This study investigates, via two experiments, the effects of target transparency, which reflects employees' knowledge about each other's targets in an organization, on managers' target setting decisions. We also investigate whether this effect depends on the need for help among employees. We predict and find that target transparency and need for help interact to influence managers' target setting decisions. Target transparency increases target levels when the need for help is low, but not when it is high. Further, target transparency leads managers to differentiate less between individual employee targets. This reduction is greater when the need for help is high than when it is low. Additional analyses support our theory by revealing that managers strategically set targets in a way that is consistent with an intention to motivate both effort at the individual level and help among employees when such are needed. Our results help explain anecdotal evidence of why companies that value help among employees often make targets transparent throughout the entire organization.

We examine whether firms strategically increase cost rigidity to adopt an aggressive product market stance. Using large cuts in industry-level import tariff rates as a setting, we find that domestic firms respond to a looming competitive threat from foreign rivals by raising cost rigidity. This increase cannot plausibly be explained by investments to create physical excess capacity, suggesting firms enter cost commitments for labor and procurement instead. Additional tests corroborate the hypothesized preemptive intent. First, the increase in cost rigidity is concentrated in industries in which a firm’s aggressive market stance elicits a softening of competition. Second, it is only in these industries that firms with rigid cost structures experience market share gains around a large tariff cut. The latter effect is more pronounced the more reliably firms’ cost structures can be discerned from their financial statements. Overall, our study suggests that firms enter cost commitments as a preemptive strategy. Data Availability: Data are available from the public sources cited in the text.