Abstract
Past research showed how multinational enterprises (MNEs) create specific organizational structures to manage tensions in collaborations with competitors (i.e., coopetition). In this study, we explore how MNEs design their organizational structure to approach tensions specifically in the formation phase of coopetition. Formation is the first and arguably most difficult step in coopetition when tensions are particularly high. Based on an in-depth case study in the agrochemical industry, we find that MNEs create dedicated Coopetition Formation Teams (CFTs), moving within and between their firms to tackle a mix of four paradoxical tension types: performing tensions (conflicting goals), belonging tensions (incompatible values and beliefs), organizing tensions (dysfunctional processes), and learning tensions (conflicts between prior and new knowledge). Separated from the rest of their organization and equipped with unique capabilities to manage conflicts, CFTs combine the separation and integration principles to dynamically address these tensions. However, when paradoxical tensions persist and start to exacerbate, CFTs rely on conciliation by top management as a critical third principle to resolve conflicts. This study is the first to analyze the formation of coopetition between MNEs, proposing an integrated framework that connects the organizational design, the four paradoxical tension types, and the three principles to manage them.