The emotional base of interaction among competitors—an evaluative dimension of cognition

In this paper, we argue that the emotional bases of interorganisational interaction are of importance for understanding situations where the context of competition is under radical change. From an inductive study of descriptions of interaction among competitors before and after the deregulation of the alcohol import industry in Sweden we show (a) how firms perceive markets boundaries (their boundary beliefs), i.e. identifying who the competitors are, and (b) how they perceive the rules of the competitive game (their rules beliefs), i.e. the norms that define how to interact with competitors, that is their cognitions of competition, and suggest that both these belief sets are challenged due to the changing conditions of competition. New opportunities are created, new actors appear at the arena and established firms change their behaviour—all of which create and spread uncertainty and unpredictability within the industry. This uncertainty triggers intense emotions, which in turn affect firms’ interpretations of the change and the way they interact with competitors. This paper is an explorative attempt to examine more closely how radical change translates into changed boundary beliefs, changed beliefs about appropriate strategic actions, and changed rules of the competitive game, and to elaborate on the influence of emotions in these processes.