Factor Market Myopia: A Driver of Factor Market Rivalry

As customer expectations grow and companies across industries face extreme marketplace pressures, unexpected or, rather, unintended battles for resources and inputs can arise. This intense competition over inputs of production and services is called factor market rivalry. While previous work has discussed factor market rivalry and some potential mitigation strategies from its ill effects, one may wonder why factor market rivalry induces such extreme competition among firms for similar resources. Obviously materials with constrained supplies contribute to factor market rivalry, but the current research suggests that factor market rivalry is further caused by factor market myopia (FMM). FMM stems from viewing the sources of resources too narrowly or becoming fixated on a singular input when substitutes may exist. Developing the concept of FMM and contextualizing the idea in generalizable theory are the primary contributions of the current research.