Competitive conformity effects on performance: Entrepreneurship and radicality in firms' competitive profiles

This dissertation examined the effects on firm performance of severe deviations from competitive conformity. Moderate departures from industry norms represent entrepreneurial opportunities for firms. More severe departures invoke institutional sanctions and strain technical rationalization. The actions and responses of U.S. airlines in two separate regulatory regimes (regulated—1970–1975; de-regulated—1993–1998) were analyzed to construct yearly competitive profiles for each firm. The degree to which an airline's competitive profile deviated from the average competitive profile of other firms in its competitive group constituted competitive non-conformity.; As hypothesized, the competitive non-conformity-performance relationship was an inverted U-shaped curve, suggesting that first-mover advantages do indeed accrue to firms that deviate from the norm in their competitive profiles, but only up to a point. Beyond that point, more severe levels of competitive non-conformity led to a reduction in firm performance. This finding was consistent across regulatory regimes.; Certain factors were found to moderate the competitive non-conformity-performance relationship. Contrary to the hypothesized direction, firm age interacts negatively with competitive non-conformity to predict firm performance in the de-regulation era sample. As expected, firm reputation interacted positively with competitive non-conformity to predict firm performance. Contrary to the hypothesized direction, absorbed slack interacted negatively with competitive non-conformity to predict performance. Also contrary to the direction hypothesized, group rivalry and group global operations both interacted negatively with competitive non-conformity in predicting firm performance.; The results of the study suggest that managers should pursue entrepreneurship in their competitive profiles with an understanding that first-mover advantages only extend so far. A greater understanding of the firm's “systemic” elements will help to ensure that key stakeholders are not confused and technical operations are not overly strained by a firm's actions.