Collective Strategy Development Essay

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For more than than than training close to JSTOR, please contact supportjstor. org. John Wiley Sons is collaborating with JSTOR to digitize, exert and extend access to Strategic Management Journal. http//www. jstor. org Strategic Management Journal, Vol. 9, 375-385 (1988) AND warring MATCHING COLLECTIVE RUDIK. F.BRESSER Baruch College, The City University of unseasoned York,New York,New York,U. S. A. This piece treates possibilities for combining incarnate and warlike strategies. Combinations provide be problematic if combative intentions ar discover through the breeding colligate government issueingfrom bodied strategies. subsequently describing how antithetical bodied strategies may lead to an ungoverned revelation of strategicalalal randomness, a typology evaluating the feasibleness of dodge combinations is developed. The typologys implications for research and managerial practice ar discussed.A recent victimisation in t he business policy literature is a concern with strategic planning at a peg level. peg strategies be attempts by sets of constitutions to manage their mutural interdependence and the system kinetics of their interorganizational environments (Astley and Fombrun, 1983a Bresser and Harl, 1986 Thorelli, 1986). In managing interdependent and dynamic environments, corporal strategies privy be reactive by absorbing social movement inwardly an environment, or they pile be proactive by forest individually(prenominal)(prenominal)ing the unpredictable air of former(a) organizations.Firms pot use incorporated strategies in combination with warring strategies. This composing discusses the extent to which much(prenominal) combinations ar feasible. MANAGING INTERDEPENDENCE organisational interdependence exists whenever nonp aril organization does not entirely control every last(predicate) the conditions necessary for achieving a proclivityd accomplishment or outcome (Pf effer and Salancik, 1978). In addition to environmental movement, interdependence can cause problems of decision-making uncertainty for central organizations. This occurs because the success of activities chosen by any interdependent organization depends on the activities selected by opposite organizations.Consequently, an interdependent organization may gather up to consider early(a) organizations actions, and it faces decision-making uncertainty if it is aware of its interdependence and has rockyies in controlling the activities of other organizations. Decision-making uncertainty is most(prenominal) plausibly to be perceived among crosswisely interdependent organizations operating in oligopolistic securities perseverances. Under these conditions on the whole organizations are aware of their mutual interdependence and pack considerable unmanageableies in controlling distributively others behaviors as they argue with one another(prenominal) for commercialize share (F ombrun and Astley, 1982 Pennings, 1981).Business crockeds can use cardinal private-enterprise(a) and corporate strategies to manage their interdependencies. The literature distinguishes three major dimensions of agonistical strategies bell, promotional, and increase argument strategies (Khandwalla, 1981). Competitive strategies manage interdependence successfully if they result in advantageous militant positions, olibanum forestalling interdependence and reducing decisionmaking uncertainty (Pennings, 1981). For Received 20 October 1986 Revised 21 July 1987 ? 0143-2095/88/040375-11$05. 50 1988 by John Wiley & Sons, Ltd. 376 R. K. F. Bresser table 1.Coordination mechanisms for give voice strategies Coordination mechanism Regulative law detection mergers articulation ventures interlock directorates stack standstills tacit consent and diligence loss leaders Degree of formalization in luxuriously spirits noble uplifted High look into Moderate offset instance , product differentiation can create a protected domain for a central organization with boundaries hard to percolate by other challengers. However, in complex business environments interdependencies very much are obscured from focal organizations so that individually make out with the dynamics of these environments becomes problematic (Emery and Trist, 1965).In these situations, lift upive strategies can supplement rivalrous strategies as a elbow room of coping with the variation of interdependent environments (Astley and Fombrun, 1983a). CONCEPTIONS STRATEGY OF COLLECTIVE CONFLICTS BETWEEN rivalrous AND COLLECTIVE STRATEGIES Bresser and Harl (1986) draw the dynamic relationship amidst agonistical and corporal strategies as being composed of deuce strategic perspectives that are dialectically restored to one another.For instance, when militant strategies prevail within a market the resulting convulsion and decision-making uncertainty withaltually result encourage organizations to use more corporate forms of strategizing. However, when embodied strategies prevail and create dysfunctions (such as reductions in strategic tractability, amplified impacts of external disturbances, and regard of innovative outsiders) which also cause environmental movement and