ORGANIZATIONAL ISSUES ON COOPETITIVE FEDERATED

INFORMATION SYSTEMS

Mirko Cesarini and Mario Mezzanzanica,

Dipartimento di Statistica, Universit

a degli Studi di Milano-Bicocca, Via Bicocca degli Arcimboldi 8, I-20126 Milan, Italy

Keywords:

Federated Information Systems, Coopetition, Data Quality.

Abstract:

In this paper we point out the organizational issues related to the set-up of a coopetitive federated information

system. The joint exploitation of information owned by different, independent, even competing companies

and public administrations may be carried out according to a “coopetitive model”. The term coopetition is

used in management literature to refer to a hybrid behavior comprising competition and cooperation. We will

show in this paper that the set-up of a coopetitive scenario raises organizational issues, which can be addressed

by the creation of inter-ﬁrm personal relationships as well as by the ﬁrms decision makers active engagement.

1 INTRODUCTION

More and more dynamic markets and higher expec-

tations from the stakeholders have pushed ﬁrms and

Public Administrations to continuously improve their

service provision models. In this perspective, an im-

portant role is played by the information management

processes within enterprises and Public Administra-

tions. Thus, managers and stakeholders need accurate

and up-to-date information about the market trends,

the customer satisfaction level, and other topics of in-

terest. Furthermore, information management is the

core business of many sectors (e.g. job market place

intermediation, real estate activities). The increas-

ing information requests obliges the decision mak-

ers to better exploit the information assets which are

available within companies and Public Administra-

tions. The data assets, used singularly, do not pro-

vide enough information, but their joint exploitation

may provide signiﬁcant answers to the information

requests. However, companies and PAs may compete

with each other, therefore, boycotting data exchange.

We claim that the joint exploitation of information

owned by different and independent entities may be

carried out according to a “coopetitive model” (Ce-

sarini and Mezzanzanica, 2006). The term coope-

tition is used in management literature to refer to a

hybrid behavior comprising both competition and co-

operation. Coopetition takes place when some actors

cooperate in some areas while competing in others.

Some authors (Brandenburger and Nalebuff, 1995)

(Gnyawali and Madhavan, 2001) (Lado et al., 1997)

have recently emphasized the increasing importance

of coopetition for today’s inter-ﬁrm dynamics, how-

ever, (Dagnino and Padula, 2002) acknowledge the

weaknesses of conventional approaches and underline

that coopetition is an under-researched theme.

According to (Cesarini and Mezzanzanica, 2006),

three different types of coopetitive scenarios can be

identiﬁed in the domain of the information systems

federation: Reciprocal advantages, in such a case the

involved partners beneﬁt by integrating their informa-

tion systems using a coopetitive model (e.g. Roaming

in different Mobile phone GSM networks, autoroute

automatic toll paying systems for different compa-

nies); Stakeholders that have the power to enforce a

coopetitive scenario e.g., a company or a Public Ad-

ministration may enforce a coopetitive scenario re-

spectively within its suppliers or within its partners;

Statistical Information Systems, some Public Admin-

istrations (or even large companies) may share the

content of their information systems in order to build

a system able to provide information about the popu-

lation for decision support and for statistical analysis.

In the sequel of this paper we will analyze the most

critical organizational issues related to coopetitive

524

Cesarini M. and Mezzanzanica M. (2007).

ORGANIZATIONAL ISSUES ON COOPETITIVE FEDERATED INFORMATION SYSTEMS.

In Proceedings of the Ninth International Conference on Enterprise Information Systems - DISI, pages 524-529

DOI: 10.5220/0002386305240529

 SciTePress

scenarios where the involved coopetitors share their

information systems contents. The set-up of a coopet-

itive scenario requires changes within the companies

or public administrations involved. The changes af-

fect both the ICT internal infrastructure, and the in-

ternal organization. Firstly, the cost of modifying the

information systems in order to provide data to a fed-

eration is very low compared to the annual incomes

of many companies and public administrations, there-

fore, this topic can be neglected (Mezzanzanica and

Fugini, 2003). Nowadays web service technologies

allows the creation of federated information systems

with minimal invasiveness in the legacy systems. Sec-

ondly, a partner joining a coopetitive setting has sev-

eral possibilities concerning internal organization, the

two antithetical are: effort can be spared where co-

operation takes place, therefore, the partner may sim-

ply shift some internal resources from the cooperative

ﬁelds to the competitive ones; the opposite approach

is to enact a business process reengineering may be

enacted to fully exploit the opportunities provided by

the coopetitive scenario.

