Towards a Social-Practice Theory of Competition

Abstract

Competition is central to the field of strategy, yet has rarely been explored from a practice-theoretical perspective. This paper develops a dynamic process framework that illuminates the everyday activities associated with competition and follows these as they unfold temporally across multiple actors transacting on multiple deals. In doing so, it contributes to the strategy-as-practice literature, by explaining how everyday strategizing practices within individual firms constitute collective competitive practices within an industry. The paper draws on a global ethnography of the reinsurance industry. This is a setting which brings the interactions of competitors to the fore as reinsurers together construct collective “consensus” prices for deals, even as they compete with each other for shares of these deals. In particular, we illuminate the positioning and leveraging practices of reinsurers as they compete to construct the price of reinsurance deals and for a share of those deals they find most attractive. We then show the variation and dynamism of the competitive process between multiple actors across multiple deals, explaining these according to different beliefs in diversification and temporally fluctuating capital availability.