Why do High-Status Firms Become Targets of Competitive Attacks? An Examination of Two Explanations

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Competitive dynamics research has often used the AMC framework—awareness, motivation, and capability—when theorizing how different factors influence firms’ proclivities to launch competitive moves against other firms. However, this stream of research has mostly overlooked the role of social evaluations in determining which firms are targeted. We study how a specific form of social evaluation, relative status, impacts motivation to act competitively against other firms. Research is divided on how relative status affects competitive moves. Some research suggests that awareness mediates the relationship between relative status and motivation. Other research suggests that relative status moderates the relationship between awareness and motivation. It is important to resolve the relationship between relative status, awareness, and motivation because it can help firms take actions to lower the likelihood that they will become targets of competitive attacks by other firms. Teasing out the effects of the two competing explanations has been difficult, however, because relative status, attention, and motivation are typically not measured directly. We test both mechanisms in a unique dataset of food trucks in a mid-sized city in the U.S. that allows us to overcome this limitation. We find that high-status food trucks elicit greater competitive motivation from other food trucks primarily due to the greater attention the high-status food trucks garner. Further, we find no support for a moderation effect. Our study helps understand the interplay between awareness and motivation in the context of social evaluations.