The paper is organized as follows: in Sec. 2 the

data quality topic will be investigated in the frame

of coopetitive scenarios; in Sec. 3 the organizational

issues will be outlined and the main actors affecting

the coopetitive processes will be identiﬁed; in Sec. 4

the strategies to get the actors actively supporting the

coopetition will be outlined; In Sec. 5 we will point

out the similarities among the set-up of a network of

independent and loosely coupled nodes and the set-

up of a coopetitive scenario; in Sec. 6 the time and

incentive issues will be investigated; in Sec. 7 a case

study will be explored and ﬁnally in Sec. 8 some con-

clusions will be drawn and the future works will be

outlined.

2 DATA QUALITY ISSUE

In a coopetitive information system federation, the

aim of the federation is to share information among

the involved ﬁrms and public administrations (entities

hereafter). It is important to check law data quality

issues, since they may frustrate the coopetitors and

thereby cause the failure of a federation. Low data

quality may be related to several reasons:

• The data managed within a local information sys-

tem is structured and managed according to dif-

ferent goals. We can identify operative goals (e.g.

to book passengers data by airlines, to store cus-

tomer addresses by e-commerce companies), and

management/control goals. Many information

systems are conceived or strongly inﬂuenced by

the management expressed control goals, which

may conﬂict with the users aptitudes, namely the

ﬁnal users (not the managers) who perceive the

information system as a bureaucratic system con-

sidered useless from their point of view. Such a

perception, which might lead people not to use

the system, is usually balanced by the hierarchi-

cal relationships with management. However, in

a federated scenario no (direct) hierarchical rela-

tionship exists among the coopetition board com-

mittee and the ﬁnal users. In this case, it is up both

to the coopetition board committee and to the lo-

cal managers to motivate their staff adequately.

• Data quality is strictly related to the processes

used to manage the data within each local entity.

Given that there is extensive literature that cov-

ers this issue, we need no longer focus on it. We

would like to point out, that, existing local pro-

cesses have not been designed with coopetitive

goals in mind. Should any data subset considered

unimportant for the local business processes, such

data subset is likely to be of low quality although,

it may be important for different coopetitors.

• If there is low expectation from coopetition, little

care will be taken about the quality of the data

provided to the federation, or the data acquisition

processes will not be managed appropriately.

In both cases, the common underlying problem is the

need to modify the internal organization and business

processes to support the coopetition.

3 MAIN ACTOR ROLES

AFFECTING COOPETITION

The entities entering a coopetitive scenario set-up

should carry out various changes. The impact of ICT

changes are few compared with the required organi-

zational changes, both in terms of budget, time and

complexity. Organizational issues can be addressed

in different ways, the two extreme and antithetical ap-

proaches are: 1) to shift resources from the ﬁelds of

cooperation to the ﬁelds of coopetition, 2) to undergo

a Business Process Reengineering to better ﬁt the

company/public administration internal organization

with the modiﬁed scenario. The ﬁrst approach has

minimal impact, the entities exploit that sectors where

cooperation occurs needs less resources. Concerning

the second approach, the involved entities may decide

to undergo a business process reengineering, which

can require high investments. Extensive literature on

Business Process Reengineering (or even Business

Process Improvement) (Hammer and Champy, 2001;

ORGANIZATIONAL ISSUES ON COOPETITIVE FEDERATED INFORMATION SYSTEMS

525

Harrington, 1991) is available, thus we will not ex-

plore these topics further. In this section we are going

to point out some human related issues that should be

addressed when some organizational changes are en-

acted to join a coopetitive scenario. Should an entity

decide to join a coopetition, two actor types mainly

affect the subsequent decisional processes: the deci-

sion makers (e.g. the company board, the Chief Exec-

utive Ofﬁcer, . ..) which affect directly the decisional

processes, and some internal actors that we refer to as

“coopetitive processes key roles” (CPKR hereafter)

who usually have operative roles (they have a lower

position in the hierarchical scale with respect to the

previous actors) can strongly affect the inter entities

coopetitive processes. In a coopetitive scenario aimed

at exchanging registry data, the staff who is in charge

of inputing data can be classiﬁed as the CPKRs. We

are going to study the two internal actor categories

separately.