decision-making uncertainty, private-enterprise(a) strategies may again be considered the more attractive methods for coping with interdependence.The dialectical relationship between warlike and collective strategies implies that organizations should remain ener situateic to potential dysfunctions developing from their operating strategies, and that they should keep on a capacity to append between more collective and more competitive forms of strategizing (Bresser and Harl, 1986). However, some conflicts between competitive and collective strategies can be anticipated and should be considered in the beginning a grouchy outline mix is adopted.This paper evaluates combinations betwee n competitive and collective strategies in light of a potential conflict arising from the need to twain share and conceal strategic tuition. Whenever organizations attempt to use twain typefaces of strategies simultaneously, i. e. competitive The barrier collective schema has been defined in cardinal different ways (Astley and Fombrun, 1983a Bresser and Harl, 1986). On the one hand a collective schema is defined as a larger interorganizational ne twainrk which emerges unintendedly.As individual organizational actions aggregate into interorganizational ne iirks an unintended collective outline emerges that none of the participating organizations could have foreseen. Developments in the telecommunications manufacturing exemplify the emergence of an unintended collective outline (Astley and Fombrun, 1983b). On the other hand a collective outline can also be voluntary and intended. much(prenominal) a collective dodge results from the purposive collaboration of organizatio ns attempting to manage their mutual interdependence.This paper focuses on voluntary collective strategies, developed by oligopolists to manage their horizontal interdependence. Voluntary collective strategies can be ground on different coordination mechanisms. panel 1 presents these mechanisms utilise tip of formalization as the distinguishing standard (Bresser and Harl, 1986 Fombrun and Astley, 1983). Regulative legislation (resulting from collective lobbying) and catching appoint coordination forms with elevated levels of formality. collective strategies based on interlocking directorates or trade associations are characterized by weaken levels of formality, and collusion as closely as fabrication leading can be classified as informal coordination mechanisms. twinned bodied and Competitive Strategies strategies in one business celestial orbit and collective strategies in others, a potential for contradictory activities or conflicts arises, because the major advanta ge of a collective outline is a major disadvantage from a competitive point of opinion.With regard to managing interdependence the major advantage of a collective outline is that it establishes linkages and communication channels through which development or so other interdependent organizations can be obtained. Through this study the behavior of other organizations becomes predictable. This makes an environment more stable and less threatening for a focal organization, and thus reduces decision-making uncertainty (Fombrun and Astley, 1983 Pennings, 1981).Precisely this advantage of a collective strategy (stability through predictability) is a disadvantage if organizations wish to use competitive strategies to further their growth goals. Successful competitive strategies require that organizations advance the secrecy of their strategic plans to forestall imitation (Starbuck and Nystrom, 1981). However, this need for secrecy is jeopardized if interorganizational linkages and c ommunication channels resulting from a collective strategy al modest organizations to predict and anticipate one anothers moves in areas where they wish to compete.Thus, organizations face a venture of anarchic reading divine revelation when victimization collective and competitive strategies side by side. take chances of exposure of anarchic instruction divine revelation is defined as the likelihood that a disclosure of strategically tippy breeding entrust occur, where the mold of disclosue is undisciplined from a focal organizations point of view and damaging to its competitive plans. The potential monetary value resulting from an errant disclosure of cultivation is particularly salient in oligopolies (the dominant US market structure) because in such markets ompetitors typically are in a position to use reasonable learning to exert control over each others fates (Pennings, 1981 Scherer, 1980). Evaluating the attempt of uncontrolled education disclosure emanati ng from collective strategies is essential for two reasons. On the one hand, such information disclosure tends to hark back competitive strategic intentions ineffective. On the other hand uncontrolled information disclosure tends to aggravate problems of strategic inflexibility.Bresser (1984) and Bresser and 377 Harl (1986) argued that organizations adopting collective strategies limit their strategic flexibility because, by agreeing to abstain from certain types of competitive behaviors such as price disceptation, they curtail their repertoire of available strategic tools. When considering the problem