The Performance and Competitive Implications of Attention Conformity to Exemplars

Despite its strategic significance, a theory of attention conformity has yet to be developed in the literature. In view of this omission, we propose a conceptual framework that theorizes the strategic implications when a nonexemplar firm strives for attention conformity to exemplars. Our core contention is that attention conformity impacts a nonexemplar firm’s performance through two countervailing mechanisms. On the one hand, it allows the nonexemplar firm to take advantage of the “path to success” identified by exemplars. On the other hand, attention conformity can lead to important strategic similarities between the nonexemplar firm and the exemplars, thereby evoking a racing mechanism that motivates the exemplars into intensified competitive actions, which in turn detriment the nonexemplar firm’s performance. Furthermore, we identify four firm- and industry-level contingencies pertaining to the learning and racing mechanisms associated with attention conformity. Regarding to the learning mechanism, we propose that a nonexemplar firm’s size will negatively moderate the learning effect while its slack resources will positively moderate this effect. With regard to the racing mechanism, we propose that industrial concentration and exemplars’ market dependence will positively moderate the racing effect. We test our hypotheses using a large, longitudinal dataset of publicly traded US firms. We find strong support for our predictions.