Ranking Strategy: How Organizations Respond to The New Competitive Battlefields

The thesis that rankings do more than just make visible an organization’s position viz-á-viz a competitor, but stimulate new competitive rivalries, has provoked much interest. Yet, to date, scholars lack an understanding of how such competitive rivalries unfold at the level of organizational strategy. Put simply, if competition is played out in rankings, how does this change the way organizations strategize? We answer this question through an ethnographic study of how information technology organizations engage with rankings. The strategic responses we observed included “leapfrogging a rival,” “de-positioning a competitor,” “owning a market,” and “encouraging a breakout,” which together are theorized as “ranking strategy.” This novel conceptualization extends understanding of the organizational response to rankings by showing how common reactions like gaming are only the tip of the iceberg of a broader array of strategic responses. The study also throws light on the different ways a ranking can pattern competitive rivalries, including creating more episodic forms of rivalry.