Journal of Management Inquiry OnlineFirst, published on February 1, 2008 as doi:10.

1177/1056492607312577

♦♦♦

EDITORS’ SPECIAL

Reconceptualizing the Competition–

Cooperation Relationship:
A Transparadox Perspective
Ming-Jer Chen

Although competition and cooperation individually have received much consideration in

the strategy field, researchers have given little attention to the fundamental issue of
interplay between the two concepts. Nor has a framework been proposed for examining
how competition and cooperation interrelate. Given the notion that competition and
cooperation exist in a paradoxical, either/or relationship, reexamination of the idea of
paradox itself is imperative. This paper converges Western and Eastern ideas to address
the need to transcend conventional perspectives of paradox. It proposes a new concept,
transparadox, a hybrid of the either/or and both/and perspectives that characterize,
respectively, Western and Eastern thought. The transparadox perspective provides an
expansive framework within which the range of competition–cooperation interrelation-
ships may be examined. The introduction of three conceptions of competition–cooperation
relationships (independent, or binary, opposites; interconnected opposites; and interde-
pendent opposites) provides researchers with platforms for future theoretical develop-
ment and empirical study.

Keywords: competition; cooperation; business strategy; paradox

L
“ ike water and oil, competition and coopera-
tion do not mix” (Gomes-Casseres, 1996,
pp. 70-71). “Everything is its opposite, partic-
ularly competition and cooperation. Neither can rise
to its highest potential unless both are seamlessly
blended” (VisaCard founder Dee Ward Hock, in
Waldrop, 1996, p. 75). In his seminal cross-cultural
work, Hofestede (1980) classified the Chinese as high
in collectivism and power distance, among other char-
acteristics. At the same time, the Chinese are known
for their entrepreneurship (Hofestede & Bond, 1988)—
and entrepreneurs, by nature, are individualistic.
Paradox pervades daily life, and how to manage
paradox has long been the subject of philosophical

AUTHOR’S NOTE: This paper is dedicated to William H. Newman for his enduring mentorship. The author would like to
thank Alberto Hanani for his contributions during the early stages of this paper’s development and would also like to
acknowledge Rob Baedeker, Donald C. Hambrick, Kathryn R. Harrigan, Adelaide King, John Michel, Danny Miller, Carolyn
Mu, Mary Summers, Charles Tucker, Wenpin Tsai, and Tieying Yu for their valuable comments on an earlier draft. Please
address correspondence to Ming-Jer Chen, Darden Graduate School of Business Administration, University of Virginia;
Phone: (434) 924-7260; e-mail: Chenm@Darden.Virginia.edu
JOURNAL OF MANAGEMENT INQUIRY, Vol. XX No. X, Month XXXX xx-xx
DOI: 10.1177/1056492607312577
© 2008 Sage Publications

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Copyright 2008 by SAGE Publications.

2 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
and organizational inquiry. As business interactions
have become more complex, paradox has increas-
ingly attracted the attention of strategy scholars. In
one view, paradox lies at the very heart of business
management—”strategy as paradox and paradox as
strategy” (Wels, 1996)—and its significance in busi-
ness practice has been recognized: “The excellent
companies have learned how to manage paradox”
(Peters & Waterman, 1982, p. 100). Poole and Van de
Ven (1989, p. 563) urged researchers to seek out forms
of paradox: “ . . . look for theoretical tensions or
oppositions and use them to stimulate the develop-
ment of more encompassing theories.”
Yet, by continuing to regard paradox mainly within
an either/or (or independent opposites) framework,
the management field in general stops short of embrac-
ing this phenomenon. Lewis (2000) addresses this lim-
itation by encouraging researchers to “transcend,”
rather than avoid or even confront, paradox. The
Chinese “middle way” philosophy, with its emphasis
on balance and the integration of opposites, offers
promise for enriching the conventional Western con-
ceptions of paradox (Chen, 2001, 2002). Middle way
thinking allows opposites to be viewed as interdepen-
dent entities that together form a totality and thus
offers a “transcending” conceptualization of the rela-
tionship between two entities seemingly in conflict.
One particularly vexing organizational paradox,
that of competition versus cooperation, has historically
occupied a central position in strategic management
research. Individually, of course, competition and
cooperation have been the subjects of extensive exami-
nation (Barney, 2001; Ghemawat, Collis, Pisano, &
Rivkin, 2001; Hitt, Ireland, & Hoskisson, 2000; Porter,
1980), and indeed, both competitive and cooperative
strategies are integral parts of a firm’s overall strategy.
For this reason, it is imperative to explore these
two sides of the business strategy coin together.
Brandenburger and Nalebuff’s book (1996) on “co-
opetition” (a term coined by Novell founder Ray
Noorda)—simply put, a combination of competition
and cooperation—greatly heightened interest in this
area. A number of studies delve broadly into the com-
petition–cooperation domain (Gnyawali & Madhavan,
2001; Khanna, Gulati, & Nohria, 1998). The economist
William Baumol noted the practical importance and
emergent modern reality of competition–cooperation
when he observed (through firsthand knowledge) that
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IBM had an agreement with every one of its major
competitors on every major computer component for
years to come (Krueger, 2001)!
Despite significant inroads, however, the strategy
literature has yet to investigate the fundamental
question of the conceptual relationship between com-
petition and cooperation. By tending to cling to the
conventional view that the two constructs are inde-
pendent and oppositional, researchers make a pre-
sumption that prevents full exploration of their
interrelationship and leaves unrevealed the richness
of competition–cooperation interplays.
This paper sets out to address the gaps in both the
competition–cooperation and paradox literatures. It
introduces the concept of transparadox, a framework
that allows for the transcendence of paradox and the
reconceptualization of the competition–cooperation
relationship. Transparadox merges Eastern (Chinese)
and Western conceptions of paradox and the philo-
sophical and logistical strengths of both cultures. It is
proposed in response to Lewis and Grimes’s (1999,
p. 673) notion of metaparadigm, an idea that “strives
to juxtapose and link conflicting paradigm insights
(X and Y) within a novel understanding (Z).” In this
sense, transparadox is the resultant “Z” of the link-
age of two different views of paradox: the holistic,
inclusive consideration typical of Eastern thought,
and the analytical, dichotomizing approach that
characterizes Western thought. It is my belief that by
showing the insights afforded by a transparadoxical
examination of competition–cooperation, the empiri-
cal value of the concept itself will be revealed.
The paper first examines the Western paradox lit-
erature and introduces the Chinese middle way phi-
losophy, specifically the ideas of yin/yang and
paradoxical integration, as the source for the
transparadox framework. It then reviews the litera-
ture that examines different representations of com-
petition and cooperation—research that in general
gives insufficient attention to the conceptual linkages
between the two constructs. Taking the transparadox
perspective, the paper then proposes formally three
conceptions of competition–cooperation relation-
ships: binary opposites, interconnected opposites,
and all-inclusive interdependent opposites. It con-
cludes with a discussion of research and practical
implications. Figure 1 provides a visual guide to the
paper’s progression and key ideas.

