Coordination and cooperation (Value Shop)

Question 1

How do we solve problems?

Answer 1

1. Formulate the problem
A. Find the problem
B. Frame the problem
C. Formulate the problem
2. Solve the problem
3. Implement the solution
4. Operate the implemented solution
5. Control and evaluate

Question 2

Cooperation problems (Knowledge appropriation hazard)

Answer 2

Temptation to hoard and refrain from sharing knowledge.

Knowledge is difficult to price, but easy to share and reproduce at zero margin cost.

Question 3

Cooperation problems (Knowledge accumulation hazard)

Answer 3

Temptation to influence search directions opportunistically in the hope of accumulating solutions and new knowledge that complement existing knowledge and strategic interest.

Parties has strategic interests in what knowledge is generated and what solution is implemented.

Question 4

Cooperation problems (Adaption problems)

Answer 4

Temptation to exploit unexpected situations to their own advantage by inflexibility without considering how such actions undermine joint value creation.

Parties do not know beforehand what formulations and solutions will be found, and they have strategic interest in what solution is implemented.

Question 5

Coordination problems (Heterogenous information problem)

Answer 5

Difficulties for senders of information to determine what unique information to share, and difficulties for receivers of unique information to recognize its relevanse.

Different individuals have different information.

Question 6

Coordination problems (Representational gaps problem)

Answer 6

Difficulties of sharing and recombining the parties’ problem representations and thus to create collective problem formulations and later search collective heuristics to coordinate search trials

Question 7

Key takeaway: match problem solving complexity with appropriate levels of cross-understanding and relational contracting

Answer 7

Relational contracting/ Cross-understanding:

1. Low-Low: The parties are incapable of responding to higher levels of problem solving complexity.
2. Low-High: As problem solving complexity increases, the parties have the potential to find valuable solutions, but conflicts and opportunistic behavior erode (gradually destroy) performance.
3. High-Low: As problem complexity increases, misunderstandings, mistakes, confusion, and lacking ability to find high-value solutions to problems erode performance.
4. High-High: As problem complexity increases, the parties are able to solve both the coordination problems and cooperation problems resulting from joint search efforts.

Question 8

What is cooperation?

Answer 8

Joint pursuit of agreed-on goal(s) in a manner corresponding to a shared understanding about contributions and payoffs.

Cooperation is a behavioral outcome of variable quality (cooperative to uncooperative – e.g., opportunistic) that relies on partners’ agreement about the provision and appropriation of resources for the collaborative effort.

Question 9

What is coordination?

Answer 9

Despite best intentions, partners may find it difficult to efficiently combine the resources they bring to the table, to synchronize their actions, or to realize the planned payoffs.

All alliances face coordination challenges, since by definition they involve some division of labor and thus some task interdependence among partners.