Cooperation among the Competitors in International Cargo Transportation Sector: Key Factors to Success

Abstract

The purpose of this paper is to explore how coopera-tion with competing companies can be achieved success-fully. Although international cargo transport sector is chosen, guidelines should be applicable to other indus-tries as well, because they are based on psychological factors, which are universal. The paper is scientifically novel because it: (1) focuses on horizontal alliances; (2) looks at international transport industry sector; (3) evaluates specifics of developing (Lithuanian) market; (4) looks at multi-company cooperation. The costs and management challenges in building successful cooperative projects are often much higher than anticipated. For example Bergquist et al. (1995), studied 75 diverse alliances in the United States, found that about 1 out of 3 had either failed outright, had to be radically restructured, or survived only because the part-ners could not extricate themselves. Research confirms that difficulties in creating suc-cessful alliances in part can be attributed to differences between three strategic viewpoints that dominate world of business strategy: (1) Competitive paradigm, whereby companies gain competitive advantages in one of two ways – (a) by achieving advantageous position in an indus-try; (b) by developing and using core competences to offer better products and services (Prahalad, Hammel 1990; Wernerfelt, 1984; Porter, 1985). (2) Cooperative paradigm, whereby companies exist in a network of interdependent relationships fu-eled by desire of companies to gain collaborative advantages through strategic collaboration (Contractor, Lorange 1998; Hamel, Doz, Praha-lad 1989; Kanter, 1994; Nielsen, 1988). (3) Syncretic paradigm, whereby competitive and cooperative strategies should be pursued simul-taneously to achieve above average performance (Lado, Boyd, Hanlon, 1997). Managers subscribing to competitive paradigm, fail to notice benefits provided by cooperative or syncretic paradigms. Such view prevents them from cooperating altogether. Literature lists following key factors that influence the success of collaborations: (1) Membership; (2) Pur-pose and objectives; (3) Structure; (4) Process; (5) Communications; (6) Resources (Mattesich, Monsey, 1992). First hand research collaborated these findings by indicating that following areas have to be addressed for cooperation to be successful: (a) trustworthiness/depen-dability; (b) alignment of goals and interests; (c) active participation in the projects; (d) careful selection of members for cooperation; (e) detailed definition of coop-eration ahead of time; (f) mechanisms to ensure compli-ance to previously made commitments. Research showed that most cooperative project in the past experienced following major problems: (a) Failing to follow through with commitments; (b) Inability to find compromises; (c) Lack of initiative; (d) Lack of coordina-tion with alliance members. Suggestions how to overcome the roadblocks and difficulties to cooperate: (a) Selecting members of cooperation; (b) Active leadership of the pro-ject;(c) To look at cooperation from a business perspec-tive; (d) A detailed definition of cooperation ahead of time; (e) Ensuring compliance. The paper concludes that difficulties associated with setting up and running cooperative ventures are resolvable and provides specific suggestions that have to be ad-dressed in any cooperative venture for it to be successful.