Competitive Dynamics Perspective Research Articles

Partner Selection in Horizontal Alliance Formation : A Competitive Dynamics Perspective

Partner Selection in Horizontal Alliance Formation : A Competitive Dynamics Perspective

Does rivals' innovation matter? A competitive dynamics perspective on firms' product strategy

We build on the awareness-motivation-capability (AMC) framework of competitive dynamics research to examine how a signal of a rival's innovation, in the form of research and development (R&D) intensity, may influence a focal firm's product actions. We argue that a rival's R&D intensity increases a focal firm's awareness of a competitive threat and thus its motivation to react by increasing its product actions. However, this competitive impact is conditional on the focal firm's size and performance relative to the rival, as well as the strategic homogeneity of the two. We use the AMC framework to analyze such moderating effects.

“Does global sourcing pay-off? A competitive dynamics perspective”

The supposed benefits of global sourcing in supply chain management remain subject to debate. Here this study investigates the potential benefits of global sourcing using a large dataset obtained from a leading European automotive original equipment manufacturer, spanning a period of five years. Contrary to expectations, this study found no evidence that low-wage country sourcing leads to cost reductions relative to sourcing from suppliers based in industrialized countries. However, the data does show that global sourcing induces increased competition within the industrialized country supply base when low-wage country suppliers participate in negotiations. Additionally, a new method for assessing competitive dynamics in supply markets is introduced.

Sex in the Board Room: Board Gender Diversity and Firm Competitive Behavior

Drawing insights from the upper-echelons theory, organizational demography literature and competitive dynamics perspective, we hypothesize a positive relationship between board gender diversity and...

Corporate Venture Capital and Inter-Firm Rivalry: A Competitive Dynamics Perspective

This study considers corporate venture capital (CVC) investments by established firms as a particular form of inter-firm rivalry. Building on the competitive dynamics theory and the CVC literature,...

Firm responses to social movement pressures: A competitive dynamics perspective

Why do firms respond to social movement pressures differently? This study investigates how the strategic motivation of firms, as captured by competitor activity and market dependence, influences the likelihood of their response to social movement demands. We examine this through a longitudinal analysis of wind power adoption by electric utilities in U.S. deregulated markets. We find that when either competitor actions aligned with movement demands or firm dependence on targeted markets increase, the positive effect of movement activism on firm response diminishes. In contrast, as strategic motivation declines, increases in movement activism become more influential at eliciting firm responses. Copyright © 2014 John Wiley & Sons, Ltd.

Competitive Actions under Rival's Attack

This paper examines the effects of two resource-based factors, technological prestige and free cash flow(FCF), on competitive actions under rival's attack. Building on competitive dynamics perspective and resource based view, this study propose that each of two resource- based factors has curvilinear effects on competitive actions, and these effects become strengthened by rival's attacks. The findings support the proposition that when rival's attack is low, each of two resource-based factors has the U-inverted influence on competitive actions. That is, greater resource impedes the competitive actions. When rival's attack is high, it reverses the directionality of the prestige-action relationship into J-shape relationship, and the FCF- action relationship into U-shape relationship. That is, greater prestige is associated with more competitive actions, whereas, low and high levels of FCF enable firms to take more competitive actions.

Firm Responses to Social Movement Pressures:A Competitive Dynamics Perspective

Prior research has documented the influence of social movements on organizational action, but has largely omitted strategic management theory from theoretical and empirical models. This study uses a competitive dynamics lens to investigate the role of awareness, motivation, and capability in the relationship between social movements and firm responses. Empirical analysis of the responses of electric utilities in unregulated markets from 1995 to 2009 reveals that firm size, competitor actions, and prior experience impact the adoption of wind power and the ability of social movement activism to elicit firm responses. Our results provide a more comprehensive model of the dynamics of social movements and firm actions, and suggest the need to adopt a more strategic approach that integrates firm and competitive factors into this line of research.

