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臺大管理論叢
第
27
卷第
3
期
11
MacMillan, 1992). Chen, Venkataraman, Black, and MacMillan (2002) further distinguish
internal and public commitments: Internal commitment,
q
, is generated from sunk costs,
consistent leadership, and organizational inertia; public commitment,
p
, is generated from
social and institutional pressures to protect the firmʼs reputation. They have diverse impacts
on competitive tension, explained as follow.
With high public commitment, the follower firm tends to decrease its response delay
and offers a matching response to signal its commitment to its self-defense (Chen et al.,
2002). The competitorʼs subsequent response will consequently escalate to a direct (head-to-
head) competition (Smith et al., 2001). The resulting competitive tension will increase the
likelihood of a next-round, action-reaction exchange:
D = (p
‧
H)⁄s
,
(7)
where
s
is the response speed of the follower to protect the reputation and defend the
existing product markets.
Consider the followerʼs market-entry decision. Often it will require approval from top
management as it could receive much public attention (high
p
). Once the leader reacts,
A
(i.e., leaderʼs attack), the follower will have great incentive to justify its past action by
escalating its resource commitment. Formally:
p
= ln(
f
+
a
4
) +
A
, and
(8)
A
=
a
5
‧
r,
if
x
≤
r
≤
y
,
0,
otherwise,
(9)
where
a
4
is a constant employed to ensure that public commitment remains positive, and
a
5
is the coefficient to reflect the leaderʼs attack volume. Note that the leader does not
respond to the followerʼs every move because of risk incurred with (re)actions. The leader
attacks only within a given range of retaliation risk between
x
and
y
, that is, when the
followerʼs threat is substantial (i.e., above
x
) and before such (re)action becomes too risky
(i.e., below
y
).
In contrast, the followerʼs internal commitment tends to lessen the competitive tension
in an indirect competition. Recall that mutual market footholds of both the follower and
leader increase the likelihood of retaliation from each other. To avoid such retaliation, the
follower may turn its attention to internal development. The strategic evasion from an