Examples of resource-based empirical research

These principles about testing resource-based research have been applied in a wide variety of disciplines, not just strategic management. The remain- der of this chapter describes some of these tests. 1. RESOURCE-BASED RESEARCH IN STRATEGIC MANAGEMENT Not surprisingly, to date, strategic management scholars have conducted the most empirical tests of resource-based logic. These tests

Exemplars of resource-based research

Three of the articles cited above can be seen as exemplars of how resource- based research can be done. Consider, for example, Henderson and Cock- burn’s examination (1994) of the impact of ‘component competence’ and architectural competence on the research productivity of pharmaceutical firms. Henderson and Cockburn measure the value of these competencies by

The future of resource-based theory: Issues that are no longer important

In the development of resource-based theory, a variety of issues have been raised and addressed. While many of these questions have been important in the refinement of this theory, and, in fact, are reflected in the summary of resource-based theory presented in this book, in our view, some of these questions are very unlikely

Extending resource-based theory

While resource-based theory has been developed and extended broadly, there may still be further opportunities to extend the theory in some mean- ingful and important ways. Several of these possible extensions are noted here. However, how resource-based theory can be extended ultimately depends on scholarly creativity and innovativeness. What turns out to be the

Expanding resource-based theory

Additional empirical work and reformulating resource-based theory in mathematical terms are almost inevitable extensions of resource-based theory over the next several years. Possible expansions of resource-based theory, that is, efforts to take the theory where it has yet to go, are more speculative in nature. However, in this speculative vein, several possi- ble expansions

Introduction to (Sustainable) Enterprise Performance

Recent scholarship stresses that business enterprises consist of port- folios of idiosyncratic and difficult-to-trade assets and competencies (“resources”).1 Within this framework, competitive advantage can flow at a point in time from the ownership of scarce but relevant and difficult-to-imitate assets, especially know-how. However, in fast- moving business environments open to global competition, and characterized

Sensing (and Shaping) Opportunities and Threats

1. Nature of the Capability  In fast-paced, globally competitive environments, consumer needs, technological opportunities, and competitor activity are constantly in a state of flux. Opportunities open up for both newcomers and incumbents, putting the profit streams of incumbent enterprises at risk. As discussed in Teece et al. (1997), some emerging marketplace trajectories are easily

Seizing Opportunities

Nature of the Capability Once a  new  (technological  or  market)  opportunity  is  sensed, it must be addressed through new products,  processes,  or  ser- vices. This almost always  requires  investments  in  development and commercialization activity. Multiple (competing) investment paths are possible, at least early on. The quintessential example is the automobile industry, where in the

Microfoundations

1. Selecting Product Architectures and Business Models  The design and performance specification of products, and the business model employed, all help define the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. They reflect management’s hypothesis about what customers  want and how

Managing Threats and Reconfiguration

1. Nature  The successful identification and calibration of technological and market opportunities, the judicious selection of technologies and product attributes, the design of business models, and the com- mitment of (financial) resources to investment opportunities can lead to enterprise growth and profitability. Profitable growth will lead to the augmentation of enterprise-level resources and assets.

Microfoundations

1. Achieving Decentralization and Near Decomposability  Every system comprises subsystems (elements) that are to some extent interdependent and independent. However, as discussed earlier, enterprises are unlikely  to  be  continuously  responsive to customers and new technologies absent a high degree of decentralization. With decentralized decision making, different managers observe different information and control different deci-

Dynamic Capabilities, “Orchestration” Skills, and Competitive Advantage

The general framework advanced here sees dynamic capabilities as the foundation of enterprise-level competitive advantage in regimes of rapid (technological) change. The framework indicates that the extent to which an enterprise develops and employs superior (nonimitable) dynamic capabilities will determine the nature and amount of intangible assets it will create and/or assemble and the

Resources/Competences Distinguished from Dynamic Capabilities

The dynamic capabilities framework advances a neo-Schum- peterian theory of the firm and organizational decision making that is recognizable to those familiar with the behavioral theory of the firm, with evolutionary theorizing in economics, and with a Schumpeterian characterization of the innovation process. It also builds on what has come to be known as

Introduction

The concept of dynamic capabilities highlights  organizational and managerial competences. Key ingredients of dynamic capa- bilities include organizational processes directed toward learn- ing and innovation, the basic manner in which a business is designed, as well as the decision frames and heuristics  that inform firms’ investment choices over time. Once assets come within the

Understanding the Fundamental Economic Problems “Solved” by Management

It is an understatement to say that economic theory underplays the role of the manager; in fact, the strategic manager simply does not exist in any recognizable form. True, shareholders appoint agents (managers) to stewardship roles in the enterprise, but eco- nomic theory says little about what executives actually do and the economic function,

Definition and nature of Asset Orchestration

  1. Asset Orchestration (in the Face of Thin Markets) In early management scholarship, Chester Barnard and others stressed the role of management in limiting conflict and effec- tuating cooperation inside the firm. Barnard saw formal orga-nization and the business firm as a system of consciously coordinated activities of two or more persons. In

Asset Orchestration versus Coordination and Adaptation

Coordination as an economic problem is only necessary because of change (Hayek, 1945). In a static environment, a short period of “set up” would be required to organize economic activity; but absent change in consumer tastes or technology, economic agents (both traders and managers) would sort out the optimal flows of goods and services

Toward a Dynamic Capabilities (Economic) Theory of the Firm

Ronald Coase in his classic (1937) article on the nature of the firm described firms and markets as alternative modes of governance, the choice between them made so as to minimize transaction costs. The boundaries of the firm were set by bringing transactions into the firms so that at the margin the internal costs

Introduction

This chapter begins with some notes on the development of stra- tegic management concepts in general, and the dynamic capabil- ities framework in particular. The dynamic capabilities framework draws from many intellectual streams, including entrepreneurship, the behavioral theory of the firm and behavioral decision the- ory, organization theory, transaction cost economics, and to some

The Foundations of Dynamic Capabilities: Strategic Management

The focus of the field of strategic management is on choices with respect to the direction of the evolution of the business enterprise. It covers subjects of primary concern to senior executives, and to anyone interested in the success and failure of the business enterprise. The field is grounded in practice and exists because