3.1 The Decision Makers

The board committee managing the coopetitive sce-

nario should carefully consider the decision makers

beliefs and expectations. An entity may join a coopet-

itive setting either because obliged (e.g. law enforce-

ment or stakeholder commitment) or because the en-

tity committee feels that the coopetition may pro-

vide beneﬁts. The contribution of the single entity

to the coopetition depends strongly on how the de-

cision makers are self committed to the goal of the

coopetition. In case of forced joining, the coopeti-

tion board committee must spend a lot of effort in

convincing the decision makers to effectively collab-

orate. Effective coopetitive inter-organization process

execution requires reshaping of the entity internal or-

ganizations (the more the impact of the coopetition,

the more the changes required to the internal organi-

zations). However the decision makers can be reluc-

tant to carry out such activities, due to the high in-

vestments required. The coopetition board committee

can encourage the decision makers involvement using

policy making and moral suasion. Policies that are

able to ﬁt the coopetition goals with both the single

entities and decision makers goals are more likely to

succeed. The impact of policy making activities in

coopetitive scenarios have been studied in (Cesarini

and Mezzanzanica, 2006). Policy making affect the

decision makers behavior directly, while having an in-

direct effect of the CPKRs.

3.2 The Coopetitive Processes Key Roles

The inter-organization coopetitive processes involve

different actors within the entities being part of the

coopetition. Some of these actors may strongly af-

fect the coopetition results, although they may have

little inﬂuence on the single ﬁrm or public adminis-

tration itself. We already referred to those roles as

CPKRs. We can try to explain the topic with an ex-

ample. Most of the coopetitive scenarios focus on in-

formation sharing, the information is primarily man-

aged by the ﬁrms or public administration’s informa-

tion systems. Sometimes, the information system is

conceived for supporting the management control ac-

tivities rather than the operational ones (e.g. data en-

try operators may be asked to collect a lot of infor-

mation, more than that necessary for the operational

tasks). For this reason, the people in charge of data in-

put, feel the information system more like an assign-

ment than like a useful instrument, thus they make use

of the information system only to accomplish the bu-

reaucratic requirements and no more. Furthermore, a

coopetitive setting makes use of information in a dif-

ferent way to that originally planned. Therefore it is

likely that the people will perceive the tasks related to

the coopetition as new bureaucratic ones. Among the

coopetition board committee and the CPKRs there are

no direct hierarchical relationships, so whether the in-

ternal decision makers have no strong commitment to

the coopetition goals, it is likely that the CPKRs will

have a very small engagement within the coopetition

related tasks.

4 FOSTER ACTORS ACTIVE

IMPLICATION

In this section we are exploring how to address the

organizational issues outlined in the previous section.

We will face the problems from the point of view of

the coopetition board committee, namely the entity

who is committed to foster the coopetition. There

may be different form of coopetition (as outlined in

Sec. 1). From now on we will abstract from the dif-

ferences and we will consider a generic coopetition

board committee. The ﬁrst step that the coopetition

board committee has to carry out is to actively in-

volve the decision makers within the coopetitive set-

tings. The goal is that the decision makers involved

should perceive the coopetition as feasible and as

a source of opportunities. People of different enti-

ties should overcome reciprocal suspicious, recipro-

cal knowledge among the decision makers will help

to carry out this step. In this streamline it would be

ICEIS 2007 - International Conference on Enterprise Information Systems

526

useful the creation of a discussion table, where the

decision makers can provide feedbacks to the coope-

tition board committee and may deeper their recipro-

cal acquaintance. In a coopetitive scenario fostered by

a stakeholder the “forced” coopetitors are inclined to

assume a passive behavior, (namely a “waiting” be-

havior): they participate to the coopetitive scenario,

but they spend as less effort as possible and they

observe the results obtained by the coopetitors that

actively engage the coopetition. A coopetitive sce-

nario is likely to succeed if and only if all (or most

of) the competitors will change the internal organi-

zation to exploit the coopetitive scenario. Organiza-

tion changes requires a lot of resources, thus the wait-

ing coopetitors will not carry out such changes, un-

less forced by the situations (e.g. when most of the

coopetitors would have done it). For this reason, the

coopetition board committee should adequately mo-

tivate the reluctant decision makers, should smooth

away the suspicious, and should present the coopeti-

tion as feasible and as a source of opportunities. An

Figure 1: The three phases through which a network form

is established.

