| Summary: | One of the most important determinants of competitive advantage is the ability to successfully predict competitors‟ strategies, a capability known as competitive conjecturing capability. Although research has demonstrated the value of developing such a capability, the effects of training within a hostile environment on a manager‟s competitive conjecturing capability are not yet well understood. To address this gap, our study examines how operating in hostile environment reduces a manager‟s competitive conjecturing capability and how training helps to mitigate the negative effect. Our results show that, in the absence of training, managers tend to be less accurate in predicting competitor‟s actions when being placed in a highly hostile environment due to various cognitive biases and reliance on heuristics. However, with appropriate training which improves knowledge about the competitive environment, conjecturing accuracy actually improves within a hostile environment. This research contributes to managerial practice by identifying the remedial actions for overcoming reduction in competitive conjectural accuracy due to environmental hostility. Despite the controversies concerning the effectiveness of training, we found out that one of the key factors of inaccuracy in competitive conjecturing is due to the lack of experience and training to handle strategic decision making in a hostile environment. We discuss the managerial implications of these findings and how firms can improve on their competitive conjecturing ability and ultimately improve firm performance.
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