Does exploration/exploitation action lead to better performance? A Competitive Dynamics Perspective

In this study, the concept of exploration and exploitation is combined with the perspective of competitive dynamics. Moreover, this study investigates how competitive rhythm affects a firmi¦s explo...

Competitive Dynamics: Themes, Trends, and a Prospective Research Platform

We provide a critical retrospective of the competitive dynamics perspective before proposing an integrative research platform for the future. We argue that competitive dynamics can serve as a synth...

Effects of a rival's perceived motives on constructive competition within organizations: A competitive dynamics perspective

Previous work on constructive competition has focused on competitors' motives and strategies; however, competition is an interactive process that is affected by both the competitor and the rival. Based on the competitive dynamics perspective and attribution theory, this study examines the impact of a perceived rival's motives on the constructiveness of competition. The results of a survey of 521 employees from 25 companies in the banking and insurance industry in Taiwan revealed that the perceptions of rivals' motives significantly affected the constructiveness of competition. By introducing the perspective of rival analysis to individual‐level competition, the present study provides a more comprehensive understanding of constructive competition within organizations.

Exploring firm characteristics that differentiate leaders from followers in industry merger waves: a competitive dynamics perspective

AbstractResearch in strategic management has shown that the timing of firm participation in a merger wave matters, as early movers have been shown to outperform later ones. However, while the consequences of the timing of action within a merger wave have been assessed, the causes that drive these timing effects remain unknown. We draw on the competitive dynamics perspective to investigate firm‐level factors that influence the large‐scale strategic behavior of leading or following within industry merger waves. We develop hypotheses based on the competitive dynamics argument that the awareness‐motivation‐capability of firms will influence the timing of competitive action. Consistent with this perspective, we show that a firm's strategic orientation, its structure, and its resource base influence the timing of firm entry in merger waves. Copyright © 2012 John Wiley & Sons, Ltd.

Leveraging IT Capabilities and Competitive Process Capabilities for the Management of Interorganizational Relationship Portfolios

Firms are increasingly dependent on external resources and are establishing portfolios of interorganizational relationships (IRs) to leverage external resources for competitive advantage. However, the systems of information technology (IT) and process capabilities that firms should develop to manage IR portfolios dynamically are not well-understood. In order to theorize how key structural IT capabilities (IT integration and IT reconfiguration) and competitive process capabilities (process alignment, partnering flexibility, and offering flexibility) operate as systems of complements, we draw on the competitive dynamics perspective and resource dependency theory and on the literature for IT business value, interorganizational systems, and interorganizational relationship management. We also theorize how a firm's IR portfolio moderates the effects of structural IT capabilities on competitive process capabilities and why a firm's environmental turbulence moderates the effects of complementary process capabilities on competitive performance. We test our model using survey data from 318 firms in 4 industries. Our results provide broad support for the following: (1) structural IT capabilities and process capabilities operating as a system of complements, (2) the effects of structural IT capabilities on competitive process capabilities being contingent on IR portfolio concentration, and (3) the effects of complementary process capabilities on competitive performance being contingent on environmental turbulence. We discuss the theoretical and practical implications of how firms should develop complementary systems of structural IT capabilities and competitive process capabilities to manage IR portfolios dynamically and leverage external resources.

The linkage between IOS use and competitive action: a competitive dynamics perspective

The use of interorganizational systems (IOS) for competitive advantage has been the topic of much writing and research. As a successful example, American Airlines’ aggressive use of its computer-based reservation system, SABRE, has often been cited for improving operational efficiency, increasing organizational flexibility, and altering interorganizational relationships. Yet, little attention has been given to a series of competitive actions that were generated through the use of SABRE along this system’s evolutionary trajectory. These competitive actions enabled American to disrupt competitive forces and remain as a market leader in the airline industry for decades. Stimulated by American’s case and today’s widespread use of IOS, this study asks two interesting questions: “Is there a systematic link between IOS use and competitive action?” “If so, how do they relate to each other?” In addressing these questions, we adopt research from the field of competitive dynamics to examine roles of IOS in influencing firm behavior and resultant firm performance. Competitive dynamics research has shown robust relationships between measures of competitive action and firm competitiveness, but technological antecedents of competitive action have been little studied. Collecting and analyzing 12 months of data for the year 2003 from multiple secondary data sources, this study empirically investigates links between IOS uses and competitive actions for nine major sports car makers. Our findings suggest a strong link between IOS uses and competitive actions. Also, there are larger implications for information technology (IT) researchers. The novel adoption of competitive dynamics suggests the development of a new kind of IT value measure, going beyond limitations of traditional measures by recognizing competitive actions as specific moves that are first observed after undertaking initiatives aimed at enhancing competitiveness. Additional implications for IT research, methodology, and practice are discussed.

