Prior research on how ex ante performance impacts competitive behavior has led to conflicting conclusions. Prospect theory, for example, suggests that poor performance promotes aggressive behavior, whereas threat-rigidity theory predicts the opposite. We attempt to reconcile these conflicting views by incorporating a contingency perspective that empirically tests, specifically, how top management team heterogeneity and a favorable industry context moderate the relationship between poor performance and competitive aggressiveness. Our findings suggest that performance-distressed firms managed by heterogeneous top management teams are less likely to compete aggressively. However, contrary to predictions, performance-distressed firms competing in competition-buffered industries are more likely to compete aggressively. Copyright © 2002 John Wiley & Sons, Ltd.

This paper analyses the progress made in the field of strategic management over the past three decades. One approach to analysing a discipline’s trajectory is to explore its exemplary research. We review the papers awarded the Dan and Mary Lou Schendel, Strategic Management Society (SMS) Best Paper Award of the Strategic Management Journal (SMJ) since 1993, to demonstrate the emergence of strategic management as a specific discipline with a distinct view of how firms generate competitive advantage. Our paper interprets the development of the discipline from its market-based and structural roots to attempts to decipher the ‘black box’ of the organisation in analysing capabilities, particularly dynamic capabilities, and resources. Our study shows how the conceptual breakthroughs of the exemplary papers are further developed by the field through theory testing and extension using increasingly sophisticated methodologies published by journals such as Irish Journal Of Management (IJM). Our review of both journals highlights that despite increasing market, social and cultural instability since these seminal papers were first conceived, their lessons are still relevant and increasingly critical to both theory and practice in establishing the future trajectory for strategic management and a framework for organisations to compete.