WALTER J. FERRIER University of Kentucky
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Transcript of WALTER J. FERRIER University of Kentucky
WALTER J. FERRIERUniversity of Kentucky
Competitive Dynamics: Evaluation, Evolution, and Future Direction
What is Competitive Dynamics?Where is it headed? …a paradigm? …a theory? …a pre-theory? …a view? …a reasoning? …a lens? …a method?
– Research design element– Observational mechanism– Measurement technique
Integrated/Contributing Theories Info processing Social networks Managerial cognition Multi-market competition Prospect/Threat rigidity First-mover Institutional theory Complexity Communication Knowledge Signaling
Resource-based view Real option theory Game theory Strategic groups Structure-conduct-perform. Dynamic limit pricing Austrian economics Corporate entrepreneurship Dominant firm/Oligopoly Force field (from psychology) Population ecology
What do they explain?– Competitive behavior?– …its antecedents, contexts?– …processes?
Does competitive dynamics enable these other theories explain, observe, conceptualize, measure:– “behavior”– “competition”– “events”– “dynamic interactive processes”– “change”– other things?
Integrated/Contributing Theories
Actor relativity/interdependence• The firm relative to:
– Itself (over time)– Dyadic partners– Groups– Industry members– Other non-rivals
• On factors/dimensions such as:– Competitive actions– Resources/capabilities– Firm characteristics– Outcomes
A Pre-Theory of Competitive Inter-Action:Some Boundary Conditions
Dynamic• Explicitly accounts for:
– Time– Change– Evolution– Contingencies– Processes
Pre-Theory of Competitive Inter-Action
Has impact/consequences on:• Performance
– Relative– Absolute
• Behavior of other firms• Supply chain members
– Customers– Suppliers
• Regulators• Investors• Society
Pre-Theory of Competitive Inter-Action
Other• Uncertainty, unknowability• Imperfect information• Thought, intent, purpose• Not costless
Pre-Theory of Competitive Inter-Action
Awareness• Alertness• Vision• Scanning• Filtering
Motivation• Intention• Valence• Emotion
Ability• Organizational enablers/constraints• Contextual enablers/constraints
Theoretical Scaffolding/Fulcrum
Theoretical Integration Required:“Other theories” supportand explain logic when integrated with this AMA theoretical scaffolding – e.g.:• TMT demographics• Institutional theory• Social network theory• RBV
Awareness
Motivation Ab
ility
Firm 1Strategy
Firm 2Strategy
CompetitiveInter-Action
OrganizationalDrivers
Industry StructureDrivers
InstitutionalDrivers
Socio-Relational
Drivers
Other?
Perf
CognitiveDrivers
Pre-Theory of Competitive Inter-Action
Q: What is an action? A: “An externally-directed, observable competitive move ….” Resource-action “cloud chamber” (Barney, 1994)
OrganizationalRoutines/Culture
Knowledge/Technology
Reputation/Image/ Brand
Leadership
Marketing
Price Product
Distribution
The Competitive Marketplace
Levels of Analysis
Firm Dyad Triad
GroupNetwork Industry(or Population)
Wal-Mart
Sears
Macy’s
Macy’s
Penny’s
Wal-Mart Sears Wal-Mart Sears
Wal-Mart
Target
Wal-Mart
K-Mart
Sak’sNordstrom
Sear’s
Macy’s
Penny’s
Wal-Mart
K-Mart
Sak’sNordstrom
Sear’s
Macy’s
Penny’s
Target
Levels of Aggregation
Mkt
Mkt
Prod
Price
Mkt
Mkt Price
Prod Price
Individual Action(or response)
Action-ResponseDyad
CompetitiveRepertoire
6 × Price
1 × Prod
4 × Mkt
2 × Signaling
1 × Legal
Competitive Attack
Signal LegalPriceBoeing
Airbus
time
Prod
attack
counter attack
Potential/Challenging Avenues for Future Research
Network embeddedness Cognition Decision-making Resource/capabilities
Network Evolution, Competitive Actions and Performance
MktMkt Prod PriceMkt Mkt PriceProd Price
FocalFirm
A
B
C
DE
t1 t2 t3
FocalFirm
A
B
CFocalFirm
A
B
Performance
time
Cognitive/Emotional/Personality-basedDrivers of Competitive Inter-Action
Research Question
How the interaction of information and CEO/TMT traits, beliefs, experiences, perceptions, and/or emotions gives rise to patterns of competitive inter-action.
Level of Analysis
1. CEO & TMT members; Focal firm competitive strategy; Rivals’ competitive strategy
2. Experimental subjects (simulation; Chess players, boxers)
Theory Managerial cognition; Emotion; Personality; Information processing; Neurology
Constructs Cognitive breadth; Decision stress; Revenge orientation; Need for achievement; Apathy-action orientation
Data
1. CEO personality traits; Coded video of top-level meetings; Face-recognition technology
2. Brain scans of decision-makers3. Competitive actions
Strategic Decision-making Drivers of Competitive Inter-Action
Research Question
How the inputs and processes of decision-making gives rise to patterns of competitive inter-action.
Level of Analysis
1. CEO & TMT members; Focal firm competitive strategy; Rivals’ competitive strategy
2. Experimental simulation participants
TheorySocial identity theory; Group interaction theory; Dialectical inquiry/devil’s advocacy; Power; Culture; Information processing
ConstructsDecision comprehensiveness, quality, complexity, speed; Strategic consensus; Power dispersion; Positive/negative affect; TMT heterogeneity; Agreement-seeking behavior;
Data
1. CEO/TMT demographics; Questionnaires; Coded video of top-level meetings; Recording devices/microphones attached to decision-makers
2. Experimental decision challenges with task, group membership, and/or decision process manipulations
Capabilities and Actions:Competitive “Spectroscopy”
OrganizationalRoutines/Culture
Knowledge/Technology
Reputation/Image/ Brand
Leadership
MktPrice Product
Competitive Forces
ActualPerformance
IntendedTarget
What is the next “big thing”?
Phenomena Constructs Measures Levels of analysis or aggregation Data Unobservables Analytical techniques Theory
Non-Organizational/Economic Theories Physics
• Physical• Optical• Quantum mechanics
Biology• Molecular/DNA• Virology
Medicine• Neurology• Psychiatry• Kinesiology
Music• Perception/appreciation• Composition theory
Experimental Aesthetics• Perception• Interpretation• Subjective judgment
What is Competitive Dynamics?
Coaching a basketball game Training a hunting dog Conversation/argument
between husband & wife
Phenomenon
A Z
K
time
Rivalry: Airbus vs. Boeing Negotiating a raise Writing an operatic duet
Competitive Dynamics:Instrumentality and Application
An (any?) open-system process that: Is interactive
– Contains multiple actors– Behavior and outcomes relative among actors
Contains distinct, observable elements, events, or happenings
Contains some perceptual and actual uncertainty or unknowability
Requires some thought, intent, purposefulness on behalf of actors
Is not costless
Your comments and conclusions?
Unresolved issues?