The influence of institutional pressure on competitive activity: An empirical test in the higher education industry

This dissertation adopts an action-based view of strategy to explore the influence that institutional pressure has on competitive activity. The theoretical model draws from the action-based view of strategy and institutional theory and builds on recent research in strategic management examining the competitive activity among firms.; The data set consists of 591 liberal arts colleges over a 5-year time frame. Competitive actions were extracted from the IPEDS database and the College Blue Book. OLS regression analysis was used to test hypotheses relating to four institutional independent variables including governance, regulatory pressure, legitimacy and organizational age.; Results suggest that there is moderate support for the predictions of institutional theory in the direct effects models. The data indicated that governance pressure was not a predictor of competitive inactivity. Both regulatory pressure and age were predictors of competitive inactivity. While legitimacy received weak support for an inverted U-shaped relationship with competitive inactivity. However, in the interaction models, the predictions of institutional theory received no support. In fact, colleges facing high institutional pressures were more aggressive and performed better than did their counterparts facing low institutional pressure.; Overall, this research provides new theoretical insight and empirical evidence regarding the relationship between competitive activity and institutional theory. In addition, the results suggest that institutional pressures may be manageable and that organizations facing them can still be aggressive and outperform their rivals. This dissertation also adds to the body of empirical evidence on the effects of past performance on competitive behavior, finding that good past performance is related to competitive inactivity. Lastly, this dissertation provides value to managers, particularly with respect to the influence of institutional pressure on competitive activity.