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Book part
Publication date: 10 December 2018

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Organization Design
Type: Book
ISBN: 978-1-78756-329-2

Book part
Publication date: 29 August 2007

José F. Molina-Azorín

This chapter focuses on the empirical research on the resource-based view of the firm (RBV), and its main purpose is to analyse the use of mixed methods in this perspective. The…

Abstract

This chapter focuses on the empirical research on the resource-based view of the firm (RBV), and its main purpose is to analyse the use of mixed methods in this perspective. The recent advance of the RBV has posed new challenges, and the issue need not be quantitative versus qualitative methods, but rather how to combine the strengths of each in a mixed methods approach. This study carries out a literature review about the use of mixed methods in the RBV and provides an examination of opportunities and challenges associated with the application of mixed methods in order to improve RBV research. Moreover, the chapter seeks to introduce mixed methods research in order to familiarize to strategic management and the RBV scholars about this type of research and its terminology, procedures, designs and purposes.

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Research Methodology in Strategy and Management
Type: Book
ISBN: 978-0-7623-1404-1

Book part
Publication date: 10 December 2018

Florian Englmaier, Nicolai J. Foss, Thorbjørn Knudsen and Tobias Kretschmer

The authors argue that organization design needs to play a more active role in the explanation of differential performance and outline a set of ideas for achieving this both in…

Abstract

The authors argue that organization design needs to play a more active role in the explanation of differential performance and outline a set of ideas for achieving this both in theoretical and empirical research. Firms are heterogeneous in terms of (1) how well they do things, capturing persistent productivity differences, and (2) how they do things – and both reflect firms’ organization design choices. Both types of heterogeneity can be persistent, and are interdependent, although they have typically been studied separately. The authors propose a simple formal framework – the “aggregation function framework” – that aligns organization design thinking with the emphasis on performance heterogeneity among firms that is characteristic of the strategy field. This framework allows for a more precise identification of how exactly organization design may contribute to persistent performance differences, and therefore what exactly are the assumptions that strategy and organization design scholars need to be attentive to.

Book part
Publication date: 24 June 2015

Heechun Kim and Robert E. Hoskisson

Our study proposes a resource environment view (REV) of competitive advantage by unpacking the environmental origins of a firm’s competitive advantage. The key tenet of the REV is…

Abstract

Our study proposes a resource environment view (REV) of competitive advantage by unpacking the environmental origins of a firm’s competitive advantage. The key tenet of the REV is that the heterogeneity and imperfect mobility of strategic factor markets and institutions across countries explain how firms based in different countries would likely both create and sustain a competitive advantage. In particular, our study introduces the notion of “the paradox of environmental embeddedness.” The paradox lies in the fact that the same environmental conditions – in terms of strategic factor markets and institutions – that enable firms to create a competitive advantage can paradoxically also create a situation in which it is more difficult for these firms to sustain an advantage. Another important aspect of our study is that, to enhance our understanding of how firms manage the paradox of environmental embeddedness, our study specifies the resource environmental conditions under which firms’ internal and external resource-oriented strategies – that is, the development of dynamic capabilities and interventions in the country resource environment – are more beneficial when managing the environmental paradox. Overall, our theorizing has important implications for strategic management theory and practice.

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Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

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Book part
Publication date: 10 December 2018

Metin Sengul

In this chapter, the author outlines the link between organization design and competitive strategy, focusing on rivalry. A firm’s organization design choices can affect its…

Abstract

In this chapter, the author outlines the link between organization design and competitive strategy, focusing on rivalry. A firm’s organization design choices can affect its competitive advantage as well as the strategic decisions of its rivals. Therefore, organization design can influence the nature and intensity of competitive interactions between firms. To illustrate this effect, the author focuses on the literature on divisionalization and offers a set of propositions as examples. Taken together, the author makes three main observations: (1) a firm’s competitive position and objectives are reflected in its organizational choices; (2) heterogeneity in competitive position and objectives lead to heterogeneity in organization design choices across firms; and (3) organization design and competitive strategy are interdependent processes. The author concludes by discussing the implications for strategy and management research and pointing out some opportunities for future research.

Book part
Publication date: 1 January 2008

Ron Sanchez

Part I of this chapter applies the principles of the philosophy of science and the derived scientific method to analyze the foundational concepts and core proposition of the…

Abstract

Part I of this chapter applies the principles of the philosophy of science and the derived scientific method to analyze the foundational concepts and core proposition of the Resource-Base View (RBV) as popularized by Barney (1986, 1991, 1997). This analysis identifies seven fundamental conceptual deficiencies and logic problems in Barney's conceptualization of “strategically valuable resources” and in Barney's VRIO framework for identifying strategically valuable resources that can be sources of sustained competitive advantage. Three problems – the Value Conundrum, the Tautology Problem in the Identification of Resources, and the Absence of a Chain of Causality – relate to the RBV's and VRIO's failure to provide an adequate conceptual basis for identifying strategically valuable resources. The Uniqueness Dilemma, the Cognitive Impossibility Dilemma, and an Asymmetry in Assumptions about Resource Factor Markets result in an inability of the VRIO framework to support identification of resources that can be sources of sustained competitive advantage. More fundamentally, the core proposition of the RBV – that resources that are strategically valuable, rare, inimitable, and organizationally embedded are sources of sustainable competitive advantage – is argued to result directly in the Epistemological Impossibility Problem that precludes use of the scientific method in RBV research. This chapter argues that until these conceptual deficiencies and logic problems are recognized and remedied, the RBV – in spite of its current popularity – is and will remain theoretically sterile and incapable of contributing in any systematic way to the development of strategy theory.

