UNDERSTANDING WORD RESPONSES IN COMPETITIVE DYNAMICS

We explore the role of word responses in the competitive engagements of rival firms. Different from action responses, word responses are language issued by a firm in public forums and in response to a rival's attack. We challenge an implicit assumption in extant competitive dynamics research that firms do nothing if they do not respond to attacks with actions. Drawing from the three drivers of competitive response (awareness, motivation, and capability), we build a framework to theorize why firms sometimes use actions, sometimes use words, and sometimes use both in response to a rival's attack. By placing two frequently studied characteristics of attacks (attack magnitude and attack complexity) in a 2 × 2 matrix, we predict that word responses are more likely when attacks are not of low magnitude and low complexity. By integrating word responses into the traditional action-response perspective, we hope to develop a more complete understanding of competitive engagement among rival firms.