of uncontrolled information disclosure, losses in strategic flexibility resulting from a collective strategy may be even more encompassing.If the managements of organizations realize that the communication cogitate provided by a collective strategy al clinical depression for an uncontrolled disclosure of strategic plans, they may be reluctant to pursue competitive strategies even in those business areas that are not eccentric to a collective agreement. PROCESSES IMPAIRING SECRECY Since potential combinations between competitive and collective strategies face the lay on the line of uncontrolled information disclosure resulting from collective strategy links, they raise the issue of strategic fit (Venkatraman and Camillus, 1984).In order to minimize problems of uncontrolled information disclosure it is necessary to obtain some degree of compatability among realistic strategy combinations. Attaining a fit between competitive and collective strategies requires rootly of all an appreciation of the processes that may impair an organizations desire to have the secrecy of its strategic plans. put over 2 summarizes for each type of collective strategy the particular processes that may lead to an impairment of secrecy, and it assesses the try of uncontrolled disclosure of information.If collective lobbying leads to protective regulation the activities of regu lators may impede challenger (Pennings, 1981). Regulators frequentlytimes collect and disseminate a wealth of information about regulated industries. Through these information f littles, regulators can allow competitors to forecast each others moves even in areas that are not subject to regulatory control.For example, Litwak and Rothman (1970) suggested that the Federal Communications Commission had provided the broadcasting networks with so much information about the broadcasting industry that the networks were able to anticipate their competitors behavior and, as a result, effective competition was not likely. The autonomy of 378 R. K. F. Bresser Table 2. Processes impairing secrecy and risk of uncontrolled disclosure by type of collective strategy Type of collective strategy Impairment of secrecy Risk of uncontrolled information disclosureRegulative legislation Contracting Mergers juncture ventures Interlocking directorates Trade associations Collusion and industry leaders Regulators collecting and disseminating information Contracts contingent on information Dissatisfied employees (defectors) Mediation of information pass(a) on of information due to multiple and indirect communication links Distri merely ifion of trade statistics Informal communication High unhopeful down in the mouth fair High Intermediate Low regulatory agencies in their information-gathering activities results in advanced risk of uncontrolled disclosure.Contracting refers to the negotiation of formal agreements among organizations (Thompson, 1967). In general, the information telephone exchanged as a result of contractual negotiations will be focuse, avoiding the disclosure of sensitive competitive aspects. However, some contracts such as bank loans may require that focal organizations provide extensive information about their competitive plans. This raises the guess that information leaks within the information-seeking institution will be exploited by a focal organization s competitors. Since he disclosure of sensitive information in the context of contractual negotiations is not very common, the risk of uncontrolled disclosure can be considered low. Mergers and joint ventures are two special forms of contracting. Mergers, with the exception of hostile takeovers, are contracts through which two or more organizations comneunder common control. Joint ventures can be viewed as partial mergers which preserve the autonomy of the organizations involved. Often mergers are accompanied by a host of administrative problems (Lubatkin, 1983).For example, departments and operations must be consolidated and initial inequities in compensation have to be resolved. If such administrative problems remain unresolved, inefficiencies will result, as well as employee dissatisfaction and turnover. The merger between Kennecott Corp. and Carborundum Co. is a case in point (Business Week, 1983). The two companies managements quarreled over administrative problems and, after a short period of infighting, most Carborundum executives jumped ship.There is danger that defecting executives may disclose strategically sensitive information concerning the group meeting firms when they join other organizations within the same industry. However, the risk of uncontrolled disclosure resulting from a merger is considered low. This is because senior executives leaving merging firms often receive generous severance compensation for which they promise continued confidentiality. Additionally, since merging firms often develop new strategic concepts, the information available to departing executives is likely to be quickly obsolete.If a collective strategy is based on a joint venture the risk of uncontrolled disclosure is considered to be at middling levels. Although the cooperation provided by a joint venture is restrict to specific, mutual business