BOOK REVIEWS
By: GILBERT, JR., DANIEL R.., Business & Society, Dec98, Vol. 37 Issue 4, p468, 9p
Adam M. Brandenburger and Barry J. Nalebuff, Co-opetition, New York: Currency Doubleday, 1996. 290 pages.
I.
Co-opetition can be an important benchmark for those who shape the widening discourse about the "greening of business" (hereafter, Green Business). It is not that coauthors Adam Brandenburger and Barry Nalebuff pay much attention to the natural environment. None of the competitors who occupy the Co-opetition conceptual framework get their hands dirty or their faces windburned.(n1) Other than one, one-page case buried in the book's midsection (p. 127), there is nothing "green" about the playing field of competition that Brandenburger and Nalebuff portray. Ironically, this separation between competition and the natural world is precisely why Co-opetition should be useful in Green Business circles.
The Green Business discourse can make two distinct and lasting intellectual contributions to our thinking about the playing fields of competition. Each contribution draws on, and adds to, the concept of human connection.(n2) The significance of that potential contribution comes into clear view when we realize that competitors are strangers on the playing field of competition where Brandenburger and Nalebuff situate Co-opetition.
II.
Co-opetition is a breezy, energetic, and case-filled application of game theory to business problems. Brandenburger and Nalebuff propose that game theory makes it logically possible to telescope cooperation and competition into a clever hybrid idea called co-opetition. The coauthors credit Ray Noorda at Novell with coining the term (see also Petzinger, 1997). Brandenburger and Nalebuff offer co-opetition as a challenge to the maxim that one cannot practice both cooperation and competition.
Brandenburger and Nalebuff argue that winning in modern business competitions is often attributable to the winners' simultaneous mastery of two skills. First, winning competitors take steps to enlarge the market "pie" from which they can feed themselves and from which their rivals, suppliers, and customers can feed, too.(n3) Second, winning competitors make sure that they are in a position to devour the lion's share of that "pie."
Brandenburger and Nalebuff call these skills "cooperation" and "competition" respectively. To catch the reader's attention, the coauthors translate this pairing of cooperation and competition into the practice of "peace and war."(n4) What makes this dual mastery possible, Brandenburger and Nalebuff argue, is a mastery of the fundamental principles of game theory. The mark of a game-theoretic "co-opetitor" the coauthors show often, is his ability to outsmart rivals, customers, suppliers, and anyone else who comes to feed in the market. This book leaves little doubt that the coopetitive competitor is one tough, intensely focused student of others' weaknesses.
The conceptual lineage of Co-opetition is clear and diverse in four important respects.
First, Co-opetition is a faithful addition to the growing genre of "game theory for business" books.(n5) Brandenburger and Nalebuff have produced a sequel to Thinking Strategically (Dixit and Nalebuff, 1991). Indeed, Coopetition is an anthem in praise of game theory. The coauthors admit that game theorists have sometimes been their own worst enemies when it comes to marketing the strengths of game theory. Brandenburger and Nalebuff meet this marketing challenge. Co-opetition contains none of the mathematics and payoffs matrices that can intimidate a newcomer to game theory. In the campaign to spread game theory, Brandenburger and Nalebuff are eager evangelists.
Second, Brandenburger and Nalebuff sustain the spirit of the "five competitive forces" that Michael Porter set forth nearly two decades ago in Competitive Strategy (1980). They do so with their "Value Net," in which customers, suppliers, and competitors can play a "complementor" roles.(n6) The coauthors coin complementor in the spirit (without acknowledgment) of the "good competitor" that Porter proposed a decade ago in Competitive Advantage. Porter (1985) urged that the firm "must compete aggressively but not indiscriminately" (p. 228). Brandenburger and Nalebuff concur in their own way.
Third, Brandenburger and Nalebuff acknowledge, in word and deed, the conception of strategic competitor that Oster (1990) popularizes in her Modem Competitive Analysis. Neither the strategist who applies Oster's framework nor the co-opetitive competitor has any desire to be a price taker in a perfectly competitive market. True to the lineage of strategic management, Co-opetition is not an anthem for free-market capitalism (see Gilbert, 1986). Instead, co-opetitive competitors jump intelligently (i.e., applying game theory) on lucrative market imperfections that, Oster and Porter both warn, will eventually attract hungry imitators.(n7) To discourage hungry imitators, Brandenburger and Nalebuff propose, co-opetitors must follow a detailed blueprint for changing the rules of the games that they play (pp. 159-97).
Fourth, Brandenburger and Nalebuff are unabashed "front-runners" who praise one winner after another in the annals of market competition. In doing so, they continue a long-standing tradition of Business Policy writing. Co-opetition joins the recently released Forbes Greatest Business Stories (Gross, 1996) and Sloan's (1963) timeless My Years With General Motors in the long line of literature in which the scorecard of business has two only columns: winners and those unmentionables who fail to win (see Gross, 1996; Sloan, 1963).
