D Uribe, J., Sytch, M., and Kim, Y. H. (2019). “When friends become foes: Collaboration as a catalyst for conflict.’ Administrative Science Quarterly.
Background & Theory:
Research on social embeddedness suggests that past cooperation with conflicting parties leads to more favorable outcomes. However, in certain instances, the presence of loyalty concerns and other dynamics can lead to unfavorable outcomes for parties. This study examines how the role of historic collaboration can hinder the effectiveness of two-party conflict resolution.
Research was completed to answer the following questions:
- Is a history of past collaboration between opposing agents associated with increased conflict when they have engaged in past conflict?
- Does the presence of history of past conflict between opposing agents in collaboration with one another lead to worse economic outcomes for both parties?
Data were collected in the context of intellectual property (IP) disputes between corporate clients who were represented in litigation by external legal counsel, which is an environment where previous conflict between clients is present. The sample included 4,913 cases, involving 11,206 unique corporate plaintiffs and defendants, as well as 21,757 external lawyers. Researchers used “escalation to trial” and “case duration” as dependent variables to capture conflict escalation. To test the economics question, researchers used the Eventus system to investigate how case terminations affect company stock prices. Various independent and control variables were also utilized to assist the measure of collaboration prior to litigation and to ensure robust results.
The results of this study indicated that when past collaboration with a rival invokes loyalty concerns, parties may respond with uncooperative compensatory behaviors that demonstrate psychological distance from the other party. These compensatory behaviors lead to the impediment of cooperative interaction, escalation of conflict, and often results in lost value. In the case of IP litigation in this study, past collaboration between the opposing parties can pressure lawyers to manage a balance between client loyalty impressions and an image of a zealous reputation. This often results in compensatory behaviors that reduce cooperation, leading to a longer litigation process and lost economic value for clients. This being said, this study suggests that keeping in mind the historical loyalty implications between the parties can offer a more comprehensive analysis of future interactions. Additionally, the presence of adversarial opponents in collaboration with the other party tended to destroy stock value for clients.
What We Can Learn:
Looking over this research, we can take away this key insight:
- In some circumstances, past collaboration can result in future conflict. The presence of loyalty concerns among parties can make them take on adverse behavior to prove loyalty to their client or organization. This results in uncooperative behavior across the board and often leads to unfavorable economic outcomes.
For Consultants: When mediating or engaging with opposing parties, it may be helpful to consider the role loyalty concerns and compensatory strategies can play in leading to uncooperative behavior and frequent disagreement.
For Everyone: Even though past cooperation sets an expectation of future cooperation, it does not necessarily mean conflict will not occur. It’s important to recognize that there are many elements that are based on past cooperation that can lead to conflict.