problems, the regularity and spaciousevity of interactions typical of a joint venture may allow participating firms to i mprove their intelligence about each others competitive strategies. For example, firm representatives engaged in joint ventures can develop friendship ties where they feel free to discuss more general strategic issues.During such discussions sensitive information may be disclosed inadvertently. Interlocking directorates result from organizational co-optation activities whereby organizations describe external representatives to their Matching Collective and Comnpetitive Strategies boards of directors. Since many directors sit on the boards of two or more companies (Bunting and Barbour, 1971), interlocking directorates emerge which can be used as instruments for managing interdependence and uncertainty by encouiraging cooperation and the formation of collective strategies (Aldrich, 1979 Pennings, 1980, 1981).However, the risk of uncontrolled disclosure is high because the scope and the intensity of intra-industry communication facilitated by direct and indirect interlocks is beyond t he control of individual organizations. Therefore, it is very difficult for individual organizations to conceal their competitive strategies when their directors have membership in a network of interlocking directorates. Trade associations provide member organizations with special run at low costs.For instance, they may distri merelye trade statistics, provide credence references on customers, offer reasoned and technical advice, or help collect bills (Olson, 1965). In addition, associations can aid in removing decision-making uncertainty resulting from interdependence. Since trade statistics largely include prices quoted in recent sales transactions as well as cost developments, member organizations have the opportunity to organise their market behavior and thus implement a collective strategy (Scherer, 1980).The airing of statistical information provided by trade associations may impair the desire of focal organizations to maintain secrecy their competitive strategies. While firms regiarding are often in favor of price and cost reporting activities, they run the risk that other sensitive information concerning their competitive strategies may also be disclosed. Trade associations sometimes analyze industry trends regarding product development or marketing strategies, and thus allow competitors to anticipate each others moves.A focal organization may have little control over the winsome of information being disseminated because trade associations are often dominated by a few tendinous organizations. Olson (1965) described the National sleeper of Manufacturers as largely financed and controlled by a few big corporations, although the association had some(prenominal) thousand members. There is the possibility that such domination leads to activities favoring a smattering of member organizations preferably than the majority. In addition, the selective services provided by 379 ssociations function as subtle forms of coercion restricting a firms flexib ility. The exclusivity and low costs of legal, financial or other services run for as strong incentives for joining or remaining within an association even if a focal organization disagrees with some association activities. Thus, when using trade association activities to enforce a collective strategy, a check into risk of uncontrolled information disclosure is likely. The term collusion denotes express agreements, idle or secret, that have the purpose of restricting competition.Most calculative agreements are outlawed in the United States because they encourage monopolistic set behavior. Nevertheless, scheming practices are widespread and often effective performer of managing interdependence. Their attraction is associated with their high degree of informality which makes it difficult for outsiders to detect conspiratorial agreements (Khandwalla, 1981). manufacturing leadership is a tacit version of collusion based on imitation. It describes a situation where a specific fi rm is the ac intimacyd leader in setting prices, and other firms follow.As opposed to collusive agreements, industry leadership has the advantage of not being contrary to the antitrust laws. It is considered legal as long as it is grounded on voluntary imitation rather than explicit communication (White, 1981). Since collective strategies mediated by collusive agreements are based on informal communication and, in the case of industry leadership, on imitation, the risk of uncontrolled disclosure is low. Colluding firms will share information only in areas where they wish to cooperate while maintaining the secrecy of their competitive plans.The above risk assessments imply that uncontrolled information disclosure is ever damaging for the success of a focal organizations competitive plans. While the dynamics of oligopolistic markets would tend to support this assumption (Scherer, 1980), the degree of slander resulting from uncontrolled disclosure can be viewed as contingent upon sev eral(prenominal) situational variables. Specifically, four situational variables appear valuable breadth of information disclosure, quality of