CEO vigilance and hypercompetition: CEO attention in resource utilization and firm competitive aggressiveness

Abstract

PurposeBy integrating perspectives from the resource-based view, attention-based view, upper echelon theory and competitive dynamics (CD), the authors seek to understand how chief executive officer (CEO) vigilance influences the way resources are utilized in relation to competitive behavior.Design/methodology/approachThis study's empirical analysis is conducted using a longitudinal design in the US software and IT services industry with a final sample consisting of 44 publicly traded firms and 471 firm-year observations from 1995 to 2009. The authors respectively use the fixed-effects negative binomial model and generalized estimating equation (GEE) model to test the effects of technology resource breadth on competitive intensity and competitive deviance and the interacting effects with CEO attention broadness and uniqueness.FindingsThis study's results show that CEO vigilance (attention broadness and uniqueness) interacts with technology resource breadth to jointly influence competitive intensity and deviance. Firms with vigilant CEOs utilize firm resources to compete less intensively but in an unconventional way.Practical implicationsThis study reveals that when CEOs have a broader focus and attend to a wide range of information, their ability to quickly utilize firm resources for formulating competitive actions decreases. Consequently, it is crucial for CEOs to acknowledge the limitations of their attentional capacity. They need to understand that the allocation of their attention and information processing capacity has significant implications for the speed and quality of their decision-making processes.Originality/valueThe authors conceptualize and operationalize CEO vigilance, which is a novel construct that has not been studied. The authors show that CEO vigilance plays critical roles in utilizing resources to compete. This study offers significant research implications for attention-based view, upper-echelons theory, CD perspective and resource-based view.