For these reasons, Co-opetition can be a source of comfort and entertainment for many readers. This book is not a radical business story. Brandenburger and Nalebuff know that. They do not break an "intellectual sweat" in justifying the application of game theory to business. The coauthors seem content with the fact that others have done that work for them.
This confidence about game theory provides an opening for those who join in the crusade for Green Business. Green Business must, by definition, replace the playing field of co-opetitive competition in our minds and in our sights. In two regards that I develop below, Green Business can be a fountainhead of alternative visions of the playing fields of competition.
III.
A key concept in any discussion of human ecology is equilibrium. Human ecology pertains to the search for two simultaneous and complementary equilibriums. One equilibrium is human harmony with nature. The other equilibrium is humans' harmony with each other about their places in the natural environment. We commonly discuss the former equilibrium in terms of "the balance of nature." We commonly describe the latter kind of equilibrium in terms of norms and conventions about acceptable degrees of the balance of nature.(n8)
Humans' straggles to make sense of this pair of equilibriums are vivid in a sampler that includes Leopold's (1970) A Sand County Almanac, Norris's (1993) Dakota: A Spiritual Geography, Quinn's (1992) Ishmael, Callenbach's (1977) Ecotopia, Abbey's (1976) The Monkey Wrench Gang, Tepper's (1989) The Gate to Women's Country, and McPhee's (1971) Encounters With the Archdruid. Regarding this intellectual struggle, the very title of McPhee's (1989) The Control of Nature(n9) has a certain mocking tone to it. In each of his three case studies, McPhee introduces us to a human community whose members condone complicated and daring efforts to intervene in the balance of nature.
In Managing for a Small Planet, Stead and Stead (1992) argue that such a dual equilibrium must find its way into management thought and practice. If the Steads and their allies are successful, then one intellectual contribution of Green Business will be to "force" one premise into our consciousness and then into our ideas about business competition. By that "green" premise, the members of any human community share, at a given time, some agreement about the place that their community takes in the balance of nature.(n10)
In some communities, such an agreement can be endorsed tacitly and without much fanfare. Weekly participation in recycling programs is a case in point. In some communities, such agreement can be public and activist, such as "grassroots" initiatives to reject toxic waste dump sites. Certainly, in any human community, there is room for alternative agreements about better versions of a balance of nature.(n11)
The upshot is that Green Business can introduce into management thought the idea that human beings are inevitably connected on the subject of their places in the natural world. Furthermore, because business competition can bring human beings into lasting ties with one another, Green Business can be an opening for rethinking our conceptions of the playing fields of competition. Still, the Steads' are voices in the wilderness of business competition. The intellectual lineage of Co-opetition is mainstream. Co-opetition is a sobering reminder that a popular model of business competition is not friendly to the idea of human connection in the conduct of business competition, green or otherwise.
Equilibrium per se is unimportant in the Co-opetition framework.(n12) Co-opetitive businesspersons are concerned with wins and losses. Coopetitive businesspersons are not concerned with any lasting convergence of interests in the form of norms and conventions that we might define as a particular "us" (Gilbert, 1996a: 63-86). To co-opetitors, the playing field of competition is not something that human beings cohabit. Rather, the playing field of competition is simply a supply of opportunities to win by means of shrewd, game-theoretic decision making. Brandenburger and Nalebuff make it very clear (p. 5) that cooperation is merely one of a business competitor's options.
Brandenburger and Nalebuff cannot make an argument for equilibrium in business competition, because they are faithful game theorists.(n13) It is true that Co-opetition has room for three terms that imply that co-opetitors willfully take steps to build stable human communities: mutual gain, cooperation, and peace. But, appearances are deceiving here. The game theorist's versions of mutual gain, cooperation, and peace have nothing to do with the concept of human connection. It is ironic that these meanings are divorced from human connection, but it is not accidental.
In game theory, mutual gain occurs when two game players receive some positive payoff at the same time. But the prospect of "win-win" that Brandenburger and Nalebuff hail as a co-opetitive innovation has nothing to do with the mutual action by which human communities can endure. In game theory, mutual gain refers merely to a fortunate result of egoists' decisions. In game theory, cooperation is merely the absence of a zero-sum result. There is nothing joint about cooperation in game theory.(n14)
Accordingly, the importance of peace in Co-opetition is an exaggeration. Brandenburger and Nalebuff argue that peace, such as a long-term supply contract, is useful only if it is a way for a co-opetitor to win.(n15) At best, the peace that Brandenburger and Nalebuff describe is a trace during which the winner-to-be tolerates the presence of others until the winner-to-be decides that he is prepared to outsmart them. That peace looks nothing like what the framers of a peace treaty accomplish toward some improvement in human ties.