Western Paradox
Conception
Avoidance
Confrontation Transparadox
Transcendence
Competition
Binary Opposites
Interconnected Opposites
All-inclusive
Interdependent Opposites
Figure 1: Transparadox: Linking East and West, Competition and
Cooperation
Theoretical Background
Overview
The idea of paradox is characterized by a variety
of meanings and nuances. Derived from the Greek
para, for beyond or contrary to, and doxa, for opinion,
paradox has come to connote a condition or relation-
ship that is beyond reason or logic (Poole & Van de
Ven, 1989). Western tradition has tended to regard
the components of paradox as two independent and
opposing entities. Because of their apparent opposi-
tion, competition and cooperation are among the
most noted paradoxical organizational phenomena.
I argue, however, that the two concepts have been
dichotomized to such an extent that research
progress has been greatly constrained and that an
essential aspect of their relationship has gone largely
unrecognized.
Whereas neoclassical economics theory views
competition and cooperation as opposites that can-
not be mixed, behavioral theory and game theory
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Chen / THE COMPETITION–COOPERATION RELATIONSHIP 3
seem to agree that the two may constitute different
Chinese Middle actions which nonetheless are interdependent. Along
Way Philosophy these lines, a number of interesting questions can be
Yin/Yang raised about the competition–cooperation relation-
ship. To what extent might they in fact be two
Paradoxical
extremes of one continuum? To what degree can one
Integration be considered part of the other—as expressed in the
-Both/And strategic advice to “cooperate and win” (Hamel, Doz,
& Prahalad, 1989)? Does the “death of competition”
(Moore, 1998) necessarily imply cooperation? And
Cooperation
finally, what new insights might be revealed by
examining the competition–cooperation dichotomy
(or “paradox”) with a perspective that goes beyond
our cultural comfort zone?
The competition–cooperation dichotomy, like
other divisions between ostensibly conflicting forces,
is often regarded as a paradox. “Paradoxical tensions
are perceptual—that is, cognitively or socially con-
structed polarities that mask the simultaneity of con-
flicting truths” (Lewis, 2000, p. 761). Whether the
“paradox” between competition and cooperation is
real or perceived, the conceptual link between these
two sides of the strategy coin, given the importance
of their relationship, merits systematic examination.
It is my belief that ample research opportunities
exist if one adopts a more expansive framework—
namely, a both/and (in addition to an either/or) per-
spective—built on the premise that two opposites
may in fact may be interrelated or interdependent
and that together they may form a new theoretical
construct or phenomenon (Chen, 2002; Lewis, 2000).
The transparadox framework advanced in this paper
makes possible different generic conceptions of para-
doxical relationships. The expansive nature of the
framework enables various theoretical perspectives
as well as multilevel analysis in the study of the com-
petition–cooperation strategy duality.
Transparadox fits conceptually with the notion of
metaparadigm. That is, it “does not imply unification
or synthesis, but, instead, the ability to comprehend
paradigmatic differences, similarities, and interrela-
tionships. The goal is a more rich, holistic, and con-
textual purview” (Lewis & Grimes, 1999, p. 675). It is
just such a purview I desire, and which I believe will
provide a platform for new paths of inquiry.
The theoretical background first offers a critical
review of the Western paradox literature and suggests
how the Chinese middle way philosophy can com-
plement it in my proposal for a transparadox per-
spective. It discusses the limitations of Chinese
4 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
philosophy when applied in the Western analytical
context, and it concludes with a review of the
competition–cooperation research that lays the foun-
dation for reconceptualizing the interrelationship
between not only competition and cooperation but
other constructs also generally held to be in opposition.
Paradox in Western Management Literature
Organizational research has increasingly taken up
the study of paradox and its implications in corpo-
rate arenas (Cameron, 1986; Cameron & Quinn, 1988;
Morgan, 1997). Scholars recognize the richness of
multifaceted understandings offered by tensions,
oppositions, and contradictions in diverse explana-
tions of the same phenomenon. Poole and Van de Ven
(1989) considered research along this line to be criti-
cal to the development of encompassing theoretical
frameworks. Likewise, Lewis (2000) stressed that to
make any big advances in management and organi-
zation science, theorists must find ways to deal with
inherent human and organizational paradoxes.
Among organization theorists, Cameron and
Quinn (1988) first differentiated the notion of paradox
from related concepts such as dilemma, inconsistency,
or conflict, stressing that in a paradox, no choice
needs to be made between two or more contradic-
tions. Empirically, Murnighan and Conlon (1991), in
their study of intense work groups (string quartets, in
this case), found that more successful groups did not
openly discuss paradoxes, they simply recognized
them and managed the inherent contradictions
implicitly. Recent theoretical advancement in the
management and organization field has contributed
to paradox research in at least two important ways.
Poole and Van de Ven (1989) showed that paradox can
be resolved effectively in research by such methods as
temporal separation (which takes time into account)
and spatial separation (which clarifies levels of analy-
sis and locality). Others have begun to recognize that
some possible relationships may exist between oppo-
sites: “Paradox denotes contradictory yet interrelated
elements—elements that seem ‘logical’ in isolation
but absurd and irrational when appearing simultane-
ously” (Lewis, 2000, p. 760).
Still, the management and organization field con-
tinues mostly to consider paradox within an
“either/or” framework. That is, the two opposites that
paradox comprises are considered to be independent,
and only one of the two can operate at a given time or
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in a given context. Lewis (2000, pp. 761, 762) has rec-
ognized this constraint and its underlying reason:
Trying to “make sense of an increasingly intricate,
ambiguous, and ever-changing world” often leads to
“polarized either/or distinctions that mask complex
interrelationships. . . . Grounded in the philosophies of
Aristotle, Descartes, and Newton, formal logic
requires parsing phenomena into ever smaller and
more disparate pieces. Yet, formal logic is based on
either/or thinking, incapable of comprehending the
intricacies of paradox.” This remark has found its
empirical support in Peng and Nisbett’s (1999) study
of divergent cultural approaches to contradiction.
In this regard, Lewis and Grimes (1999) recognized
the potential of multiparadigm inquiry for under-
standing paradoxical organizational phenomena and
the importance of having a framework to contain the
diverse insights of researchers, urging theorists to
impose such a systematic structure to focus “diver-
gent paradigm lenses.” The proposal of the transpara-
dox framework put forth here responds directly to
this call.
The Chinese “Middle Way” Perspective
In considering the organizational implications of
one of the major philosophically rooted cultural dif-
ferences between East and West, Newman (1995)
observed: “One of the strengths of Western culture is
in analysis. In contrast, the strength of Chinese think-
ing is in synthesizing and integrating diverse ele-
ments. Particularly in the West, integration of business
activities has received much less study than analysis;
consequently there are many opportunities for
improvement through integration.” Indeed, the mid-
dle way philosophy, which stresses holism versus
analysis and paradox versus exclusive opposites, may
prove to be a fruitful source of ideas for advancing the
paradox literature.
In contrast to the Western analytical way of think-
ing, based on breaking the whole into parts, the
Chinese mindset takes an integrative point of view,
one that considers all things in terms of their relation-
ships—social, economic, or biological (Chen, 2001,
2002). In the Eastern context, paradox implies a con-
sideration not of individual parts and their existence
in a state of conflict, but of the whole and how it links
diverse and conflicting elements; consequently, it
comprehends the interdependencies and interrela-
tionships of the disparate pieces. It is a conception
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 5
Figure 2: Yin/Yang Symbol
rooted in a long-held worldview of integration and
