From Cooperation to Competition: Changing Dominant Logics and Legitimization in Liberalizing Industries

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Abstract

This paper explores the transition from logics of cooperation to logics of competition within strategic groups in liberalizing industries. The notion of dominant logic, usually associated with studies of institutional fields, can usefully be applied to the study of interorganizational cognition and legitimacy in the formation of strategic groups in liberalizing industries. Over time, a group dominant logic emerges because of observations and interactions between executives across organizations in the group. These processes serve to maintain the dominant logic of competition in strategic groups over longer periods, until external environmental changes lead to a sufficiently large disconnect between the new reality and the old logic, prompting the emergence of a new logic. As an illustration, within the Nordic postal industry, until the end of the 1990s, cooperation was maintained and competition avoided. However, the subsequent transformation from government agency to government-owned corporations, as well as the gradual liberalization of the European postal market, initiated a transition from logics of cooperation to logics of competition within the strategic group. Then, in 2007, the logic of cooperation within the group was permanently disrupted by the unexpected merger of the Swedish and Danish posts, leading to the creation of a new company, PostNord. This legitimized competition and a new logic focusing on competition in the group emerged during the 2000s and entirely replaced the logics of cooperation in the aftermath of the merger.
Original languageEnglish
Title of host publicationHandbook of Business Legitimacy : Responsibility, Ethics and Society
EditorsJacob Dahl Rendtorff
Place of PublicationCham
PublisherSpringer VS
Publication date2020
Pages1039-1056
ISBN (Print)9783030146214
ISBN (Electronic)9783319688459
DOIs
Publication statusPublished - 2020

Keywords

  • Dominant Logic
  • Liberalization
  • Legitimacy
  • Institutional theory
  • Postal sector

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