Anticipated responses: The positive side of elicited reactions to competitive action

Abstract

This study advances the action-oriented perspective on strategy dynamics. Strategy research suggests that a firm’s profit will decrease when facing rival responses, yet anecdotal evidence indicates that countermoves may enhance its performance. What is the interaction effect of simultaneous negative- and positive-side competitive responses on organisational performance? We propose that the answer depends not only on the actor’s characteristics but also the action’s characteristics. Grounded in empirical facts, our formal model of competitive dynamics examines the possibility of anticipated responses that are deliberately elicited by the attacking firm. We show that against attentive rivals, a firm with high attention and low aggressiveness can utilise visible actions to achieve its strategic intention and deployment. Our study offers significant implications for theory and practice.

Keywords:

• competitive dynamics
• behavioural strategy
• cognition
• system dynamics
• formal theory

Supplementary information accompanies this article on the Journal of the Operational Research Society website (www.palgrave-journals.com/jors)

Supplementary information accompanies this article on the Journal of the Operational Research Society website (www.palgrave-journals.com/jors)

Acknowledgements

We thank the editor and two anonymous referees for their thoughtful suggestions that help improve the paper. We are grateful to Ming-Jer Chen, Kai-Yu Hsieh, Hao-Chieh Lin, and Tieying Yu for providing feedback on earlier drafts of this paper. The work of the corresponding author was supported in part by Research Committee Award and Development Fund Award, Essex Business School, University of Essex.