The Consequences of a Third Party Decision on Coopetition Strategies: The Case of the International Accounting Standard-Setting Process

Introduction

The past global economic crisis highlighted the impact of the accounting standards on the evaluation of firm performance. In such a context, the type of standards companies use became increasingly critical. Both the FASB¹ and the IASB² are two of the most important standard-setting bodies, responsible for accounting standardization in the world, each one developing its own set of standards: the US GAAPs³ (Bengtsson and Kock, 2000), the role of the third-party can be emergent and unintentionally o collaborate. The coopetition and the IFRSs⁴. The economic and financial globalization pointed out the need for global accounting standards. As an answer to this issue those institutions, previously acting as competitors, began to collaborate and worked on a convergence project in order to develop a single set of high quality global accounting standards. From a strategic point of view, this evolution is analysed as coopetition (Brandenburger & Nalebuff, 1996).

Globalisation and the technology race encourage firms to adopt coopetition strategies, i.e., simultaneous collaboration and competition (Brandenburger & Nalebuff, 1996; Bengtsson & Kock, 2000; Gnyawali & Park, 2011; Yami et al., 2010). Coopetition strategies may be a direct relationship between firms or may involve a third-party such as a client, an institution, a union, the government, etc. (Bengtsson & Kock, 2000; Freel, 2003; Rindfleisch & Moorman, 2003; Eriksson et al., 2008; Depeyre & Dumez, 2010; Castaldo et al., 2010). A common vision appeared in the literature about the roles played by the third party. First, the third party is considered as an initiator of a coopetition strategy (Depeyre & Dumez, 2010; Castaldo et al., 2010). Second, the third party is entrusted to manage collaboration to ensure the success of a coopetitive strategy (Bengtsson & Kock, 2000; Rindfleisch & Moorman, 2003).

However, the consequences of the involvement of a third-party in a coopetition strategy remain unexplored. Thus, our research aims to answer the following questions: what are the consequences of the involvement of a third-party in a coopetition strategy on the partners and their relationship?

In order to provide insights on this question, we conducted an exploratory longitudinal case study of coopetition dynamics between two main accounting standard-setters the FASB and the IASB. The longitudinal study allows us to highlight the macro drivers of coopetition strategies over time. Developing global accounting standards useful for worldwide companies is a challenging and competitive activity that led two important standard-setters to collaborate, whereas they remained competitors to some extent. While most of previous studies focused their attention on worldwide companies (Gnyawali & Park, 2011; Fernandez et al., 2014) or between SMEs⁵ (Gnyawali & Park, 2009), in this study we show that institutions represent relevant and appropriate empirical background to investigate coopetition strategies.

Our findings confirmed that coopetition strategies between institutions are driven by multiple macro drivers. In line with previous studies, we confirmed the important role of economic, structural and institutional drivers. We also evidenced the key role of the third-party in coopetition dynamics.