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Jaideep Anand, Hyunseob Kim and Shaohua Lu

Firms pursue a number of redeployment strategies in order to achieve growth and create value for their stakeholders. While the majority of previous research focuses on how…

Abstract

Firms pursue a number of redeployment strategies in order to achieve growth and create value for their stakeholders. While the majority of previous research focuses on how firms create synergic value by sharing resources across multiple business units, we lack a systematic analysis of the determinants of different redeployment strategies. In this paper, we develop a theoretical framework that allows us to systematically investigate how intrinsic resource characteristics affect resource redeployment strategies. Our framework identifies four critical characteristics of resources, that is, fungibility, scale-free nature, decomposability, and tradability. We develop a number of predictions that provide guidance for researchers to identify the optimal resource redeployment strategy appropriate for resources with a certain set of characteristics.

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Resource Redeployment and Corporate Strategy
Type: Book
ISBN: 978-1-78635-508-9

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Article

Roberto S. Vassolo and Jaideep Anand

Firms frequently need to update their capabilities in changing environments but face significant barriers to accomplish this goal due to the stickiness of their routines…

Abstract

Firms frequently need to update their capabilities in changing environments but face significant barriers to accomplish this goal due to the stickiness of their routines, local search constraints, bounded rationality, uncertain imitability, and causal ambiguity. Under high levels of uncertainty, dynamic capabilities are often externally oriented, involving acquisitions and alliances. However, nonunique but competitive predictions about the behavior of these capabilities arise from the evolutionary theory. We test these competitive hypotheses analyzing portfolios of acquisitions and alliances made by pharmaceutical firms in search of portfolios of biotech capabilities. The analysis of portfolios enables us to better identify “common practices” in the pharmaceutical industry than using a transactional‐level focus. We develop implications for the evolutionary theory and for managerial practice.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 6 no. 1
Type: Research Article
ISSN: 1536-5433

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Book part

Jaideep Anand

Firms in mature or declining industries are faced with the challenge of redeploying their excess resources to new applications, and M&A strategies can be an important…

Abstract

Firms in mature or declining industries are faced with the challenge of redeploying their excess resources to new applications, and M&A strategies can be an important component of this effort. I consider two ways in which excess resources are applied to more attractive business opportunities through M&A, and I analyze these strategies through the lenses of industrial organization economics, resource-based view, evolutionary perspective and agency theory. In the redeployment strategy, firms seek attractive opportunities in related industries, using acquisitions to fill any resource deficiencies. In the consolidation strategy, firms combine with their competitors within the same industry. The resulting larger pool of resources provides greater opportunities for disposing off their under-utilized resources through the market, while enhancing their profitability. Either way, excess resources can find new applications, within the firm in the former strategy and through the market in the latter. I also discuss some implications for future research and practice.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-0-76231-172-9

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Book part

Jaideep Anand, Raffaele Oriani and Roberto S. Vassolo

This study analyses the determinants of the value of a portfolio of real options and explores implications for strategic management. It focuses the analysis on four…

Abstract

This study analyses the determinants of the value of a portfolio of real options and explores implications for strategic management. It focuses the analysis on four elements: the number of real options in the portfolio, constraints on the number of options that can be exercised, the volatility of underlying assets, and the correlation between underlying assets. These elements are articulated around a trade-off between growth options and switching options and are applied to different strategic situations of technological, market, and macroeconomic uncertainty.

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Real Options Theory
Type: Book
ISBN: 978-0-7623-1427-0

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Abstract

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-0-76231-172-9

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Book part

Abstract

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-0-76231-172-9

To view the access options for this content please click here

Abstract

Details

Resource Redeployment and Corporate Strategy
Type: Book
ISBN: 978-1-78635-508-9

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Abstract

Details

Real Options Theory
Type: Book
ISBN: 978-0-7623-1427-0

To view the access options for this content please click here

Abstract

Details

Resource Redeployment and Corporate Strategy
Type: Book
ISBN: 978-1-78635-508-9

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Book part

Cary Cooper and Sydney Finkelstein

Although mergers and acquisitions have been a fundamental part of business for the last three decades, they have been increasingly used in recent times as a strategic tool…

Abstract

Although mergers and acquisitions have been a fundamental part of business for the last three decades, they have been increasingly used in recent times as a strategic tool for growth, dealing with excess resource capacity, enhancing the base and scale of operations for competitive advantage and the like. One area of increasing concern in M&A research, however, has been in the area of understanding the integration process and how this might lead to enhanced performance and to the “2+2=5” hoped-for effect of M&As.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-0-76231-172-9

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