Unpacking the Black Box in Coopetitive Innovation Projects: The Dynamics of Organizational Capability Development for Successful System Integration

Abstract

Complex projects often require firms to develop interdependent components, but no single firm possesses all the necessary expertise. As a result, firms engage in coopetitive collaborations to gain access to the complementary and compatible knowledge that is necessary for integrating such complex projects. However, system integration presents challenges, as firms must ensure compatibility between subsystems without being fully visible in each other’s designs. This study examines the organizational capabilities required to navigate this dilemma, breaking them down into structural components (narrow vs. broad), interaction styles (competitive vs. cooperative), and governance rules (formal vs. informal). To explore this issue, this study conducts a longitudinal case analysis of the Meteorological Third Generation (MTG) project, a European space industry initiative involving two competing firms, Thales Alenia Space and OHB Systems. The project faced significant challenges, including system integration failures, cost overruns, and delays, primarily due to difficulties in aligning subsystems and managing knowledge exchange. This study examines how these firms developed and adjusted their organizational capabilities over time to address these integration challenges.

Keywords: Coopetition, Innovation Projects, Organizational Capabilities, System Integration, Case study