Strategic Management Concepts for Antitrust: Cooperation, Stakeholders and Sustainability

• Published date: 01 December 2014
• Date: 01 December 2014
• DOI: http://doi.org/10.1177/0003603X1405900404
• Subject Matter: Article

THE ANTITRUST BUL L E T I N :Vol. 59, N o. 4/Winte r 2014 :769

Strategic management concepts

for antitrust: Cooperation,

stakeholders and sustainability

BYNORMAN W. HAWKER*AN D THOMAS N. EDMOND S**

Now that the rule of rea son has largely over t aken per se rules of

antitrust law in the United States, antitrust enforcement generally

requires evaluation of a wide v ariety of evidence to dete rmine the

challenged conduct’s effect on competition. This article provides an

overview of three concepts commonly taught in MBA-level strategic

manag ement c ourses t o evalu ate muc h of the sa me evid ence fo r

purposes of determining the firm’s competitive strategy: cooperative

strategies, stakeholder management, and sustainable business

practices. Unlike the neoclassical microeconomic view of competition

commonly used in modern antitrust analysis, strategic management

teaches students to view competitors not only as rivals, but also as

stakeholders with whom their f irms may need to cooperate. Whil e

the application of these concepts to specific antitrust issues requires

further analysis , these concepts provi de a basis for suppleme nting

the understanding of business competition under the rule of reason.

KEY WORDS:antitrust, strategic management, stakeholder, sustainability,

cooperation, tacit collusion

© 2014by Federal Legal Publications, Inc.

* Professor, Haworth College of Business, Western Michigan University;

Senior Fellow, American Antitrust Institute.

** Faculty Specialist, Haworth College of Business, Western Michigan

University.

AUTHORS’ NOTE: The comments and suggestions from the participantsat the Ameri-

can Antitrust Institute’s 2013 Annual Invitational Symposium on Antitrust as an

Interdisciplinary Field: Insights from Business Strategy and Research on an early draft

of this work havegreatly improved what is contained herein. Errors are solely ours.

I. INTRODUCTION

Toput it another way competition has been shown to be useful up to a certain

point and no further.1

This article updates earlier work examining what strategic manage-

ment teaches MBA students about antitrust and competition.2That

research found that MBA students learned to evaluate competition as

the interpl ay of five forces based on the mo del first dev eloped by

Michael Porter and that their goal should be to create sustainable

competition advantages for their firms. At the same time, students

learned very little about antitrust law and competition policy from

strategic management.

Strategic management continues to play an important role in the

MBA curriculum, and nearly all business schools accredited by the

Association toAdvance Collegiate Schools of Business require students

to take at least one strategic management course. However, an exami-

nation of current textbooks suggests that strategic management now

places an increasing emphasis on cooperative strate gies, including

strategic alliances and tacit collusion, as avenues toward the goal of

sustainable competitive advantage. These texts also place greater

emphasis on stakeholder theory as opposed to shareholder wealth

maximization to define the duties of the firm’s managers. Business

ethics and social responsibility also play an increasingly important role

in strategic management under the guise of “sustainability,” a concept

that covers not only environmental but also social and economic con-

cerns. These concepts suggest students should not see competitors sim-

ply as threatsto the economic well-being of theirown firms.

To be sure, the strategic management texts examined in this article

teach MBA students to view other firms as rivals, and the original

findings from a decade ago remain true today. Nonetheless, students

770 :THE ANT I T R U S T BULLETIN:Vol. 59, No. 4/Winter 2014

1Franklin Delano Roosevelt, Speech Befo re the Troy, New York, Peo-

ple’s Forum (Mar. 3, 1912), available at http://www.nps.gov/history/history

/online_books/cany/fdr/part1.htm.

2Norman W. Hawker, The Public Policy of Antitrust and Strategy, 21 J.

PUB. POL’Y& MARKETING 257 (2002) [hereinafter Hawker, Public Policy]; Nor-

man W. Hawker, Antitrust Insights From Strategic Management, 47 N.Y.L. SCH.

L. REV. 67 (2003) [hereinafterHawker, Antitrust Insights].