong
competitive threat because this limits the prices that

PT
companies in one industry can charge for their

N
products, and thus industry profitability. If the price of
coffee rises too much relative to that of tea or cola,
coffee drinkers may switch to those substitutes.
Porter’s Competitive Forces Model

 The intensity of rivalry between firms

already in the industry

EL
Intense rivalry between incumbents, is a threat that

PT
reduces the profits of established enterprises.

N
Conversely, anything that reduces the intensity of
rivalry between incumbent firms, allowing them to
raise prices and make greater profits, can be seen as
an opportunity.
REFERENCES

 Aswathappa, K.(2014). Organisational Behaviour, Text, Cases Games. Himalaya Publishing

House, Mumbai

EL
 Luthans, F. (2011). Organizational Behavior: An Evidence-based Approach, Published by
McGraw-Hill/Irwin,

PT
 Cherrington, D.J. (1989). Organisational Behaviour, Allyn and Beacon, Boston, USA
 Porter, M.E.(1998). Competitive Strategy, New York, Free Press,

N
 Gava, V.L., Spinola, M.de.M., Tohini, A.C., and Medina, J.C. (2012). The 3C Model applied to the
classical requirement analysis, JISTEM J.Inf.Syst. Technol. Manag. vol.9 no.2 São
Paulo May/Aug. 2012
 Judge, Timothy A., Robbins, Stephen P. (2017). Organizational behavior-Pearson Ed. Ltd.
 Greenberg, J. (2013). Behavior in Organizations, Tenth Edition, Prentice Hall of India, Delhi
CONCLUSION

EL
In the conclusion of this lecture session, we may recap the
discussion held on models and theories of cooperation and

PT
competition. The learners will obtain knowledge on the

N
overall discussions made in this session.
In the next lecture session, we will be discussing on benefits
and drawbacks of cooperation and competition. Enjoy
learning. Thank you all.
N
PT
EL