balance.
Based on the presumption that opposites are inher-
ently interrelated, the middle way is a dynamic con-
cept that seeks accommodation and inclusion—
essentially, the balancing of paradoxical tendencies
(Peng & Nisbett, 1999). One of its principal tenets is
holism, the idea of self–other (or holistic) integration in
which “self” and “other” are interdependent opposites
that can only be defined as a pair (Chen, 2001). The
other pillar of the middle way is paradox, which is best
symbolized by the well-known yin/yang image
(Figure 2), opposites containing within them the seed
of the other and together forming a dynamic unity.
To formalize these thoughts for research purposes,
Chen (2002) proposed paradoxical integration, the
concept that two opposites can be interdependent in
nature and together form a totality. That is, A and –A
can combine to form a new entity rather than cancel
one other out as in a zero-sum conceptualization.
The both/and perspective, a mindset that views
paradox as comprising two interdependent opposites, is
deeply embedded in the Chinese language (Chen,
2001). Any number of Chinese words are made up of
two characters that embrace contradictory ideas. For
example, the characters “inside” and “outside” together
mean “everywhere”; “conflict” can be expressed by
joining the characters for “spear” and “shield”; and
“many” and “few” combine to mean “how much.”
Similarly, “ancient” and “modern” combine to form
“history,” and “life” and “death” together become
“turning point.” Perhaps the most well-known
Chinese paradox is wei-ji, the Mandarin word for “cri-
sis,” which is formed by combining the characters for
“danger” and “opportunity.”
Lexicographical examples aside, such considera-
tions so far have remained almost entirely within the
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philosophical realm. Applications within manage-
ment literature have at best been scattered—though
they have been used to explain a few empirical find-
ings. Peng and Nisbett (1999), in their study of diver-
gent cultural approaches to contradiction, showed
empirically that American participants polarize their
views when two apparently contradictory proposi-
tions are presented, whereas Chinese participants are
more likely to accept both propositions. In their
explanation of the result, the authors observe that
Chinese ways of dealing with seeming contradiction,
or opposites, result in a dialectical or compromising
approach; that is, they tend to retain basic elements
of opposing perspectives by seeking a “middle way.”
On the other hand, the Western approach, deriving
from Aristotelian logic, results in the polarization of
contrary perspectives in an effort to determine which
position is correct.
A side-by-side comparison of two conceptions of
opposites illustrates the fundamental differences
between East and West perspectives. As shown in
Table 1, the independent and interdependent concep-
tions of opposites can be compared (and contrasted)
along a number of conceptual dimensions, based on
such research as Peng and Nisbett (1999) and Chen
(2002). The independent conception of opposites
(compared with its interdependent counterpart)
tends, for example, to stress individual parts (rather
than the totality or relationship), to emphasize analy-
sis and linearity (over synthesis and circularity), and
to seek specificity and clarity (versus universality and
ambiguity).
Competition–Cooperation Research
Interest in the joint consideration of competition
and cooperation has been rising, in part owing
to research within the “co-opetition” framework
(Bengtsson & Kock, 2000; Brandenburger & Nalebuff,
1996). Scholars have also been encouraged by the
promise of advancing theories and insights contained
within the paradoxical relationship between the two
concepts (Poole & Van de Ven, 1989). In practice, cer-
tainly, competition–cooperation has become com-
monplace, as suggested in this remark by the chief
operating officer of Oracle Corp., the world’s second-
largest software maker: “If you look at the last ten
years, SAP has been an awfully big competitor, the
number one or number two competitor of ours, and
yet . . . [our] engineers cooperate [with theirs]”
6 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
Table 1
Two Conceptions of Opposites: Independent vs. Interdependent
Independent Opposites Interdependent Opposites
Individual Relationship
Parts Totality
Absolutes Relativity
Clarity Ambiguity
Universal Contextual
Analysis Synthesis
Dichotomy Unity
Linear Circular
Exclusivity Inclusiveness
(Delaney, 2000). The new business landscape is
defined by increasing cross-border competition and
collaborative explorations of commercial opportuni-
ties worldwide, and it demands that the competi-
tion–cooperation relationship be scrutinized from
new perspectives. This paper argues that there are
vast stores of research to be mined, and that this
emerging line of investigation extends well beyond
the bounds of “co-opetition” to encompass research
spanning a range of competition–cooperation concep-
tual representations.
Thus far, research in general may be categorized
into three sets, as shown in Table 2, which lists some
key competitive–cooperative studies: co-opetition
studies; competition-oriented cooperation studies, in
which such cooperative arrangements as joint ven-
ture or alliance outcomes are the focal point of stud-
ies using various competitive (and/or cooperative)
variables as predictors; and cooperation-oriented
competition studies, in which the cooperative rela-
tionship is used to predict competitive outcomes.
Each is discussed in turn below.
Co-opetition studies. Brandenburger and Nalebuff
(1996) defined “co-opete” as “competing without hav-
ing to kill the opposition and cooperating without
having to ignore self-interest.” They employed a game
theory framework to show how two players can use
competitive and cooperative means to influence their
relative values with respect to shared customers and
suppliers. Lado, Boyd, and Hanlon (1997) argued that
the combination of competitive and cooperative
strategies will create a higher overall rent for a firm
(or syncretic rent). Afuah (2000) examined the
effects of major technological changes on a co-
opetitor’s (in this case, a supplier’s) capabilities.
Both Bengtsson and Kock (2000) and Loebecke, Van
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Fenema, and Powell (1999), defining co-opetition as
simultaneous cooperation and competition between
firms, explored how firms can divide and manage
these two kinds of relationships effectively. Co-ope-
tition also has been linked to such research topics as
knowledge transfer (Loebecke et al., 1999), organi-
zational learning (Dussauge, Garrette, & Mitchell,
2000), interunit coordination and resource sharing
within a firm (Tsai, 2002), and firm performance
(Lado et al., 1997).
Competition-oriented cooperation studies. Researchers
have also used various competitive attributes (such as
industry structure and interfirm competitive relation-
ships) to predict outcomes of joint ventures, alliances,
and other cooperative arrangements (such as dura-
tion, intensity, and organizational learning between
partners). Harrigan (1988) analyzed the impacts of
industry competitive traits and strategies on joint ven-
tures and cooperative strategies. Powell and Brantley
(1992) demonstrated how organizations learn through
networks and proposed the term “competitive cooper-
ation.” Browning, Beyer, and Shetler (1995) investigated
the formation of the SEMATECH consortium in the
competitive semiconductor industry. Khanna et al.
(1998) showed how the tension between cooperation
and competition affects the dynamics of learning
alliances, whereas Dussauge et al. (2000) studied the
outcomes and durations of global strategic alliances
among competing firms. Gimeno and Jeong (2001)
found that pairs of global airlines are more likely to
form alliances when they have common partners or
similar rivals.
Cooperation-oriented competition studies. This litera-
ture uses cooperation-related variables to predict com-
petitive concerns. The body of work is considerably
more sparse than the two other research streams.
Notable studies include Gimeno and Hoskisson’s
(1997) examination of how U.S. companies compete in
securing joint venture partners in Latin American, and
Park and Russo’s (1996) use of an event history analy-
sis to show how competition eclipses cooperative joint
ventures. Gnyawali and Madhavan (2001) used coop-
erative networks, reflected by resource flows and
structural positions, to predict firms’ dynamic com-
petitive behaviors toward others in the network.
As shown in Table 2, these studies are conducted
along several dimensions, including theoretical per-
spective, unit of analysis, definitions (of competition,
cooperation, and/or co-opetition), research questions,
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 7

