Competitive Dynamics in a Financial Crisis: An Attention Based View

Abstract

This study builds on prior theory and research within the Attention Based View (ABV) and competitive dynamics fields by examining changes in the patterns of strategic actions in the context of the recent financial crisis. Past research has examined firm adaptation to significant environmental change, but only in the context of deregulation or strikes rather than a prolonged economic crisis. We posit that during the crisis, managers’ focus of attention will shift thus the issues and resulting answers will result in fundamental changes to prior patterns of strategic actions. Specifically, we find that firms pursue less complex strategies reflected in more limited repertoires of actions, while simultaneously engaging in an increased volume of actions.