c Summary This research investigates factors which influenced the corporatelevel divestment decisions of large, diversijied firms. Field research, including interviews with corporate executives of 40 large diversijied firms, provided the data to test propositions developed from various literature sources. In general, the findings from this research indicate that a business unit's strength, its relationship to other units in its firm and its parent firm's financial position compared to its competitors are important divestment influences, whereas other facfors such as general economic conditions are not. Some of the findings are consistent with conventional management wisdom, but others are counterintuitive. Related literature Several branches of management literature provided valuable insights during the formulation of this research. The relevant areas include life cycle theory and end-game

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Prior competitive dynamics research has drawn on theories of information processing to model the subjective antecedents of executives' retaliation choices. This prior work has made great progress in developing our understanding of the retaliation choices most firms will make to a given type of attack. What the information processing perspective has not been able to do is explain firm‐specific behavior to predict which competitive moves individual firms will challenge, or explain why individual firms differ in the types of actions that they are most likely to challenge. The goal of this paper is to sharpen the theoretical and empirical focus on predicting firm‐level retaliation proclivities. We leverage managerial cognition research to examine the relationship between firm‐level differences in the cognitive frameworks that executives possess, and firm‐level differences in whether and how quickly firms challenge a market move. Results from a longitudinal study of the airline industry suggest that the addition of a cognitive perspective provides important insights into competitive retaliation. Copyright © 2010 John Wiley & Sons, Ltd.

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