Table 2
Summary of Major Competition-cooperation Studies

Key Research Theoretical

Authors Definition Unit of Analysis Questions Background Variables Types of Study

CO-OPETITION
Bengtsson and Co-opetition: Dyad level - Why are Schumpeterian Independent: Empirical (case
Kock (2000) Any specific co-opetitive dynamic - Resource het- study)
dyadic rela- relationships models of erogeneity Sample:
tionship developed, competition - Competitors' - Finnish lining
between two and how? positions industry
firms that - What are the - Separation - Swedish brew-
comprises strategic mechanism ery and dairy
both visible implications Dependent: industries
cooperation for the firms - Co-opetitive
and competi- involved in a behavior
tion elements. co-opetitive - Co-opetitive
relationship? advantage
Brandenburger Co-opetition: Firm level How can firms Game theory Independent: Theoretical
and Nalebuff A mindset that create added - Managerial
(1996) combines value by mindset
competition using a com- Dependent:
and coopera- bination of - Co-opetitive
tion in the competitive behavior
marketplace and coopera- - Added value
tive strate-
gies?
Bresser (1988) Co-opetition: Firm level What are the Inter- Independent: Theoretical
Matching collec- feasible com- organization - Information
tive (or coop- binations of relations leakage
erative) and collective (or (IOR) - Competitor
competitive cooperative) Resource responsive-
strategies and competi- dependence ness
tive Dependent:
strategies? - Co-opetition
strategies
Lado, Boyd, and Co-opetition: Firm level How can firms Endogenous- Independent: Theoretical
Hanlon (1997) Syncretic rent- generate eco- growth theory - Management
seeking nomic rents of the compet- cognition
behavior that and achieve itive process - Balanced
describes a superior, long- investment
firm's strate- run perform- Dependent:
gic orientation ance through - Syncretic rent-
to achieve a simultaneous seeking (i.e.,
dynamic bal- competition co-opetitive)
ance between and behavior
competitive cooperation? - Economic
and coopera- performance
tive strategies.
Loebecke, Van Co-opetition: Firm level To what extent Game theory Independent: Theoretical
Fenema, and Simultaneous does learning Knowledge - Leverage-
Powell (1999) cooperation cooperation management impact for
and competi- between rivals knowledge-
tion between benefit one receiving firm
firms. firm more - Negative
than the reverse-
other? impact for
knowledge-
sender firm
Dependent:
- Co-opetitive
behavior

(continued)
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8 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX

Table 2 (continued)
Summary of Major Competition-cooperation Studies

Key Research Theoretical

Authors Definition Unit of Analysis Questions Background Variables Types of Study

Powell and Co-opetition: Network - Why do firms Network theory Independent: Empirical
Brantley Cooperate to level cooperate? - Public owner- (Quantitative)
(1992) compete - How does net- ship Sample:
work among - Geography 23 biotechnol-
cooperating proximity ogy firms
firms emerge? - Product mix
Dependent:
- Number of
cooperative
agreement
- Number of ties
in the net-
work
COMPETITION-ORIENTED COOPERATION

Dussauge, Co-opetition: Firm level What is the rela- Dynamic Independent: Empirical
Garrette, and Cooperation tionship resource- - Type of (Quantitative)
Mitchell among rivals between coop- based view alliance with Sample:
(2000) eration objec- rivals (link vs. 227 alliances
tives and their scale) formed in a
outcome and Dependent: range of man-
duration? - Alliance ufacturing
reorganization industries
- Alliance
takeover
- Alliance
continuation
- Alliance disso-
lution
Gimeno and Co-opetition: Interfirm level How do firms Structural Independent: Empirical
Jeong (2001) Inter- find coopera- Balance Prior coopera- (Quantitative)
organizational, tive partners? Theory tion and com- Sample:
i.e., competitive petition Global airline
and Dependent:
cooperative Alliance
relationship. formation
Competition:
Harrigan (1988) The strategic Interfirm level How do a com- Joint venture Independent: Theoretical
external petitor's traits theory - Competitor
environment influence a behavior
that may firm's - Strategic
influence the response to posture
survival of the the needs of a - Capital inten-
cooperative cooperative sity
venture. agreement? Dependent:
Cooperation: - Cooperative
Business venture form
agreements be- - Cooperative
tween firms to venture focus
create a - Operating
separate autonomy
cooperative - Venture
entity. duration

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 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 9

Table 2 (continued)
Summary of Major Competition-cooperation Studies

Key Research Theoretical

Authors Definition Unit of Analysis Questions Background Variables Types of Study

Khanna, Gulati, Competition: Firm level What Organizational Independent: Theoretical

and Nohria A consequence of determines learning - Common
(1998) each firm's the relative Strategic alliance benefits
attempt to use proportion of theory - Private benefits
its alliance competitive Dependent:
partner's and - Relative
know-how for cooperative competitive
private gains. behavior and
Cooperation: between cooperative
A consequence of alliance (i.e., co-
firms using partners? opetitive)
their behavior
knowledge
collectively for
common
benefits.

COOPERATION-ORIENTED COMPETITION

Gnyawali and Co-opetition: Firm level How does the Competitive Independent: Theoretical
Madhavan Simultaneous Dyad level network of dynamic - Centrality in
(2001) cooperative Network level cooperative Structural the network
and linkages embeddednes - Structural
competitive among s perspective autonomy
behavior. competitors - Structural
influence their equivalence
competitive - Network
behavior density
toward each Dependent:
other? - Competitive
action
Park and Russo Co-opetition: Dyad level Why do so Transaction cost likelihood Empirical
(1996) Cooperation Why do so many joint economics - Competitive (Quantitative)
with direct many joint ventures fail? response Sample:
competitors. ventures fail? likelihood Electronics
Independent: industry
- Cooperation (1979-1988)
with
competitor
- Collaboration
experience
Dependent:
- Cooperation
duration

and type of research (theoretical or empirical). The
studies address a range of research questions (e.g.,
“What are the feasible combinations of collective and
competitive strategies?” [Bresser, 1988], “What deter-
mines the relative proportion of competitive and
cooperative behavior between alliance partners?”
[Khanna et al., 1998]). Units of analysis include firm,
dyad, network, and industry. Different theoretical
perspectives (such as game theory, Schumpeterian
competition, network theory, resource-based view,

