In today’s competitive markets, it may seem surprising that rival companies would choose to collaborate—but they do, and often with significant impact. Business collective action (BCA)—the coordinated efforts of competing firms to pursue shared interests—has become a powerful force in shaping industries and society. Whether navigating regulatory challenges, setting technological standards, or addressing climate change and social issues, BCA plays a critical role across sectors. 

Despite its growing influence, research on BCA has been fragmented. This lack of cohesion has made it difficult to understand what motivates competing firms to work together, how they organize these collaborations, and whether they achieve their intended outcomes. 

A new paper on BCA, recently published in the Journal of Management Studies, addresses this gap. Synthesizing decades of scholarly work, the authors offer a unified framework that clarifies the triggers, coordination mechanisms, and consequences of BCA—and what it means for business strategy, policy, and society. 

How Business Collective Action Takes Shape 

BCA can take many forms. While governing bodies such as trade associations, professional bodies, and peak organizations are the most recognized examples, BCA can also emerge through informal consortia, industry ecosystems, board interlocks, and even personal social networks.  

Through these varied structures, BCA enables firms to engage in political coordination (e.g., campaign donations), establish industry standards, legitimize emerging organizational models, foster innovation, and implement private regulation to preempt or complement government intervention. 

What Triggers Collective Action Among Businesses? 

Two primary triggers drive firms to act collectively: institutional and market-based. 

• Institutional triggers include regulatory pressures, activism from stakeholders like social movements, NGOs, and media, or the absence of clear governance (i.e., regulatory voids). 

• Market triggers arise from business dynamics, such as competitive pressures, technological disruption, and the emergence of new markets. In such cases, collaboration is a strategic response to uncertainty and change or a way to realize synergies. 

Power and Politics Inside BCA 

The internal governance of BCA efforts significantly influences their effectiveness. The paper identifies two major governance types: 

• Representative BCA is common among smaller or emerging firms that unite to represent their collective interests. These efforts typically involve relatively equal partners and aim to maintain the status quo. However, their scope and impact are often limited due to the need to accommodate diverse member interests. 

• Controlled BCA, by contrast, is dominated by large, powerful firms or professionalized governing bodies. These arrangements are more common in mature industries and can drive more decisive action. But with concentrated power comes the risk of marginalizing smaller players, creating internal tensions that can undermine effectiveness. 

What Does BCA Achieve? 

The outcomes of BCA can be far-reaching and fall into three categories: 

1. Internal outcomes: These include setting industry standards, fostering technological innovation, implementing safety regulations, and enhancing collective legitimacy or reputation. 

2. External outcomes: BCA can influence legislation directly or indirectly, shape institutional environments, and foster new organizational forms to address shared challenges. 

3. Unintended outcomes: As with any complex coordination effort, BCA can produce unexpected results, such as new industry networks, community trust (or distrust), the formation of collective identities and historical legacies, or the rise and fall of industry clusters. 

A Unified Framework for Understanding BCA 

By systematically examining the triggers, governance structures, and outcomes of BCA, the paper introduces an integrative framework that brings coherence to a previously fragmented field. It offers a shared vocabulary for both scholars and practitioners to better understand the many faces of collective business action—whether market-based or non-market, formal or informal. 

As BCA continues to shape industries and plays an increasingly vital role in addressing global grand challenges—climate change, inequality, human rights, poverty, and labor conditions—understanding how it works, and where it falls short, becomes ever more important. 

This paper lays the foundation for a more robust understanding of BCA, offering valuable insights not only for academics but also for policymakers, industry leaders, and engaged citizens seeking to make sense of how businesses, even in competition, can drive collective change.