Interfirm Cooperation and Customer Orientation

Abstract

This article examines the implications of interfirm cooperation for a firm's level of customer orientation. Drawing on research in marketing, organizational theory, and economics, the authors suggest that firms engaged in cooperative alliances with competitors will become less customer oriented over time. Using longitudinal survey data, the authors find that firms in alliances dominated by competitors experience a significant decrease in their level of customer orientation. In contrast, the authors do not observe this type of decrease for firms in alliances dominated by channel members. Moreover, the authors find that both behavioral and structural mechanisms influence the relationship between alliance type and customer orientation. Behaviorally, firms in competitor-dominated alliances with weak relational ties with their collaborators exhibit a greater decrease in customer orientation compared with firms with strong ties with their collaborators. Structurally, firms that collaborate with competitors in alliances with a third-party monitor, such as a government agency, experience a smaller decrease in customer orientation than firms in alliances without such a monitor.