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More than friendship is required : an empirical test of cooperative firm strategies

Pesämaa, Ossi and Hair Jr, Joseph F (2006): More than friendship is required : an empirical test of cooperative firm strategies. Published in: Management Decision , Vol. 45, No. 3 (2007): pp. 602-615.

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Abstract

Purpose - The purpose of this paper is to examine a proposed six-construct theoretical model of factors influencing successful cooperative relationships and strategy development. Design/methodology/approach - A theoretical model of strategy development and cooperative relationships was tested. Qualitative research among key experts identified 15 successful regional tourism networks. Two successful cooperative networks were selected based on annual revenues. A sample of 254 small and medium-sized members were surveyed from the two networks in Northern Minnesota, USA. Findings - Strong support was obtained for the proposed model. Hypothesized relationships were tested and the findings were consistent with previous research. Long-term orientation has a positive effect on friendship, loyalty, trust and commitment. Friendship is related to loyalty and commitment, and loyalty is related to trust. Ultimately, trust and commitment engender successful cooperation. The model can be used as a guide to strategy development at different levels in an organization. Research limitations/implications - Large firms select between higher and lower order functional strategies. Small and medium-sized firms sometimes address commitment and cooperative strategies through shared goals and decisions in order pursue higher order strategies. This paper research supports a greater emphasis on establishing relationships using loyalty, trust and commitment to develop successful higher order strategies. However, relationships based on friendship also can be an important consideration in strategy development. Practical implications - Strategic implications for developing relationships that can be used as a planning component of hierarchical strategies. Originality/value - The paper maintains that loyalty is more important than friendship in developing successful strategies based on cooperation.

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