Book Notes - Nicolas Hatzfeld (1)

Inter-firm cooperation: theoretical approaches and applications in the case of co-development in the automobile industry

Lydie Laigle, using Renault as a case, analyses an aspect of the transformation of subcontracting relations, which has been developing since the end of the 1980's among most European automobile manufacturers. They have transferred part of their study activities to certain equipment suppliers, so as to share a part of the risks, the time and the cost that the studies entail, to devote themselves more to advanced research and to drawing up schedules of conditions. Therefore they have to manage the process-production of study, associating a large number of companies which have to adapt their actions to each other as well as to the demands of the clients, and who are trying to defend their own economic interests.

The forms of transformation which are emerging are characterized by: 1) a growing temporality, which encompasses the development of a product; 2) uncertainties about the result of the cooperation, which extend to the economic and technical results of the new product, and to its final commercial end; 3) special dynamics between partners: future trade conditions are anticipated and contractualized even before the product study starts. In this case, it is the credibility of initial commitments and of the measures taken for dialogue, the quality of the compromises reached between partners during the development phase which determine the quality of the final cooperation.

Several points emerge from the current evolution:

- Co-development must take market uncertainties into account, which risks destabilizing initial compromises between partners: the modifications which are taking place imply management forms involving cost objectives, the evaluation of risk, the research procedures of the compromises and the development of new products;
-The strategy of suppliers depends on the extent to which they are involved. The lower ranking suppliers try to preserve their margins: its a parallel development. The highest ranking suppliers have greater scope for re-using development results. They are more disposed to interactive development, which demands an investment in organization and transaction which can turn out to be profitable to all the partners; it leads the manufacturer to push the competition of suppliers further up the line;
- Co-development shakes up the classic representations of inter-company relations. Their capacity to cooperate depends on their aptitude to carry through within and between themselves the process of learning which is both technical and relational, that is to say qualitative aspects which are at the basis of the collective reduction of costs and the modes of dividing profits. Cooperation tends to bring together the models of organization, the study and decision process , to go beyond the company: the organization spreads into the network of companies, and the market goes as far as the phases of innovation.

The formation of such networks of companies can bring economic efficiency. But it raises new questions about the development of the relations between manufacturers, equipment suppliers and subcontractors...