Part II of this chapter then suggests how foundational concepts developed within the competence perspective on strategy provide essential remedies for the identified deficiencies and problems in the RBV – and thereby provide a more conceptually adequate basis for representing the nature of firms in the scientific study of their interactions and competitive outcomes.

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A Focused Issue on Fundamental Issues in Competence Theory Development
Type: Book
ISBN: 978-1-84855-210-4

Book part
Publication date: 22 June 2011

Torben Pedersen, Christine Soo and Timothy M. Devinney

This research examines the differential impact of the importance of internally and externally sourced information and knowledge and their relationship to absorptive capacity and…

Abstract

This research examines the differential impact of the importance of internally and externally sourced information and knowledge and their relationship to absorptive capacity and firm performance. In addition, this analysis deals directly with the unobservable heterogeneity amongst firms that is generally viewed as the raison d'être for a unique resource-based perspective of organizational performance. Latent class, finite mixture regression models are used that show that a single model relating knowledge sourcing, absorptive capacity and firm performance is inadequate in explaining even a minor portion of the variation which is seen between firms.

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Dynamics of Globalization: Location-Specific Advantages or Liabilities of Foreignness?
Type: Book
ISBN: 978-0-85724-991-3

Book part
Publication date: 25 October 2017

Ron Sanchez and Aimé Heene

In this paper we examine some fundamental epistemological issues in building theory for applied management science, by which we mean theory that can be usefully applied in a…

Abstract

In this paper we examine some fundamental epistemological issues in building theory for applied management science, by which we mean theory that can be usefully applied in a scientific approach to management research and practice. We first define and distinguish “grand theory” from “mid-range theory” in the social and management sciences. We then elaborate and contrast epistemologies for (i) building “grand theory” intended to be applicable to all cases and contexts, and (ii) building “mid-range theory” intended to apply to specific kinds of contexts. We illustrate the epistemological challenges in building grand theory in management science by considering important differences in the abilities of two “grand theories” in strategic management – industry structure theory and firm resources theory – to support development of conceptually consistent models and propositions for empirical testing, theoretical refinement, and application in management practice. We then suggest how a mid-range theory building approach can help to achieve integration of the two grand strategic management theories and improve their ability to support empirical testing, theory refinement, and application of theory in practice. Finally, we suggest how the competence-based management (CBM) perspective provides the foundational concepts needed to build both mid-range theory and (potentially) grand theory in strategic management that can be usefully applied in management science.

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Mid-Range Management Theory: Competence Perspectives on Modularity and Dynamic Capabilities
Type: Book
ISBN: 978-1-78714-404-0

Keywords

Book part
Publication date: 23 December 2005

Arabella Mocciaro Li Destri and Giovanni Battista Dagnino

Various authors have brought forth the idea that the increase in context turbulence and the relentless change in today's economic and competitive environments have rendered it…

Abstract

Various authors have brought forth the idea that the increase in context turbulence and the relentless change in today's economic and competitive environments have rendered it essential for an effective firm strategy to combine both value appropriation and value creation (Porter, 1996; Moran & Ghoshal, 1999; Venkataraman & Sarasvathy, 2001; Hitt, Ireland, Camp, & Sexton, 2001b). Nonetheless, the methodological bases and the assumptions that characterize contributions concerning value appropriation and value creation are notably different and in many respects opposite to one another. These profound methodological differences hinder the possibility of a combined consideration of value appropriation and value creation issues within a coherent interpretative framework. By reinterpreting more conventional strategy studies in the light of the Austrian process view, this article builds a process framework which is able to consider and render mutually compatible both value appropriation and value creation within the unitary process of firm development. In addition, the use of the Austrian approach as an interpretative lens enables an evolution and extension of the resource-based theory that consents it, not only to grasp the mechanisms behind value appropriation, but also to suggest new ways of viewing post-industrial firm behavior that help to interpret its dynamic and proactive role in the value creation process.

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Strategy Process
Type: Book
ISBN: 978-1-84950-340-2

Book part
Publication date: 12 September 2003

Jeffrey L Furman

The origin and nature of meaningful, persistent firm-specific differences is a central issue in the study of business strategy. I investigate in this paper the role of…

Abstract

The origin and nature of meaningful, persistent firm-specific differences is a central issue in the study of business strategy. I investigate in this paper the role of characteristics physically external to firms, but embodied in their local geographic areas, in driving differences in firms’ organizing strategies. Specifically, I examine the extent to which location-specific characteristics affect the organization of pharmaceutical firms’ research laboratories bringing both qualitative and quantitative evidence to bear on this issue. Analyses of the histories of several late 19th century drug makers suggest that differences in local institutions, labor markets, and demand structures played important roles in affecting case firms’ strategic evolution. For example, while Mulford (Philadelphia PA) exploited the strength of nearby universities and the city’s public health system in organizing around leading-edge capabilities in bacteriology, Sterling (Wheeling WV) found that its local environment rewarded investments in marketing and distribution. Panel data analysis on a sample of firms from the late 20th century provides complementary evidence, demonstrating that the scientific orientation of modern drug discovery laboratories is positively and significantly correlated with measures of the strength of the local scientific and technical base. Together, these analyses suggest that location-specific characteristics may be important in driving firm heterogeneity and, ultimately, competitive advantage.

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Geography and Strategy
Type: Book
ISBN: 978-0-76231-034-0

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