That's Our Turf! Identity Domains and Competitive Dynamics

Abstract

We examine the effects of organizational identity on the competitive dynamics of firms. Identity increases the awareness, motivation, and capability to respond to competitors' actions within the firm's identity domain, defined as cognitive competitive space that holds psychological value for a focal firm's management. Because of the psychological and motivational importance of a firm's identity, we predict that the actions and reactions within an identity domain may not adhere to traditional economically based explanations of managerial behavior.