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10 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
transaction cost, and organizational learning) have
been used to explore a wide range of independent
variables (such as competitive position and resource
heterogeneity, as in Bengtsson & Kock, 2000) and
dependent variables (such as the number of coopera-
tive agreements and ties in the network, as in Powell
& Brantley, 1992).
Although researchers have recognized the need
and promise of exploring competition and coopera-
tion jointly and have taken the first steps toward
developing an integrative understanding, some
notable concerns have constrained both theoretical
and empirical advancement. First, the research in
general tends to use such basic terms as “competi-
tion” (and to a lesser extent, “cooperation”) loosely. A
perusal of the two areas turns up such terms as “com-
petitive collaboration,” “cooperation with rivals,”
and “collective rivalry.” It is not uncommon for
scholars to consider firms operating within the same
industry as de facto competitors (Chen, 1996). There is
also considerable inconsistency of definitions (per-
haps as a result of differing theoretical perspectives).
Second, co-opetition research considers both
competition and cooperation together, whereas the
competition-oriented cooperation research and cooper-
ation-oriented competition studies connect the two
phenomena through their predictive relationship. Still,
the reach of even the most recent research rarely
extends beyond the competition–cooperation amal-
gam (or co-opetition) domain. In this regard, some
interesting questions can be raised through analysis of
the concept of co-opetition. Does co-opetition imply
equal degrees of cooperation and competition? Is there
a threshold for each, beyond which the combination of
competition and cooperation becomes co-opetition?
In the absence of a formal framework for different
conceptualizations of the competition–cooperation
interrelationship, the tendency among researchers is to
fall back into polarization. And as a result, rather than
assume a range of dynamic interplay between compe-
tition and cooperation, the inclination in research is
still, largely, to dichotomize the two concepts and to
regard them as independent and oppositional, or para-
doxical. If we move outside the conventional frame of
reference of the common competition–cooperation
conception, might we discover that two separate, even
seemingly parallel, “lines” eventually converge?
Competition–cooperation research can be advanced,
we believe, if it transcends existing conceptualizations
to explore fully the complexity and richness of compe-
tition–cooperation interdependence and interplay.
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Competition–Cooperation Transparadox:
A New Conceptualization
The middle way philosophy challenges conven-
tional Western thinking and offers the promise of
expanding the scope of that perspective. Yet, it would
be futile to attempt to graft one way of thinking onto
another that has its own deep cultural and ethno-
graphic roots; attempting to do so would compromise
both. Rather, this paper mines the Chinese middle
way for those aspects that fit, complementarily, into
the Western perspective of paradox. Integration of
Eastern and Western thought permits us to stretch the
dimensions of our perspective on how to treat para-
dox and gives rise to the concept of transparadox, a
framework within which various forms of opposites
can be treated simultaneously. Formerly, theorists
have examined competition and cooperation without
addressing conceptually the fundamental question of
the nature of their interplay. The current research for-
malizes the study of their relationship by assimilating
two cultural perspectives that have previously been
as dichotomized as competition and cooperation
themselves and provides a new avenue for “tran-
scending” paradox (Lewis, 2000). As described in the
following sections, the transparadox perspective rep-
resents an effort to transcend paradox on two concep-
tual fronts: by reconciling the opposing Eastern and
Western ideas of paradox, and by bridging the com-
petition–cooperation dichotomy.
Transparadox: Linking East and West
In the transparadox perspective, two opposites
may be interdependent in nature and together form a
totality. Specifically, the transparadox framework
allows for three generic relationships within the con-
cept of paradox itself: (a) independent, (b) interre-
lated, and (c) interdependent.
We can better comprehend the merits of the
transparadox perspective by first distinguishing among
the terms “independent,” “interrelated,” and “inter-
dependent” opposites. By independent opposites I
mean concepts or entities existing together but exclu-
sively—for example, as you exist in relation to a person
of whose existence you are not aware. The term interre-
lated opposites describes concepts/entities the percep-
tion of which is in some way, if not entirely, shaped by
that of the other, as one star relates to another in a
constellation. Finally, I use the term interdependent
opposites to designate entities/concepts that exist only
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 11
within the context of each other, or which find their def-
inition only in terms of that of their opposite—as dark
to light, for example.
Along this line, it is useful to consider the subtle
distinctions between the words two, twin, and dual.
“Two” suggests independent and separate parts,
“twin” implies closely related but separate duplicates,
and “dual” describes inseparable interdependent ele-
ments that together form a whole. Western tradition
has tended to regard the components of paradox as
“two” or “twin” (that is, as discrete entities even if
they are related, such as twins). In the Chinese con-
text, however, paradox is composed of two interde-
pendent opposites, or dualities.
As the traditional yin-yang symbol suggests, oppo-
sites define and are defined by each other, so that it
becomes impossible to conceptualize an idea without
considering and incorporating its inverse. Indeed, it is
the “negative space” that gives shape to the thing or
concept. The notion of “paradoxical integration” tran-
scends the either/or conception of paradox by adopt-
ing a both/and perspective. Equally important, it
recognizes the interdependence that often exists
between two oppositional entities. The closely related
ideas of interdependent opposites and the both/and
perspective capture the essence of the concept.
Anchoring each of these ideas is the premise that
opposites in a paradox are not simply elements bound
in a state of tension, but components interacting to
form a state of wholeness. Rather than dialectic reso-
lution of these interdependent opposites, transpara-
dox allows for their integration.
Perhaps for reasons of speed and simplicity in deci-
sion making, however, opposites have become widely
ensconced within an either/or consideration. Yet, the
notion of interdependent opposites is not foreign to
traditional Western thought. Stories in classical litera-
ture capture the idea within the Western context. One,
the Greek myth of Icarus, allegorically illustrates the
way in which an action can function, paradoxically, as
its own opposite. Icarus, it is recalled, took aloft on
wings fashioned of feathers and wax to escape impris-
onment in the Labyrinth, only to fly too close to the
sun. When the wax melted, Icarus plunged to death in
the sea, victim of the very qualities that gave him
flight—the inventive craft of the wings, and his ambi-
tion. (Miller’s Icarus Paradox [1990] applies this alle-
gory to the corporate world in arguing that successful
companies are destroyed by heady decisions fueled by
past successes. Intel chairman Andrew Grove [1999,
p. 3] also has remarked on this paradox: “Business
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success contains the seeds of its own destruction.”) In
Shakespeare’s Othello, the quality of extreme rational-
ity turns into the horrible and paradoxical attribute of
violent, irrational rage; again, a single behavior con-
tains the seed of its opposite. In a more affirmative
sense, the American poet Walt Whitman put it this
way in Song of Myself: “Do I contradict myself? / Very
well then I contradict myself, / (I am large, I contain
multitudes.)”
The idea of interdependent opposites advanced in
the transparadox framework stresses that the polar
opposites of a paradox are not merely intertwined
in a state of tension, but are in fact the very sub-
stance of a state of wholeness. The fine distinction is
that “intertwined” connotes separate, oppositional
strands or elements, whereas transparadox moves
beyond this “two-ness” toward an idea of insepara-
bility. Thus, elements that have been deemed contra-
dictory, such as competition and cooperation, may be
conceptualized as a strategy duality. Fusing Eastern
and Western philosophical traditions provides us
with a perspective that allows for the reconciliation
of “opposing voices.” If in fact the closer we come to
truth, the more we encounter paradox (as runs one
