Why is it difficult for external players to accept a
new strategic landscape? The problem, again, is with
cognitive processes. The stakeholders have a set way
of organizing and interpreting the industry. Research
by MIT’s Ezra Zuckerman shows that the further
away a new strategy takes a fi rm from its historical
identity, the more the strategy is discounted by fi-
nancial analysts and other institutional players. And
this negative reaction from external stakeholders
affects firms’ competitive behavior: Research by the
University of Minnesota’s Mary Benner suggests that
when firms meet such resistance, they tend to shy
away from their intent to pursue the new initiative.