Collaborating with Competitors: Mechanisms That Mitigate Coopetitive Tensions Among Member Firms in Accounting Associations and Networks

• In Event: Working Better With Each Other: Collaborative, Group, and Audit Team Dynamics

Abstract

When faced with resource constraints, organizations may seek assistance through the formation of interorganizational relationships with other entities that are traditionally viewed as competitors. In the accounting industry, small firms often align themselves with other firms to form accounting associations and networks (“AANs”). However, AANs create a paradoxical environment in which member firms face simultaneous incentives to foster cooperative relationships while also protecting core competencies that could increase the competitiveness of their rivals. We conduct 45 interviews with accounting firm partners, AAN leadership, and other professionals to investigate the mechanisms that mitigate tensions in this setting. Our findings, informed by coopetition and IOR theory, indicate that AAN member firms are willing to share resources and expertise with rival firms because of the transactional mechanisms (i.e., contractual agreements, governance structure, member firm selection, and monitoring processes) and relational mechanisms (i.e., trust, social ties, and reciprocity) in place. Importantly, transactional and relational mechanisms appear to be complementary in this setting since transactional mechanisms inspire confidence among cooperating firms and allow for the development of relational mechanisms over time. Our research enriches existing accounting literature, provides a new perspective for practitioners, and contributes to an emerging theory of coopetition.

Authors

• Kenneth L Bills, University of Arkansas

• Christie Hayne, University of Illinois-Urbana-Champaign

• Sarah E Stein, Virginia Tech