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Transcript: The double-edged sword of business rivalry

A British Airways aircraft taxis past it's rival carrier Virgin at Heathrow airport

Ian Waldie/Ian Waldie/2003 Getty Images

Karl Moore: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to be speaking to Gavin Kilduff who is a professor at the Stern School at NYU.

Good morning, Gavin.

Gavin Kilduff: Good morning, Karl.

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KM: One of the things you have been studying is rivalry, looking at sports teams but also thinking about that in terms of business terms. What have you learned about rivalry?

GK: Yeah, Karl, I think the rivalry research has been very exciting for me so far. Take a historic rivalry, Magic Johnson and Larry Bird, two of the most famous sports rivals of all time. I think it was clear that these two had a unique relationship with one another: the games against each other were much more important, more significant, to themselves than games against other teams and players and it really seemed to fuel their motivation and their career success. I think the same thing happens in business. Pairs of companies or pairs of individuals can develop these powerful rivalry relationships. What is interesting is that the rivalry is often thought of as a motivating force, as benefiting performance, but I also have some research to suggest that it can have a dark side.

KM: Gavin, you have talked about some of the positives, what are some of the negatives of this intense competitive rivalry?

GK: Yeah, I think that rivalry can have some very interesting and powerful negative consequences. Some of my research suggests that it can lead people to be more unethical. Take a famous example, let's think about Tonya Harding and Nancy Kerrigan – I think that everybody remembers that infamous sabotage attempt that I would argue that was, at least partly, motivated by rivalry. I think that this can happen in the business world as well. A famous example comes from British Airways and Virgin Atlantic. In the early '90s British Airways was discovered to have launched a dirty tricks campaign against Virgin where they were calling up Virgin customers, lying to them about flight cancellations, and even spreading some rumours that Richard Branson, the CEO of Virgin, was coming down with HIV. So it was pretty scandalous stuff and so I think that there really is a double-edged sword to rivalry. It can motivate but it can also push people to do whatever it takes to defeat their personal rivals.

KM: If I am a CEO of an organization, do I want to go out there and absolutely make one of my key competitors a rival like that? Is that something that you would advise us to do?

GK: I would say that it depends on the nature of the work to some degree. If you have front-line employees that are working on effort-based takes where they might benefit from a motivational boost, and they don't have a lot of room to fudge the numbers or to engage in risky behaviour, then I think that rivalry is a beneficial motivational force. So companies and managers can really benefit from playing up rivalries with other companies. On the other hand, if you are in a domain, maybe finance or accounting, where there is this risk of more scurrilous behaviour, there is more autonomy for the employees, then I think it can be dangerous and, at the very least, you would need to monitor the effects fairly closely.

KM: So Gavin, if you look at it, if you are going to choose a competitive rival to go against, what kind of rival should you look for in your industry?

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GK: My research so far suggests that rivals that are very similar to us in demographic statistic as well as ability level - let's say market share for firms - are the rivals that are the most powerfully motivated. Furthermore, rivals that we've competed against head to head over time - that is an experience that lives on, according to my research, and really pushes people going forward. So those are two characteristics, then, that one might look for in selecting a rival although sometimes rivals are not chosen by us and kind of just develop over the course of competitive history.

KM: This has been Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail.

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