information disclosure, asymmetry in interdependence, and event control.These situational variables can facilitate the combination of a high-risk collective strategy with competitive strategies, and they can make the betrothal of a 380 Matching Collective and Competitive Strategies dimensions. This is relevant for evaluating strategy combinations because an uncontrolled disclosure of information is less troublesome if competitors are unable to take advantage on the information due to their inability to serve rapidly to a focal organizations competitive moves.Table 3 presents a typology of possible combinations between competitive and collective strategies, and evaluates their feasibleness from the perspective of individual firms. Generally, a strategy combination is considered feasible if (1) the risk of uncontrolled information disclosur e is low. Feasibility evaluations also take into account (2) the degree of competitor responsiveness typical for a competitive dimension, and (3) typical characteristics of specific collective strategies, namely the number of participants involved and the stability of an agreement.Considering typical characteristics of collective strategies is significant because such characteristics can modify feasibility ratings that are based on assessments of the risk of uncontrolled information disclosure and the level of competitor responsiveness. Situational variables, described above, may mediate the damage resulting from uncontrolled information disclosure but do not lend themselves to generalizations and therefore are excluded from considerations leading to the typology shown in Table 3.However, in using the typology, situational variables will have to be taken into account, as is shown in the implications section. In Table 3 the competitive dimensions price, advert and promotion, and p roduct plan are distinguished for each of the seven collective strategies summarized in Tables 1 and 2. Within each of these competitive dimensions, organizations can relate to each other by using either competitive or collective strategies.Thus, six strategy combinations are possible for each type of collective strategy, leading to a total of 42 combinations presented in Table 3. I Since only two values are possible within each competitive dimension, and since the extreme cases (competitive or collective strategies across all competitive dimensions) are irrelevant as they do not represent combinations of collective and competitive strategies, the total number of strategy combinations C for each type of collective strategy can be calculate by collective strategy with low or moderate risks of uncontrolled disclosure problematic.For example, the potential damage resulting from uncontrolled disclosure may be considered low, and thus can facilitate the adoption of a collective strate gy where the risk of uncontrolled disclosure is high, when the competitive information that could be disclosed is not very encompassing (breadth of information disclosure), or of questionable quality regarding its dependability and/or timeliness (Adams, 1976 Smart and Vertinsky, 1977). Similarly, if interdependence is asymmetric, with some organizations being in a relatively powerful competitive position (e. . due to their size), uncontrolled information disclosure may not be very troublesome for these powerful organizations because they know that other competitors lack the resources to exploit the disclosed information (Pfeffer and Salancik, 1978). Likewise, damage may be low and containable, if organizations can rapidly and effectively counteract events leading to uncontrolled information disclosure, for example, by changing force play or the content of a collective strategy (Pfeffer and Salancik, 1978).Implications for evaluating the feasibility of strategy combinations result ing from the role of situational variables are discussed below. COMBINATIONS OF COMPETITIVE AND COLLECTIVE STRATEGIES Apart from an understanding of how collective strategies can lead to uncontrolled information disclosure, an assessment of what types of combinations between competitive and collective strategies are feasible requires that different competitive strategies also be distinguished. Three distinguishing dimensions of competitive strategies are pricing, advertizing and promotion, and product innovation (Khandwalla, 1981).These dimensions can be classified according to their degree of competitor responsiveness (Ansoff, 1984). The term competitor responsiveness refers to the speed with which competitors can act to variations in competitive conditions. While price cuts usually can be matched instantly, it takes much long-life to organize retaliations to a heavy advertising campaign, and even longer to respond to product innovations (Khandwalla, 1981 Scherer, 1980). Thus com petitor responsiveness decreases along these three competitiveC = (21- 2) where d is the number of competitive dimensions considered. For d=-3 dimensions the number of possible strategy combinations is C=6. R. K. F. Bresser Table 3. Combinations of competitive and collective strategies and their feasibility Dimensions of competition Types of strategy Pricing combinations 1. 1 1. 2 1. 3 1. 4 1. 