Attention Stability, Strategic Stability, and Firm Performance in Hypercompetitive Environments

This study contributes to the attention-based view of the firm by examining the influence of attention stability (i.e., stability of attention allocation to key strategic issues) on firm performance. We investigate the mediating effect that strategic stability (i.e., stability of resource allocation throughout the firm’s strategic profile) has on the process by which attention stability influences firm performance. Using longitudinal data of sample firms from Standard & Poor (S&P) 500, we find that attention stability positively affects strategic stability, and that strategic stability has an inverted U-shaped effect on firm performance in hypercompetitive environments. This mediation effect does not exist for firms in non-hypercompetitive settings.