vein of traditional philosophical thinking), then two
contradictory yet interdependent elements can form
a totality and in so doing, define each other (Robins
& Mortifee, 1991).
A Framework for Transcending the
Competition–Cooperation Paradox
The relationship between competition and coopera-
tion can be conceptualized in several ways. The dia-
grams in Figure 3 depict the dyad as independent, or
binary, opposites, as interconnected opposites, and as
all-inclusive, interdependent opposites. The figure also
shows the progression of the interrelationships from an
either/or to a both/and context and of the conceptions
from independent to interrelated and interdependent
opposites, ideas discussed in the previous section. We
believe that these three generic conceptions of the
competition–cooperation interrelationship provide a
platform for considering interaction between the two
phenomena in a variety of ways and at multiple levels.
In particular, the “all-inclusive” concept (Figure 3-3)
offers a comprehensive framework that enables us to
go beyond the consideration of either competition or
cooperation and to explore a wide range of interfirm
dynamics.
12 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
Figure 3: Competition–Cooperation Relationships
Independent opposites. The first conception, shown
in Figure 3-1, represents a commonly held view—
namely, that competition and cooperation (repre-
sented by two separate circles) are independent, even
irreconcilable, opposites. From this point of view,
competition and cooperation are “absolutes” and
must be considered individually, regardless of context
or perspective: “It is important . . . to separate the two
forces. . . . like oil and water, competition and cooper-
ation do not mix. Instead, they operate side by side,
one after the other, or layered one on top of the other”
(Gomes-Casseres, 1996, pp. 70, 71). Similarly,
Bengtsson and Kock (2000) noted what they
described as fundamentally contradictory logics
underpinning the interplay between competition and
cooperation, and that the complexity of the relation-
ship can be managed only by separating the two
parts. Implicit in this line of thinking is to the assump-
tion that the two forces will cancel one another out, in
a classic “zero-sum game” scenario.
Indeed, one variation of this view is the concep-
tion of an inverse relationship between competition
and cooperation. This is a standard neoclassical eco-
nomics argument, especially in oligopoly market the-
ory (Scherer & Ross, 1990). In deciding on strategies,
oligopolists face a basic dilemma between competing
and cooperating. Economics theory argues that in an
interfirm relationship in an oligopoly market, there
are two opposing forces that influence the balance
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between competition and cooperation. The first force
is the common interest of two or more firms in coop-
erating to maximize their joint profits; the second
force is each firm’s interest in its own profits, which
implies that any firm can usually increase its profits
by behaving competitively. From this point of view, a
firm can increase its competitive behavior only if it
reduces its cooperative behavior, and vice versa.
Interconnected opposites. Another way of conceptu-
alizing the relationship between competition and
cooperation is through actions or interfirm relation-
ships that have both competitive and cooperative
components. This interconnectedness is depicted in
Figure 3-2 as the area of intersection of two circles.
An understanding of what is meant by intercon-
nected is critical. First, the interplay between inter-
connected opposites can derive from either the
ambiguity or the mixed nature of the “opposites.”
For example, General Motors once offered a $1,000
rebate certificate for auto parts with the purchase of a
GM car, but the certificate could be redeemed at any
competitor’s outlet. Should a competitor like Ford
consider GM’s action a cooperative move—one that
could boost Ford’s sales—or a competitive move?
Second, the individual forces of competition and
cooperation are connected in such a way that they
may influence each other and shape the nature of
competition (or cooperation) between firms. Within
this area of intersection reside the seeds of the two
opposites, a consideration germane to Chinese
yin/yang philosophy. It is in this kind of situation—
that is, one of high risk and uncertainty—that the role
of relationship asymmetry (in which two firms may
have different views of their relationship) takes on
fundamental importance in interfirm dynamics
(Chen, 1996). If such a delicate situation is poorly
managed, a firm’s actions may produce the exact
opposite of their intended consequences. Consider,
for instance, the interplay between firms linked in a
network economy. When one introduces a standard, it
needs to cooperate with others to establish the stan-
dard and to create a single network of compatible
users (e.g., fax machines, ATM networks, HDTV stan-
dard, cellular phone networks). Thus, the action of
introducing and establishing standards has both
cooperative and competitive aspects. When a stan-
dard is established, competition between players
within the network will increase (and new players
may also join the network to intensify the competi-
tion), yet all players must maintain the standard
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 13
cooperatively to avoid a significant waste of their
investments (Shapiro & Varian, 1999). The intercon-
nectedness of opposites, and the pressure to manage
the delicate strategic duality, is vividly evident in
this kind of situation. Or as Gimeno and Jeong (2001)
observe, competition and cooperation may in fact be
working as complementary forces behind their
opposition.
The interconnected opposite conception is found
in the roots of the word “compete,” which derives
from the Latin com (together) + petere (to aim at, make
for, strive after) and is defined in the Oxford English
Dictionary as “to fall together, coincide, come
together,” or “to strive after something, in company
or together.” The “togetherness” embedded in the
word’s etymology reveals much about its nature:
even in an oppositional contest, two rivals are inex-
tricably linked and mutually affective.
All-inclusive interdependent opposites. The third con-
ception of the relationship captures all possible
situations of interfirm dynamics—competitive, coop-
erative, and beyond. As shown in Figure 3-3, competi-
tion and cooperation together form the union of two
circles. Some actions and relationships are competitive
in nature, and others are cooperative. The overlapping
area comprises those “interconnected opposites” that
are mixed and/or ambiguous in nature. At the same
time, this third model encompasses situations in
which neither competition nor cooperation is evident,
as well as other possible but unseen interactions.
Applying this conception to the firm level implic-
itly adopts a framework delineated by interorganiza-
tion relationship (IOR) researchers (Dyer & Singh,
1998; Oliver, 1990; Ring & Van de Ven, 1994). This
research stream takes the position that organizations
typically operate in an environment of relational
interconnectedness, and that an organization’s sur-
vival and performance depend on its linkages to other
organizations (Oliver, 1990). Researchers have stud-
ied many types of IORs, in a variety of settings, and
have explored various structural relationships,
including resource exchange and reciprocity (Ring &
Van de Ven, 1994). Two related issues are of particular
interest here. Namely, competitive and cooperative
relationships are the cornerstones of interfirm rela-
tionships, and the idea of organizational interdepend-
ence—that is, the dependence of firms’ decisions and
actions on those of other firms—is critical for under-
standing organizational survival and performance.
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The “all-inclusive” conception can also be applied to
interfirm dynamics at the individual action level.
Conceptualizing competition as the exchange of indi-
vidual moves (or actions) and countermoves (or
responses), competitive interaction research has
emerged in the strategy literature (Chen & MacMillan,
1992; Smith, Grimm, & Gannon, 1992). The research
focus on the behavioral exchanges between firms at the
action-response level—rather than on their structural
relationships—reveals the importance of the competi-
tive–cooperative nexus in interfirm relationships. In
the all-inclusive conception, interfirm dynamics are
multifaceted, and competitive action-competitive
response is only one of many complicated strategic
interactions between firms. A competitive action may
elicit a cooperative response, and similarly, cooperation
between two firms will often provoke competitive
retaliations. (Naturally, it could also elicit a response
that involves other firms joining forces.) Thus, there is
an array of competition–cooperation interplays.
Along this line, Figure 3-3 encompasses not only
two firms’ competitive and cooperative interactions
and possible actions, but also those situations in which
two firms have no competitive or cooperative relation-