5 1. 6 2. 1 2. 2 2. 3 2. 4 2. 5 2. 6 3. 1 3. 2 3. 3 3. 4 3. 5 3. 6 4. 1 4. 2 4. 3 4. 4 4. 5 4. 6 5. 1 5. 2 5. 3 5. 4 5. 5 5. 6 6. 1 6. 2 6. 3 6. 4 6. 5 6. 6 7. 1 7. 2 7. 3 7. 4 7. 5 7. IL aspiration principle Regulation argument Regulation disceptation tilt Contracting Contracting controversy Contracting aspiration opposition Merger Merger contest Merger arguing competition Joint affect Joint Venture Competition Joint Venture Competition Competition Interlocks Interlocks Competition Interlocks Competition Competition Trade tie-in Trade stand Competition Trade Association Competit ion Competition Collusion/IL Collusion/IL Competition Collusion/IL Competition Advertising and promotion Regulation Competition Regulation Competition Competition Regulation Contracting Competition Contracting Competition Competition Contracting Merger Competition Merger Competition Competition Merger Joint Venture Competition Joint Venture Competition Competition Joint Venture Interlocks Competition Interlocks Competition Competition Interlocks Trade Association Competition Trade Association Competition Competition Trade Association Collusion/IL Competition Collusion/IL Competition Competition Collusion/IL 381Product innovation Regulation Regulation Competition Regulation Competition Competition Contracting Contracting Competition Contracting Competition Competition Merger Merger Competition Merger Competition Competition Joint Venture Joint Venture Competition Joint Venture Competition Competition Interlocks Interlocks Competition Interlocks Competition Competition Trade Associati on Trade Association Competition Trade Association Competition Competition Collusion/IL Collusion/IL Competition Collusion/IL Competition Competition Feasibility of strategy combination Low Low Intermediate Intermediate Intermediate Intermediate Intermediate High High High High High High High High High High High Intermediate Intermediate High High High High Low Low Low Low Low Low Low Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate Intermediate IndustryleadershipThe first group of (six) strategy combinations uses competition in one or two competitive dimensions in conjunction with regulation as the basis for enforcing a collective strategy. The feasibility of all six combinations is rated either at low or intermediate levels. The first two combinations (1. 1 and 1. 2) have a low feasibility rating. If organizations use regulation to harmonize their promotional and product innovation activities, and hav e competitive flexibility in the area of pricing (combination 1. 1), their chances of competing successfully are slim. This is because 382 R. K. F. Bresser an industry may remain intense. In fact, often firms merge to obtain strategic advantages in the areas of price competition, promotion or product innovation wlhich may increase rather than decrease competitive interactions.When joint ventures serve as mechanisms to enforce collective strategies, feasibility ratings for strategy combinations are similarly favorable. This form of collective strategizing also tends to involve only a few organizations, allowing for competition within a particular area in spite of joint venture activity. fHowever, joint ventures carry a higher risk of uncontrolled information disclosure than contracting or mergers. Thus cautious feasibility evaluations seem appropriate when a focal organization engages in joint ventures in more than one comnpetitivearea, and when the only competitive dimension not sub ject to collective coordination is characterized by relatively high levels of competitor responsiveness (combinations 4. 1 and 4. 2).In these situations the relatively high number of information links among firms participating in several joint ventures multiplies the risk and potential damage of uncontrolled disclosure. If organizations choose interlocking directorates to coordinate intra-industry activity, they constantly run a high risk of uncontrolled information disclosure. Co-opted directors may intentionally or inadvertently, directly or indirectly, pass on sensitive information to a focal organizations competitors. Thus, relying on interlocks to enforce collective strategies while simultaneously attempting to maintain some competitive flexibility does not appear feasible.The predominant feasibility rating designate to the group of strategy combinations using trade associations as a means to develop collective strategies is intermediate. Although experience demonstrates that the coordination provided by trade associations loosely does not go beyond price and cost reporting (Scherer, 1980), the possibility of trade associations collecting and reporting other sensitive information is forever acute. Often individual organizations cannot oppose such uncontrolled reporting of industry developments, especially if the association is dominated by a few powerful corporations. If trade associations do not engage in price reporting, but are used to develop collective strategies in the areas of advertising and promotion, and product innovation (combination 6. 1), a low uick competitor responsiveness can be pass judgment with respect to the pricing dimension, and regulators are likely to disclose sensitive information concerning advertising and innovations. A similar argument applies to combination 1. 