Redefining the Rules of the Economic Game
- New Horizons in Institutional and Evolutionary Economics series
Edited by Marie-Laure Djelic and Sigrid Quack
Chapter 6: Coordinating Transnational Competition: Changing Patterns in the European Pulp and Paper Industry
Kari Lilja and Eli Moen
Kari Lilja and Eli Moen INTRODUCTION The strategy and management literature has tended on the whole to ignore issues of coordination of action between competitors, particularly at the transnational level. There is a growing sense however that ‘the image of atomistic actors competing for profits against each other in an impersonal marketplace is increasingly inadequate in a world in which firms are embedded in networks of social, professional, and exchange relationships with other organizational actors’ (Gulati et al. 2000, p. 203). Such an argument is derived from and builds upon studies that have concentrated on joint ventures, strategic alliances and the pooling of resources for functional activities, as in R&D consortia. But even within these studies the coordination of market behaviour and strategic commitments of competing firms have received little attention. By contrast, studies in business history and historical sociology have shown that competing firms are able to identify joint interests that constitute the glue for policy networks. Joint interests also form the basis for the founding of interest and trade associations. Within the framework of such associations, competitors have been able to coordinate several aspects of market behaviour as well as underlying strategic commitments. Such associations can also function as platforms for informal coordination of activities including at the transnational level. In this chapter, we focus on horizontal coordination of markets and firms precisely at the transnational level. Our field of study is the European pulp and paper industry. Like many other sectors, the pulp and paper industry...
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