ships of any kind—a case that falls beyond the bounds
of our competition–cooperation consideration. This
conception, then, allows us to accommodate those
situations in which two firms neither compete nor
cooperate, as well as other possible “unobserved” con-
structs. The question may arise as to the usefulness of
considering such situations. This construct, by allow-
ing consideration of the “unseen,” is actually markedly
conservative, we believe, because it excludes no rela-
tionship or action from the realm of possibility.
By allowing for the potential contained in any given
action or interfirm relationship, we can move toward
recognition of a transparadoxical perspective: any
action or relationship may contain the seeds of its
opposite, regardless of whether that action appears sig-
nificant or interconnected at a given point in time. An
initiative that, from a given perspective, might seem
unconnected may take on meaning at a later time, or
when regarded from a different perspective. In this
consideration, Figure 3-3 includes two levels of inter-
dependent opposites: the first is between competition
and cooperation, and the second is between the com-
petition–cooperation combination (or the union of the
two circles in the figure) and those beyond this combi-
nation (or the area outside of the union). This second
“opposite interdependence” suggests the importance
14 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
of broader contextual concerns such as institution (e.g.,
government and industry) and culture (e.g., social val-
ues and norms) in the study of competition and coop-
eration. Metaphorically, the size and shape of each area
within the whole (competition, cooperation, and the
intersection of the two) would not remain constant,
and each would be shaped and changed dynamically
by other forces within the whole.
In summary, transparadox holds considerable
promise for further exploration of competition–
cooperation interplay and its broader context.
Undertaking such a systematic analysis of the com-
petition–cooperation relationship while adopting a
more expansive perspective of how these two con-
structs interact could produce abundant opportuni-
ties for higher levels of integration and for the
emergence of new theories.
DISCUSSION
This paper was written with two related purposes.
The first is to advance the transparadox perspective
as a framework for resolving ostensibly conflicting
concepts from multiple paradigms. This objective is
accomplished by linking the Western and Chinese
conceptions of paradox and assimilating aspects
from each to transcend existing notions, in the belief
that each culture has something to offer in develop-
ing such a framework. This paper intends to lay the
groundwork for an effort of this nature.
The second purpose is to investigate, through the
transparadox lens, the conceptual relationship
between competition and cooperation. It provides a
platform for developing some paradigms for exam-
ining competition–cooperation interaction that go
beyond the common assumption of exclusivity
between the two. Our formalization of the three
generic ideas of this interrelationship is intended,
through the conceptual delineation of how these two
concepts relate to each other, to stimulate theoretical
and empirical advancement for research that spans
the competition–cooperation domain, a relatively
new territory in the strategy field.
With respect to the first purpose, the paper makes
contributions in several areas. First, it adds to the par-
adox literature by responding specifically to Lewis
(2000) and to Poole and Van de Ven (1989), who urged
researchers to construct concepts and theories deal-
ing with paradoxical organizational complexities.
Examining competition and cooperation within the
transparadox framework allows for a more complex
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and elaborative view of the dynamic interplay
between these two vital strategy phenomena, and for
a potential cross-fertilization between them. The cur-
rent research stretches existing paradigms beyond
established limits, not only by considering different
forms of paradox, but also by seeking to expand the
paradox perspective from an either/or view of oppo-
sites to a both/and consideration. Further, it seeks to
shift the focus from the notions of independent and
linked, or interrelated, opposites to that of interde-
pendent opposites. More important, it pioneers the
bridging effort by the assimilation of generic cultural
Chinese ideas, such as middle way thinking and
yin/yang. Advances on these fundamental fronts
take the literature in a new and promising direction.
The unique quality of the transparadox frame-
work lies in the generic nature of the three competi-
tion–cooperation conceptions. These basic forms of
interrelationship allow for various theoretical per-
spectives (regarding competition and cooperation,
both individually and collectively) and multiple lev-
els of analysis (such as firm, dyad, action). In this
regard, the proposal of the transparadox framework
responds directly to Lewis and Grimes’s call for
efforts to converge paradigms (1999).
With respect to the second purpose, this paper
contributes to the competition, cooperation, and co-
opetition literatures. It is my belief that unless the
fundamental issue of the competition–cooperation
relationship—that is, the connection between the two
concepts—is clearly delineated, the advancement of
research on this topic will be limited. This effort is a
step toward defining the nature of that interrelation-
ship. Specifically, the paper provides a logical
framework in which the competition–cooperation
interrelationship may be reconceptualized. The three
generic conceptions represent, I believe, the first sys-
tematic attempt in literature to establish the link
between the competition and cooperation ideas. The
current research provides a clear conceptualization—
and visualization—of the scope of co-opetition
research. It also highlights the challenges that con-
front this research stream, such as the resolution of
interconnected—or ambiguous—opposites. For com-
petition–cooperation research in general, reconceptu-
alization along the lines put forth in this paper would
help expand the possible research domain through
realization of the multifaceted nature of the competi-
tion–cooperation relationship.
In sum, formalization of the transparadox idea
and exploration of the competition–cooperation rela-
tionship offer the promise of enlarging the paradox
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 15
literature and expanding the competition–cooperation
research domain. It is my hope that the ideas pro-
posed here will spur constructive theoretical discus-
sion and debate and will facilitate further empirical
investigation.
IMPLICATIONS
This research suggests several implications. First,
researchers might select a framework (from the three
presented here or from their own development) that
fits the purpose and focus of their study, then pursue
the appropriate line of inquiry. For example, taking
the independent opposites (Figure 3-1) perspective, it
may be interesting to examine if the correlation
between some competition and cooperation concerns
is indeed -1, and if not, what factors may contribute
to the less-than-perfect negative correlation. Or the
researcher might explore interplays between firms by
focusing only on those actions that have both com-
petitive and cooperative components; conversely,
one might focus only on those “pure,” unambigu-
ously competitive or cooperative moves. Taking up
the interconnected opposites conception, one might
examine what factors cause an asymmetrical evalua-
tion (Chen, 1996) of the type represented in Figure 3-
2, in which a firm action considered ambiguous
by one party may be considered by another to have
crystal-clear motivations.
The assumptions underlying the relationships
between competition and cooperation must first be
made explicit, and the definitions of the terms must
be clarified. For instance, in conducting cooperation-
oriented competition studies, to what extent does the
researcher assume that cooperation is a means to
gaining favorable competitive outcomes, and that
cooperation is considered to be a deviance from what
is ultimately a competitive purpose? Explicit elabora-
tions and considerations along these lines should be
strongly encouraged.
By extension, it is also necessary to make clear the
focal unit of analysis, the scope of the market, the
time frame of the study, and the organizational
boundary under consideration. A firm’s competition
with another firm at one level, at a given time and
within one organizational unit, may be considered
cooperation with this same firm in different circum-
stances. Extending from this line, an interesting ques-
tion can be raised concerning the extent to which
researchers might apply multiple conceptions in one
research design.
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The ideas discussed in this paper have direct impli-
cations for both the paradox literature and co-opeti-
tion research. For instance, it brings to light possible
