Scale matters: The scale of environmental issues in corporate collective actions

Research Summary: Much of the research on corporate collective action to manage common pool resources is focused on coordinated actions, such as voluntary programs, rather than collaborative actions, such as technology sharing. In this article, we examine inductively the collective actions taken by a consortium of 12 oil sands companies to address three environmental issues of different scale. We identified a set of organizing rules that determined whether the relationship among industry members would be collaborative or competitive, and found that the organizing rules for collaborative collective action were more effective for smaller scale issues (i.e., tailings ponds and water) than the larger scale issue (i.e., greenhouse gas emissions). Our findings contribute to research on the competitive dynamics of collaborating with competitors and on industry self-regulation. Managerial Summary: Many environmental issues, such as climate change, water quality, and contaminated land, are caused by the overexploitation of commonly shared natural resources. Firms will often overuse resources because their cost of use is less than the benefit that accrues. In Alberta's oil sands, 12 of the major oil sands operators, all competitors, have agreed to collaborate by sharing technology, which goes against the received wisdom of competition. This multiparty collaboration among competitors, while still relatively rare, is becoming increasingly commonplace. In this article, we outline the rules that allow this collaboration to flourish. Our most important finding is that the rules are shaped by the scale of the issue being managed, not the size of the collaboration.