optimal plan may is outlined next, it goes through

different subsequent steps: the coopetition scenario

is set-up, sensitization of the decision makers is car-

ried out, stimulated entities as well as longsighted en-

tities will try to effectively exploit the opportunities

of the coopetitive scenario In the steps just outlined

it is very important the time variable. If it takes too

much time, the decision makers could have a kind of

negative feeling about the coopetition success possi-

bilities, therefore they will never shift from a passive

approach to a proactive one. The decision makers ac-

tive engagement is the ﬁrst step in building an effec-

tively working coopetitive scenario, however the CP-

KRs role should be considered as well. Also these

people should be actively involved within the coope-

tition processes, since their contribution is very im-

portant, as explained in previous section. The CP-

KRs may perceive the coopetition related tasks as ad-

ditional bureaucratic effort, in addition the CPKRs

may be required to get in touch with people of dif-

ferent entities to participate in inter-entity processes,

and this can increase the CPKRs reluctance to collab-

orate. The committee management board most prob-

ably has no direct relationships with these people, so

they has to be reached and sensitized through the de-

cision makers collaboration.

5 SIMILARITIES WITH THE

NETWORK FORMS OF

ORGANIZATION

The process of building a federated information sys-

tem on coopetitive basis is strongly affected by the es-

tablishment of mutual relationships with the involved

actors. In these process similarities with the building

of “network forms of organization” are present. The

expression “network forms of organization” refers to

two or more organizations involved in long-term re-

lationships (Thorelli, 1986) and the ﬁrst study in this

ﬁeld have been carried out by (Powell, 1990). An in-

teresting evolution process of network forms of orga-

nization (hereafter network forms) articulated in sev-

eral phases has been described by (Larson, 1992). Ac-

cording to this model, a network form develops in

three phases (summarized in Fig. 1), each with par-

ticular and important social aspects.

1. The ﬁrst phase is a preparatory one, during which

personal relationships are established and good

reputations of the involved people is established.

2. During the second phase the involved actors

starts exploiting mutual economic advantages

from their relationship. During a trial period, the

actors taste in an incremental way their compe-

tences and their availability to cooperate. A posi-

tive ending is the result of the incremental growth

ORGANIZATIONAL ISSUES ON COOPETITIVE FEDERATED INFORMATION SYSTEMS

527

of trust and the evolution of reciprocity norms dur-

ing that period.

3. In the third phase, the organizations became oper-

ationally and strategically more tightly integrated.

But in lieu of cost considerations or legal con-

tracts, effective control and coordination were

achieved, and opportunism avoided, through the

regulatory presence of moral obligations, trust,

and concern for preserving reputations.

A federated information system may be considered

a network form of organization, therefore the issues

concerning trust and relationships may be applied to

the set-up of a federated information system as well.

The trial period just introduced is an important topic

that should be accurately cared during the set-up of a

coopetitive federated information system. Especially

when there are no prior strong relationships within the

involved entities (e.g. in the case when the coopetitive

scenario is enforced by a stakeholder).

6 TIME AND INCENTIVES

A coopetitor may choose to have either a proactive

or a passive (waiting) approach. The decision is re-

lated to the decision makers personal believes, ex-

pectations, and propensity to invest. Every coopet-

itive scenario should reach a speciﬁc “critical size”

so that the coopetitive processes can provide signiﬁ-

cant reward to the coopetitors. otherwise the reward

will be insigniﬁcant. In the latter situation a coopeti-

tor has no advantage to modify its business processes

and internal organization to exploit the coopetitive

scenario, thus the coopetition is going to starvation.

This is likely to happen during the initial transient

time or when the coopetitors are too pessimist, thus,

the coopetition would never start on its own, unless

being stimulated by offering incentives to the play-

ers. Basing on the above considerations, we stress

that in order to set up successfully a coopetitive sce-

nario, an important role is played by the incentives

used to shorten the time it takes the actor involved to

have positive expectations about the coopetitive sce-

nario and about the coopetitive processes.