2, where competitive conditions exist only with regard to advertising and promotion, a dimension characterized by intermediate levels of competitor responsiveness. Since competitors usually need considerable time to respond to product innovations, combination 1. 3 (with regulation in the other two dimensions) is not quite as problematic as the first two combinations. However, the distinct possibility of uncontrolled information disclosure through regulator activities makes combination 1. 3 feasible only at an intermediate level. Combinations 1. 4 through 1. allow for competition in at least two dimensions. While these combinations provide organizations with a larger arsenal of competitive tools than the first three combinations, they also are considered feasible only at intermediate levels because of the risk of uncontrolled disclosure through regulators. The feasibility of strategy combinations involving contracting as a form of collective strategizing generally is considered high because the risk of uncontrolled information disclosure tends to be low. In addition, often (and in contrast to regulation) only few organizations participate in a particular contractual agreement, thus limiting the extent to which competition is constrained.If, within an industry of say eight oligopolists, three contract to standardize product designs, competition with the remaining five oligopolists in the area of product innovations is still possible and likely. The only strategy combination where a less favorable (intermediate) feasibility rating is assigned is combination 2. 1. If extensive contracting in the areas of advertising/promotion and product innovation has considerably lowered the participating firms strategic flexibility, relying on price competition as the sole competitive tool does not appear sensible. Price competition is likely to face a high degree of competitor responsiveness. The third group of strategy combinations, using merger activity to realize collective strategies, has high feasibility ratings throughout.The risk of uncontrolled information disclosure is low, and the number of firms involved in a merger is usually quite small, so that competition within Matching Collective and Competitive Strategies feasibility rating seems appropriate. Again, in this situation firms would maintain competition only in an area where high competitor responsiveness is likely. Combinations of competitive and collective strategies using the various forms of collusion and industry leadership are not as problem-free as the risk evaluation in Table 2 might suggest. Although collusive agreements are not loaded down(p) with the problem of uncontrolled information disclosure, their combination with competitive strategies appears feasible at an intermediate level at best.Since collusive agreements are informal and difficult to enforce, individual firmns have a strong incentive to chisel-that is to increase their shekels by secretly deviating from the agreement (Stigler, 1964). Secret deviations cannot be concealed for long periods of time, and frequently result in collusive conspiracies breaking down and hint off bit ter rivalries such as price wars (Scherer, 1980 Weiss, 1961). It is likely that the lean of collusive agreements towards breakdown will be aggravated if colluding organizations decide to compete in some competitive areas rather than displaying gentlemanly, non-competitive behavior across all competitive dimensions. A firms successful competitive behavior in one area will encourage less successful firms to chisel in other areas that are subject to collusive coordination.Thus combinations of competitive and collective strategies can be expected to be volatile when collusion serves as a means for enforcing collective strategies. This volatility results from the particular characteristics of collusive agreements, and exists regardless of the risk for uncontrolled information disclosure or the level of competitor responsiveness. 383 SUMMARY AND IMPLICATIONS This paper extends the literature advocating the development of voluntary collective strategies as means to manage environmental tu rbulence and interdependence (Astley and Fombrun, 1983a Bresser and Harl, 1986). It assesses the possibilities of combining competitive with collective strategies from the perspective of individual organizations.Such combinations may be problematic because an organizations ability to maintain the secrecy of competitive strategic plans may be jeopardized by information links established through different forms of collective strategy (Fornbrun and Astley, 1983a Starbuck and Nystrom, 1981). After discussing how collective strategies may lead to an uncontrolled disclosure of strategically sensitive information, combinations of competitive and collective strategies are classified according to their varying degrees of feasibility. A comparison of the ratings presented in Tables 2 and 3 makes apparent that the feasibility of strategy combination tends to be inversely related to the risk of uncontrolled information disclosure.If the risk and the feasibility ratings are expressed numerically with the values of low equaling 1, intermediate equaling 2, and high equaling 3, a correlation coefficient can be calculated on the basis of all 42 strategy combinations. The resulting coefficient is r = -0. 