Walter J. Ferrier

The Role of Competitive Action in Market Share Erosion and Industry Dethronement: A Study of Industry Leaders and Challengers

Market share erosion and dethronement of market leaders are examined through the lens of “Austrian” economics. Our results suggest that leaders are more likely to experience market share erosion and/or dethronement when—relative to industry challengers—they are less competitively aggressive, carry out simpler repertoires of actions, and carry out competitive actions more slowly. These findings, based on seven years of data collected in 41 industries, contribute to research on hypercompetition, organizational decline, and competitive dynamics.

Navigating the Competitive Landscape: The Drivers and Consequences of Competitive Aggressiveness

By defining strategy as a sequence of competitive actions carried out over time, I develop and test a dynamic process model of competitive interaction among firms. Results based on a sample of thou...

Birds of a Feather...? How Supervisor-Subordinate Dissimilarity Moderates the Influence of Supervisor Behaviors on Workplace Attitudes

This study explored the moderating role of subordinate-supervisor demographic dissimilarity on the relationship between supervisor behaviors and employee outcomes among a sample of middle- and upper-level managers working in Japanese-owned firms in the United States. As predicted, demographic dissimilarity moderated the relationship between supervisory behaviors and trust and organizational commitment such that the relationships were stronger under conditions of demographic dissimilarity. Implications of the results for demography research and suggestions for future research are addressed.

Racial Diversity and Firm Performance The Mediating Role of Competitive Intensity

The authors examine the mediating role of competitive intensity in the relationship between managerial racial diversity and firm performance (i.e., market share gain and average stock return). Racial diversity relates to firm performance via firms’ capacity to compete intensively (i.e., to introduce new competitive actions frequently). An analysis reveals that environmental munificence moderates competitive intensity’s mediating effect: Racially diverse management groups compete more intensively and perform better when they compete in munificent environments. The authors also find support for a moderated mediation model that simultaneously tests all components of their framework.

Alliance Portfolio Configurations and Competitive Action Frequency

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.

The effect of national culture on partner buyouts in cross-border biotechnology alliances

Abstract This study examines how national culture influences the likelihood and rate of buyouts among R&D equity alliances and joint ventures in the biotechnology industry. We hypothesize that the interaction of specific national culture attributes and cultural differences between alliance partners have an impact on: (1) the amount of endogenous uncertainty surrounding the potential integration of the target firm and (2) the marginal rate of learning in hierarchical versus collaborative governance. Applying a competing hazard model to a sample of 173 joint ventures and minority equity collaborations in the biotechnology industry, we found that investing firms from high power distance and high uncertainty avoidance countries are more likely to buy out their alliance partners. Furthermore, greater cultural distance between alliance partners increases the likelihood of partner buyout when investing firms are from high power distance countries.

Call for Papers---Information Systems Research Special Issue: Digital Systems and Competition

Focus Digital systems within and across firm boundaries have become fundamental to business operations, spanning multiple activities in value and supply chains. As firms continue to digitize business pro cesses and enhance capabilities via more powerful computing platforms, they are better able to access and process critical knowledge in real time, increas ing awareness of emerging market opportunities, and the ability to respond to those opportunities. Business actions are becoming inseparable from information technology (IT), either IT-enabled or -induced. Conse quently, digital systems and IT are becoming critical to many products and services, and thereby indistin guishable from the rest of the business. There is a pressing need to develop a more expansive view of the relationship between digital systems and compet itive action.

Rivals’ reactions to mergers and acquisitions

Mergers and acquisitions research has principally focused on attributes of the acquiring firm and post-acquisition outcomes. To extend our knowledge, we focus on external factors, in particular rival responses, and explore when and how rivals respond to their competitor’s acquisitions. Leveraging the awareness–motivation–capability framework, we predict and find evidence that a rival’s dependence on markets in common with the acquirer, resource similarity between rival and acquirer, and a rival’s organizational slack increase the volume and, in some cases, also the complexity of a rival’s competitive actions following an acquisition. Furthermore, the type of acquisition positively moderates some of these relationships. The results extend our understanding of the influence of mergers and acquisitions on competitive dynamics in the marketplace.

Does It Pay to Compete Aggressively? Contingent Roles of Internal and External Resources

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.

Organizational speed as a dynamic capability: Toward a holistic perspective:

Current research on organizational speed has been disjointed, which has left organizational speed as an underdeveloped area of study. In this essay, we expand the view of organizational speed as a multidimensional gestalt-like construct that may influence firm performance and competitive advantage. We offer a capability-based definition of organizational speed and identify and review the building blocks of organizational speed. We propose new avenues and questions for future research based on our perspective.