IF THEY CAN DO IT, WHY NOT US? COMPETITORS AS REFERENCE POINTS FOR JUSTIFYING ESCALATION OF COMMITMENT

• 成果类型: Article
• 署名作者: Hsieh, Kai-Yu; Tsai, Wenpin; Chen, Ming-Jer
• 署名单位: Waseda University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Virginia
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/amj.2011.0869
• 发表日期: 2015
• 页码: 38-58
• 关键词: INSTITUTIONAL INFLUENCES; INTERNATIONAL EXPANSION; Real options; BIG MUDDY; DYNAMICS; BEHAVIOR; Rivalry; FIRMS; CONSEQUENCES; inertia

摘要

This study highlights competitive market conditions as an important structural determinant of escalation of commitment. Bridging escalation behavior literature and competitive dynamics research, we argue that reference to certain rivals may enable or disable decision makers to justify continuing investment in an underperforming initiative, thereby influencing a firm's tendency toward escalating commitment. We test our ideas using data on a set of leading companies in the information technology industry and their investment activities in China. Empirical analysis reveals strong evidence that a firm's escalating tendency is increased by larger competitors' high action volume and smaller competitors' positive performance. In contrast to prior research focus on decision makers' persistence irrespective of external cues, we also find that a firm's escalation behavior is decreased by larger rivals' negative performance.