70, indicating that within the present classification scheme about 50 percent of the variance in feasibility evaluations is accounted for by the risk of uncontrolled information disclosure. However, high risks of uncontrolled disclosure do not generally lead to low feasibility ratings, and low risks do not necessarily imply high feasibility scores , as is demonstrated by the combinations involving collective strategies based on regulation and collusion respectively.The unexplained variation in feasibility ratings suggests additional factors are important in assessing the feasibility of strategy combinations, notably the degree of competitor responsiveness and the particular characteristics of the type of collective strategy employed. Further variation in feasibility ratings ca n be expected when situational variables such as breadth and quality of information disclosure, asymmetry in interdependence, and event control are considered (Adams, 1976 Pfeffer and Salancik, 1978 Smart and Vertinsky, 1977). This is so because these situational variables can contain or amplify the potential damage resulting from uncontrolled infornmationdisclosure.While situational variables were not considered in the development of this papers typology of strategy combinations, they have implications both for research and managerial decision-making that can originate from the typological classification given in Table 3. The existence of situational variables highlights a feature common to all typologies or organi- 384 R. K. F. Bresser information disclosure is of little relevance? 7. How rapidly and effectively can events of uncontrolled information disclosure be counteracted? Answers to these and similar questions can help executives to apply the information provided by Table 3 situationally before adopting a specific combination of collective and competitive strategies. From this process the selection of harmonious strategies should result.This papers discussion has concentrated on oligopolistic markets because, typically, in such markets competitors are aware of their mutual interdependence, have incomplete control of each others moves, and yet the success of each oligopolists strategic intentions depends considerably on the activities chosen by other competitors (Pennings, 1981). Obviously, within such a context, the damage resulting from an uncontrolled disclosure of sensitive information is potentially high. While the theory of oligopoly has been developed mainly for domestic, nondiversified enterprise (Stigler, 1964), the issues and ideas discussed in this paper can also be of relevance to multinational and diversified corporations. payable to the dominance of oligopolies, both multinational and diversified firms will often examine themselves oper ating in different national or regional oligopolies.Additionally, managing a match between collective and competitive strategies may be more difficult in interindustry and international arenas than in intraindustry environments because the number of interdependent segments representing a particular coporations domain is larger and more complex (Bresser and Harl, 1986 Hawkins and Walter, 1981). Thus, anticipating factors such as the risk of uncontrolled information disclosure and the potential damage resulting from such disclosure may be even more important for multinational and diversified firms than for domestic oligopolists. zational phenomena. Classifications of the type developed in Table 3 are ideal types, based on generalizations derived from common knowledge and common sense (Blau and Scott, 1962 Pugh, Hickson and Hinings, 1969).However, the strategy combinations distinguished represent 42 purloin hypotheses regarding the opportunities and risks organizations might encounter when utilizing competitive and collective strategies side by side. The accuracy of any particular feasibility evaluation is an empirical question open to resolution through historical research, where the mediating role of situational variables has to be included in the research design. From a managerial point of view a typology of strategy combinations with varying levels of feasibility can aid in strategic decision-making. The strategic options evaluated in Table 3 can serve as a guide to managers considering a particular strategy combination. In attempting to extrapolate easibility evaluations, decisionmakers would have to assess whether the variables leading to the feasibility ratings shown in Table 3 are of the assumed magnitude, and to what extent deviations would lead to different feasibility assessments. In addition, decision-makers would have to evaluate the extent to which situational variables require changes in feasibility ratings. For example, a firm intending to imple ment a strategy mix similar to combination 4. 3 would have to consider the following questions before deciding whether the feasibility of such a combination is high 1. 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