How Firms Cooperate in Business Groups? Evidence from Poland

Abstract

Purpose: The study aims to identify the main directions of intragroup cooperation, along with crucial areas of cooperation in business groups, and develops theoretical models of cooperation in a business group.

Methodology: The qualitative approach is applied in the study that is based on the cross-case analysis of four business groups operating in Poland.

Findings: Results indicate that business groups cooperate mainly vertically (cooperation between the core company and affiliates) in operations. Horizontal (among affiliates) and vertical cooperation in other areas – marketing, R&D, finance, and human resources – are not so intense. The study enables us to propose a theoretical framework of cooperation models in business groups based on two dimensions – the direction of cooperation and the number of cooperation areas. It leads to the identification of four models: two-sided loose cooperation, two-sided tight cooperation, multi-sided loose cooperation, and multi-sided tight cooperation.

Implications: Identification of main directions of cooperation in business groups, along with areas of cooperation have implications for both researchers and managers. Findings of the study and the theoretical framework of cooperation models in business groups can be used as a basis for the further theoretical exploration of the organization and functioning of business groups in the economy and a strategic decision guideline for managers.

Originality: The literature focuses mainly on the interorganizational cooperation between dispersedly owned standalone entities. Studies on intraorganizational cooperation in business groups are limited. The study aims to provide a better understanding of cooperation between entities in business groups.