Resource Utilization and Competitive Behaviors: The Moderating Effect of CEO Attention

Recent CEO research has moved beyond simple demographics studies to investigate the influence of attention focus of CEOs. Although this line of research is gaining some traction, two theoretical limitations are seen in the current literature. First, research has not identified the crucial underlying mechanisms that unpack the micro to macro process, i.e., how CEO attention (a micro construct) translates into organizational outcomes (macro constructs). Second, research has focused primarily on what CEOs attend to but neglects how CEOs attend. To extend the literature, we develop a model that integrates the concepts of resource utilization and CEO attention and examines how CEO attention structure may facilitate or constrain a firm’s ability to effectively utilize resources to compete in a hypercompetitive market. We used the U.S. software and IT services industry as our empirical setting. The results show that: (1) firms compete less aggressively when their CEOs attend to a broader and more diverse set of information; and (2) firms use competitive actions that deviate from industry norms when their CEOs attend to a unique set of information in the environment.