Finding a Working Balance Between Competitive and Communal Strategies

This paper presents a dynamic framework that describes how firms allocate limited resources between improving their competitive position relative to rivals and their communal position shared with rivals. This dynamic framework outlines how organizational field-level dynamics influence industry attractiveness and thereby alter a firm's incentive to engage in communal strategy relative to competitive strategy. Communal strategy, in turn, can influence the institutions governing an organizational field and thereby shape industry attractiveness. Overall, the interplay between factors exogenous and endogenous to an industry cause change in an organizational field and so determine the nature of the communal environment shared by a firm and its rivals over time. Analysis of this interplay provides insight into the micro-level drivers of macro-level change and furthers understanding of the conditions under which rivalrous firms voluntarily contribute to collective betterment of their industry despite collective rationality. Copyright Blackwell Publishing Ltd 2006.