Search

Evidence suggests that firms often do not respond to competitive attacks even when they are aware of an attack and have the capability to counter it. We believe that this is because they engage in a form of nonresponse that we designate as strategic forbearance, a phenomenon that has been mostly neglected by scholars of competitive dynamics. We view such forbearance as a critical component of competitive strategy – an attempt to situate responses to attacks within a more complex and nuanced strategic, organizational and environmental context. Forbearance, we argue, represents managers’ mindful attempts to transcend reflexive responses by expanding the range of considerations a) beyond an attacker to other stakeholders and rivals, b) beyond the immediate attack to its historical setting and long-term relational implications, and c) beyond unitary tactics to those concerning global strategic coherence and adaptation. We define formally and tentatively operationalize strategic forbearance, before deriving propositions concerning its five general transcending drivers. Ultimately, we believe, the study of forbearance can bring scholars of competitive dynamics closer to the heart of the reflective competitive strategy.

We examine, in hypercompetitive environments, why some firms fail to benefit from competitive aggressiveness while others experience superior profits. We explore the relationship between competitive aggressiveness and performance in a sample of 141 firms from three hypercompetitive industries—personal computers, computer-aided software engineering, and semiconductors—from 1995 to 2006. Contrary to the predominant view within competitive dynamics research, we find that competitive aggressiveness is not a universally effective strategy. For some firms, excessive competitive aggressiveness can escalate costs and diminish performance. Using polynomial regression analysis and response surface methodology, we identify the conditions under which competitive aggressiveness enhances firm performance. Our findings reveal that firms benefit from competitive aggressiveness when they have specialized technological resources and support from a dense network of alliance partners.

We advance competitive dynamics research by introducing alliance portfolio configuration as an important antecedent of competitive action frequency. We propose and test a model for developing effective alliance portfolio configurations that enhance a firm’s ability to discover, conceptualize, and carry out new competitive actions. Our model consists of three overlapping components: (a) opportunity recognition capacity as evidenced by the portfolio attribute of structural holes, (b) opportunity development capacity as indicated by R&D alliance scope, and (c) action execution capacity as exhibited by equity alliances with trusted partners. We hypothesize and find a multiplicative effect of the configuration of all three alliance portfolio attributes on the frequency of competitive actions carried out by 12 large global automobile manufacturing firms with 1,471 unique partners and 37,520 alliances formed over a 16-year period (1988 to 2003). The three-way configuration of portfolio attributes was stronger for more complex competitive actions requiring more time, expertise, and resources to develop and execute.