Multimarket Contact and Resource Dissimilarity: A Competitive Dynamics Perspective

Does the competitive dynamics perspective support the mutual forbearance (Edwards, 1955) and resource dissimilarity (Caves & Porter, 1977) theories of competitive behavior? This research examines competitive behavior in the U.S. software industry and finds: (1) as multimarket contact increases, a firm moves less frequently but more quickly following the moves of rivals; (2) as a firm’s resources are more dissimilar relative to rivals, it becomes more rivalrous along both action and timing dimensions of competitive behavior; and, (3) the influence of multimarket contact on firm-level action is most influential for firms whose resources are more dissimilar relative to rivals, but its influence on a firm’s time to move is most influential for firms whose resources are more similar relative to rivals. Thus, the dynamic perspective generally supports, but goes beyond, the insights of the established mutual forbearance and resource dissimilarity theories.

Multimarket contact and resource dissimilarity: a competitive dynamics perspective

Does the competitive dynamics perspective support the mutual forbearance (Edwards, 1955) and resource dissimilarity (Caves & Porter, 1977) theories of competitive behavior? This research examines competitive behavior in the U.S. software industry and finds: (1) as multimarket contact increases, a firm moves less frequently but more quickly following the moves of rivals; (2) as a firm’s resources are more dissimilar relative to rivals, it becomes more rivalrous along both action and timing dimensions of competitive behavior; and, (3) the influence of multimarket contact on firm-level action is most influential for firms whose resources are more dissimilar relative to rivals, but its influence on a firm’s time to move is most influential for firms whose resources are more similar relative to rivals. Thus, the dynamic perspective generally supports, but goes beyond, the insights of the established mutual forbearance and resource dissimilarity theories.

The Reputational Penalty Firms Bear from Committing Criminal Fraud

Introduction Optimal penalties for corporate fraud require that firms face expected penalties equal to the total social costs of the crime. Yet formal courtimposed sanctions for committing fraud often represent a small fraction of the damage produced by the fraud. Sheer and Ho (1989), for example, estimate that the median and mean ratios of criminal fines to the private loss from private fraud were 0.14 and 0.73 in 1988. The corresponding median and mean ratios for government procurement fraud were 0.29 and 1.60. Including criminal restitution raises the median dollar sanction-to-loss ratio for private fraud to 0.84 and for government procurement fraud to 0.68. These ratios are for private parties convicted of fraud. The ratio of the expected court-imposed penalty to the social cost of the fraud is undoubtedly smaller. Particularly when compared to other crimes such as environmental pollution, where the median ratio of criminal fines to private loss is 3.71, the penalty for fraud seems surprisingly low. The perceived underpunishment of corporate frauds has recently affected public policy. Reflecting popular opinion that existing penalties were too low, the US Sentencing Commission – the federal agency responsible for setting the penalty guidelines used by judges – established corporate sentencing guidelines in 1991 that raised median corporate fraud penalties by over twentyfold. This article criticises the conventional wisdom about corporate fraud in two ways. First, we explain that the typical optimal criminal penalty for private corporate fraud is small because the external effects of such frauds are usually small. An increase in criminal penalties for corporate fraud can do more harm than good because it encourages the substitution of criminal penalties for reputation as a mechanism to police fraudulent behaviour.