Here is a verdant opportunity for Green Business to make a second intellectual contribution. Green Business not only makes room for lasting human ties at the heart of business competition, something that the best efforts of game theorists Brandenburger and Nalebuff cannot ever produce. Green Business, by virtue of the emphasis on green things, can also open our eyes in new ways to the playing fields of competition. Green Business can change forever the way we talk about business competition, because Green Business is a way to marry sight and idea.
IV.
Green Business, by definition, takes place along the margins where human institutions meet ecosystems. Raphael (1986) uses the term edges to portray these margins. Accordingly, Green Business is an opportunity to unleash our visual imaginations about the playing fields of business competition. Once our visions are unleashed, our intellects can follow suit on the edges. This is a second potential intellectual contribution of Green Business. Photographers and painters and poets and lyricists have blazed trails for management educators who want to "see green" as they "talk green."
No longer must we visualize business competitors as human beings who are trapped in the sterile cubicles that Adams (1996) satirizes in "Dilbert" cubicles stripped of any scent, sound, and vista of the natural world. The competitors in Co-opetition never get out of the office.(n16) No longer must we visualize business competition as something conducted in the unnatural world of digital signals zipping over global telecommunications networks. And, no longer must we visualize "green" business competition as simply the absence of the dirty stains that business competition can leave on the land. We can see today, as we could a generation ago, the waste piles next to crumbling coalfield collieries, the marginal farming communities on the Great Plains, and the remnants of the great North American bison herds. Green Business can replace both "nongreen" conceptions of business competition--the sterile corporate landscape and the competition debris we have inherited--with new visions of the playing fields of competition.
Green Business is something that we can see on such playing fields of competition as the fenced grasslands of the Great Plains, the lock-and-dam system on the Mississippi River, the reforested slopes of clear-cut mountainsides, and the sentinel of telephone poles stretching across the American West.
Green Business is an intellectual opportunity to ask imaginative questions about these sights and then to create imaginative conceptions of the playing fields of competition. With the fenced grasslands in view, we can ask, as Hasselstrom (1987) prompts us, in Going Over East: Reflections of a Woman Rancher, "What traditions of competition can be passed along to our heirs?" Alongside a lock-and-dam system on the Mississippi River, we can ask, "What interventions in the river ecology will spill over for those who ply the river long after we are gone?" With a reforested clear-cut slope in view, we can ask, "Over what horizons in time are we responsible for restoring the natural world that we have consumed?" Watching the wires from telephone pole to telephone pole stretch to the long horizon, we can ask, "What avenues of communications are useful for sustaining human ties and what avenues clutter our land and our ties to one another?"
All these questions turn on the importance of a "we." All these questions are cues to launch our interpretations of business competition on the premise that lasting human ties are a good thing.(n17) All these questions, linked to the green that we can see in our world, presume the existence of some stable human understanding that is both familiar and open to debate by those who live by it. All these questions open our eyes to the playing fields of competition as places where human beings are tied to each other over time.
Co-opetition, as a celebration of what shrewd strangers can accomplish, stops us from seeing human connection over time.(n18) In the co-opetition way of thinking, it makes no sense that generations of football players representing Harvard and Yale Universities have shaped and celebrated a rivalry that they call "The Game" on plots of grass, dirt, and sky in Massachusetts and Connecticut (Goldstein, 1996). The Game is an equilibrium on the playing fields of competition.(n19) The Game is an answer that generations of competitors have sustained around the question, "How do we ensure that the very best of our rivalry is never forgotten?" A co-opetitor's interest in such an equilibrium lasts only as long as his current winning streak.
V.
In sum, Co-opetition is a prime example of what happens when those who study competition do not spend very much time lingering near, and participating on, the playing fields of competition, particularly those that consist of grass, dirt, rock, water, and air. Green Business is an invitation to open our senses to the natural world and the marks that we competitors leave on the world and on each other. Co-opetition takes us in the opposite direction. Co-opetition will help you understand why "green" imaginations deserve a place in management education. It is a book worthy of inclusion in the reading list of every first-year doctoral student and every student encountering the principles of management for the first time.
NOTES
(n1.) I focus throughout this critique on the framework that Brandenburger and Nalebuff propose, not on the particulars of a given case per se. The coauthors discuss the National Football League, where someone gets his hands dirty. However, that contact with the natural environment is not part of co-opetition as the authors develop the concept.
(n2.) This is human connection laced with the mutual empathy that distinguishes self-inrelation feminism. It is not the thinner, more disposable kind of connection that, as Petzinger (1997) shows, is creeping into modern business language. By contrast to the meaning that I employ throughout this critique, Petzinger does not use a feminist meaning of "connection" in his discussion.
(n3.) To encourage co-opetitors to think in terms of enlarging the "pie," Brandenburger and Nalebuff deliver this pep talk: "What matters is not whether others win--it's a fact of life that they sometimes will--but whether you win" (p. 37).