7 STUDY CASE

The Italian private job agencies and public employ-

ment services, according to a law commitment, have

created a virtual job market place, whose name is

Borsa Continua Nazionale del Lavoro” (BCNL here-

after). A virtual network, whose nodes can be ac-

cessed online from a Portal (Fugini et al., 2006),

federates the information systems of the just intro-

duced entities. The job seekers can access match-

ing vacancy descriptions without being limited to the

boundaries of a local job agency. The federation has

been conceived in order to build such a global mar-

ket place, while preserving the possibility to do busi-

ness by some partners (e.g. private job agencies). An

ad hoc data management model allows to reach both

the goals. Every agency participant to the network

collects curriculum from job seekers and vacancy de-

scriptions from enterprises. The data contained in

a curricula is split in two subsets: the “public” and

the “private” proﬁle. The public proﬁle can be con-

sidered an anonymous version of the original curric-

ula, while the private proﬁle contains the contact de-

tails only. Vacancy data is similarly split in public

and private proﬁles. The public data proﬁles (regard-

ing both vacancies and curriculum descriptions) are

shared among the network and are used to match each

other. If a vacancy public proﬁle matches a curricula

public proﬁle, the job agencies (or public employment

service ofﬁces) are notiﬁed. Contact details are even-

tually shared between the involved intermediaries ac-

cording to business rules. The BCNL service model

is deeper described in (Fugini et al., 2005). In the

resulting scenario, the coopetitors cooperate in creat-

ing a global virtual market place of curricula and va-

cancy descriptions available for matches, while they

compete in looking for job seekers and vacancy of-

fers (to add to the virtual market place), in fostering

matches among job demands and job offers as well as

in selling the contact details to the enterprises once

a match occurs. A similar approach is being eval-

uated in the SEEMP (Single European Employment

Market Place) project (SEEMP, 2006), whose goal

is to conect the national public employment ofﬁces

and private job agencies through a European feder-

ated information system. In the BCNL scenario, the

boards of the private job agencies and the directorate

of the public employment services represent the de-

cision makers within the different entities, while the

front-ofﬁce operators that welcome the job-seekers

and the companies representatives represent the CP-

KRs within the scenario. The front-ofﬁce operators

interview the job seekers, help them to write the CV

and upload the data within the local agency informa-

tion system. The more time they spend to qualify the

job seekers descriptive data that is entered within the

local information system, the higher is the data qual-

ity that ﬂew within the BCNL. Conversely, the front-

ofﬁce operators may insert into the information sys-

tem low quality data, because the operator rely more

on local knowledge and relationships rather than data

ICEIS 2007 - International Conference on Enterprise Information Systems

528

sharing to match CVs with job offers. The coopeti-

tion board committee should enact policies that help

avoiding the latter behavior, because it goes against

the coopetitive scenario goals, i.e. the circulation of

information among the entities being part of the fed-

eration.

8 CONCLUSIONS AND FUTURE

WORK

In this paper we have presented the organizational is-

sues arising when trying to establish a coopetitive sce-

nario, especially when the coopetition focuses on in-

formation sharing. The term coopetition is used in

management literature to refer to a hybrid behavior

comprising competition and cooperation. A coopet-

itive model is getting more and more popular in to-

day’s inter-ﬁrm and Public Administration dynamics.

The set-up of a coopetitive scenario is not an easy

task, it requires times, resources and changes in the

internal organization of the involved entities. The

committee fostering the coopetition has to take care of

the behaviors of the public administrations and com-

panies internal actors who can affect the coopetition

success. From this point of view, we have identiﬁed

that the most relevant actors within an entity are the

decision makers (e.g. the boards of the companies

or the directorates of the public administrations) and

the CPKRs “coopetitive processes key roles” who are

people that can strongly affect the inter-entity coopet-

itive processes. These actors should be adequately

motivated to join and to actively support the coopeti-

tion, mutual relationships should be established pay-

ing attention to build effective collaboration relation-

ships and avoiding opportunistic behaviors. A study

case has been presented, with the goal to point out

some of the topics introduced in this paper. The study

case describe a federated information system of pri-

vate job agencies and public employment centers, that

has been created with the aim of creating a virtual

country wide job market place. Concerning the fu-

ture works, we are investigating coopetitive scenarios

where the set-up transient time length is a critical suc-

cess factor. We are investigating the usage of game

theory to model the coopetitive scenarios and to ﬁnd

out appropriate incentives and policies.

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