issues concerning the autonomy of the derivative con-
struct of co-opetition. As Poole and Van de Ven (1989)
suggested, one way to embrace paradox fully and to
advance research would be to create a completely
new term. Perhaps doing so would also widen the
research latitude beyond the conceptualization of co-
opetition as half competition/half cooperation. Lado
et al. (1997) offer a relevant example through the com-
bination of competitive and cooperative concerns in
their performance construct of syncretic rent.
Along these lines, the Chinese language provides
many instructive examples, such as the Chinese term
for “conflict” discussed earlier, composed of the
words for “spear” and “shield.” Notably, formation of
a new term creates a concept that exists independ-
ently of its etymological origins. Examination of this
particular combination of opposing terms and its inte-
grated form (“conflict”) alongside other synthesized
terms, such as “everywhere” (combining “inside”
and outside”) and “turning point” (a combination of
the terms for “life” and “death”), points to the com-
plexity of the paradox phenomenon. Decomposition
of such terms reveals different types of paradox and
suggests the need to understand the nuances of how
opposing forces interact and shape the whole. This
kind of analysis may have wide implications for par-
adox research.
The all-inclusive conception of opposites, as a
new, comprehensive framework, has potentially far-
reaching implications. Its direct application suggests
that interfirm dynamics can take many forms. At
the interorganizational level, two firms’ relationship
can be classified as competitive, cooperative, mixed
(competitive-cooperative), or neither/nor. At the action-
response level, which underlines the competitive-
interaction research (Chen & Miller, 1994; Smith et al.,
1992), Figure 4 provides the array of competition–
cooperation interplays. A competitive action may
elicit a cooperative response (from players in either
the same industry or a different industry from where
the action is taken), and cooperation between two
firms often provokes competitive actions. The combi-
nation also extends into mixed or neither/nor sce-
narios. Strategic interaction and interfirm
relationship is indeed multifaceted, and how differ-
ent research streams address this reality continues
to be a critical challenge. It is my belief that adoption
of the all-inclusive perspective should be high on
researchers’ agenda and that exploration of the full
16 JOURNAL OF MANAGEMENT INQUIRY / Month XXXX
Response
Competitive Cooperative Mixed
Competitive
Cooperative
Action
Mixed
Neither
Figure 4: Competitive-Cooperative Action-Response Variations
range of interfirm exchanges and relationships is espe-
cially promising.
Finally, the current research suggests business
implications. Increasingly, firms are finding them-
selves in complicated webs of competitive and coop-
erative interrelationships. As internationalization of
commerce continues and as the complexities of busi-
ness multiply, the need for a flexible, inclusive strate-
gic framework will only grow more urgent. Managing
multifaceted relationships in a globalized world is a
challenge Jack Welch has called the modern “riddle of
the Sphinx”: “Who is my customer in the morning, my
rival in the afternoon, and my supplier in the
evening?” (as quoted in Bradley, 1993).
Future Research and Limitations
It is my belief that the simple yet comprehensive
framework of inclusion, which enables the reconcilia-
tion of opposing ideas, contains possibilities for a
variety of research topics. For instance, the expansive
perspective formalized in this paper provides the log-
ical groundwork for reconsidering often vexing issues
of globalization, such as that of indigenous versus
Western business practices. As noted at the beginning
of this paper, an apparent paradox—collectivism ver-
sus individualism—has often been used to describe
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the Chinese. The Chinese are regarded simultane-
ously as a “collective” culture (Hofestede & Bond,
Neither 1988; Hofestede, 1980) and as an entrepreneurial soci-
ety (Weidenbaum, 1996). We can extrapolate from this
seeming contradiction that, first, individualism and
collectivism—similar to other basic concepts such as
family and interpersonal relationships—may have
different cultural meanings (Chen, 2001). The impli-
cations of the current research is that the two ideas are
not necessarily fundamental opposites, but they can
coexist. In a different vein, we can deduce a need to
start from the perspective of the “other,” making the
indigenous approach critical to global research.
Equally important is the need to integrate indigenous
understanding back into the mainstream global con-
ception. In this way the process of “self-other inte-
gration” can enrich research in a number of fields
(Chen, 2002).
It is my hope that future researchers can use the
transparadox framework and other theoretical con-
cepts introduced here to examine seemingly irrecon-
cilable strategy issues. These issues might include
globalism versus localism, efficiency versus effective-
ness, transactions versus relationships, and central-
ization versus decentralization. Instead of limiting
thought by defining these phenomena as opposites,
productive work may derive from considering the
pairs as interdependent, mutually defining dualities.
The potential for reconceptualization along various
dimensions by using such a perspective is promising.
The paper points to some specific research issues.
For instance, how might a firm manage the balance of
competition–cooperation against a given rival? And
what role would market segmentation, organiza-
tional structure, incentive systems, and national cul-
ture play? How do firms deal with opponents that
are considered to be highly salient in both the com-
petition and cooperation dimensions (such as Oracle
and SAP, referenced earlier). Is it more (or less) likely
that cooperation is a means for competition than vice
versa? (Conceptually, one might think in terms of a
small circle contained within a larger circle, showing
cooperation to be a subset or tool of competition, and
vice versa.) Can the relationship, then, be character-
ized as asymmetrical? Similarly, it would be useful to
investigate the theoretical significance of those mixed
actions, how they can be studied empirically, and
how firms deal with them. It is important to under-
stand noncompetitive, noncooperative interaction—
that is., actions or forces that lie outside the “union”
 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 17
of competitive/cooperative arenas (Figure 3-3) but
that nonetheless are critical to interfirm relationships.
What theoretical perspectives can be used to study
such interactions, and how can they be examined
together with those direct competitive–cooperative
interplays?
There are, of course, some limitations to the research
presented here. My research is constrained to some
extent by the very nature of its intentions. It sets out to
lay the groundwork for the reconceptualization of the
relationship between the two generic constructs of
competition and cooperation, aiming for development
of a comprehensive theoretical framework. It is exactly
for this reason that the paper takes a broad view (and
expansive definition) of the two concepts, and incor-
porates widely different representations and concerns
that relate to both sides of this strategy duality. (To
some extent, we might concede, this research is caught
in its own paradox!)
The research in general predominantly presumes a
paradoxical relationship between competition and
cooperation. This premise is certainly supported both
by the conventional wisdom and the implied assump-
tions of the many studies reviewed here. However,
the actual extent of pervasiveness and the degree of
validity of this assumption are open for question and
should be examined empirically. (Based on a sample
of colleagues who participated in presentations of this
research, the consideration of competition and coop-
eration as paradoxical is indeed deeply engrained in
our thinking).
In conclusion, it is my belief that the comprehensive
transparadox framework and the varying conceptions
and ideas regarding competition, cooperation, and
their interplay proposed in this paper should provide
fruitful seeds for future inquiry in these important
topics.
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 Chen / THE COMPETITION–COOPERATION RELATIONSHIP 19

Ming-Jer Chen is the Leslie E. Grayson Professor of Business
Administration at the Darden Graduate School of Business, University
of Virginia. His work has been published in Academy of Management
Journal, Administrative Science Quarterly, Social Forces, and
Strategic Management Journal. He is an associate editor of Academy
of Management Review and a former Chair of the Academy of
Management’s Business Policy and Strategy Division. His research
interests include organizational strategy, competitive dynamics, and
competitor analysis. Dr. Chen holds a PhD from the University of
Maryland.

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