Management Resources
by
Pek-Hooi Soh
  • LAST MODIFIED: 25 March 2020
  • DOI: 10.1093/obo/9780199846740-0191

Introduction

Management scholars have long argued that firm performance difference can be driven by strategic resources inside a firm. Most resources in organizations are considered as input factors required to perform a firm’s business functions and operations efficiently. There are other resources such as brand capital and organizational knowledge that are produced from the usage of inputs. Resources are said to be strategically important when their use enables the firm to create economic rents, resulting in the firm’s competitive advantage that no current and potential competitors can achieve. Examples of strategic resources are managerial skills, specialized knowledge, and organizational routines such as human resource and supply chain practices. Strategic resources arising from within firms and across partnering firms can also be uniquely accessed, combined, and utilized in order to drive firm performance and growth. Most empirical studies have focused on understanding how firms develop and transform rent-generating resources into a form of firm-specific assets that enable them to exploit new opportunities and achieve sustainable competitive advantage. Research inquiries on strategic resources have also led to the development of several important conceptual perspectives, such as the resource-based view, dynamic capabilities, core competence, and the knowledge-based view. The respective conceptualization of these perspectives has sparked many debates and critiques among the perspectives about the assumptions of resources and associated value and the extent to which different perspectives contribute to the usefulness of explaining persistent firm performance difference and prescribing pragmatic approaches to management.

Journals

A large body of research on firm resources in strategic management and other related disciplines has been published as journal articles. Search results in Google Scholar using such keywords as “strategic resources” and “competitive advantage” combined have returned more than sixteen thousand articles published since 1960. Based on resources by organizational functions mentioned in the journal articles, the volume of research papers can be ordered from human resources, financial resources, marketing resources, and managerial resources to R&D resources. Academy of Management Journal, Academy of Management Review, Journal of International Business Studies, Journal of Management, Journal of Management Studies, Journal of Marketing, Management Science, Organization Science, Research Policy, and Strategic Management Journal the leading sources of references for reviews, theory development and empirical research on the topic of firm resources deployed in competitive environments.

Resources in Organizations

For decades, strategy theorists have debated the factors that enable firms to create and sustain competitive advantages in competitive environments. Much of the early debate had taken firms as a black box, putting emphasis on the role of industry structures as defined by Michael Porter’s Five Forces (Porter 1979 and Porter 2008). Since 1980s, scholars have begun to analyze the internal aspects of a firm and how organization of firm resources has an impact on firm performance in a competitive environment. Wernerfelt 1984 argues that firms can identify opportunities to create or leverage their resource positions to yield high returns and deter new entrants. Wernerfelt 1984 develops a strategic framework called the “resource-based view” of the firm (RBV), which combines the internal and external perspectives of competitive analysis. The framework implies that neither internal nor external analysis is sufficient to help firms create an effective strategy to compete. Barney 1991 refers to firms’ resources as physical capital, human capital, and organizational capital. Barney 1991 argues that firm resources are heterogeneous and may not be perfectly mobile across firms. Collis and Montgomery 1995 classifies firm resources into three types: (1) physical or tangible assets, which include buildings and equipment; (2) intangible assets such as brand names, technological know-how, and intellectual property; and (3) organizational capability embedded in a firm’s routines, processes, and culture. Barney, et al. 2011 suggests that resources and capabilities can be viewed as bundles of tangible and intangible assets, including a firm’s management skills, organizational processes and routines, and the information and knowledge it controls. A large body of work in management has identified various forms of intangible resources by the functional areas of the firm ranging from management and human resources to R&D and marketing. The scope of most empirical studies covers three lines of inquiries: (a) the characteristics, antecedents, and consequences of firm resources as a source of competitive advantage; (b) the processes and mechanisms of transforming of firm resources from within and across firm boundaries into firm-specific assets and capabilities; and (c) the resource-performance relationships from a contingent view. For more on competitive advantage and sustainable advantage, see the separate Oxford Bibliographies article Strategy.

  • Barney, Jay. “Firm Resources and Sustained Competitive Advantage.” Journal of Management 17.1 (1991): 99–120.

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    This is one of the foundational works on the resource-based view of the firm. Barney identifies the characteristics of firm resources and analyzes the conditions under which heterogeneous and imperfectly inimitable firm resources can give rise to a firm’s sustained competitive advantage.

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  • Barney, Jay B., David J. Ketchen, and Mike Wright. “The Future of Resource-Based Theory: Revitalization or Decline?” Journal of Management 37.5 (2011): 1299–1315.

    DOI: 10.1177/0149206310391805Save Citation »Export Citation » Share Citation »

    Traces the development of firm resources as a determinant of firm value and firm growth and the resulting emergence of resource-based (RB) theory. Affirms the resource-based theory’s contributions and identify promising areas for future research.

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  • Collis, David, and Cynthia A. Montgomery. “Competing on Resources: Strategy in the 1990s.” Harvard Business Review (July–August 1995): 118–128.

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    An article written for the managerial audience explains how management can determine the value of various firm resources in a dynamic competitive environment.

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  • Porter, Michael E. “How Competitive Forces Shape Strategy.” Harvard Business Review 57.2 (March–April 1979): 137–145.

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    Michael Porter is best known for his pioneering framework of competition strategy based on the foundations of industrial organization economics. The framework is called the Five Forces, where suppliers, customers, substitute products, potential entrants, and rivalry can determine the competition and profitability of the industry.

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  • Porter, Michael E. “The Five Competitive Forces That Shape Strategy.” Harvard Business Review 86.1 (2008): 78–93.

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    Following the first publication, Michael Porter’s Five Forces framework has been widely adopted by company executives and business consultants to analyze the fundamentals of a competitive industry and assess how economic value is generated and apportioned by various competing participants in the industry. In this article, Porter identifies the challenges managers face in applying the framework and offers an extension of strategy formulation, which includes new sections showing how to put the Five Forces analysis into practice.

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  • Wernerfelt, B. “A Resource-Based View of the Firm.” Strategic Management Journal 5.2 (1984): 171–180.

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    This is a seminal paper on the resource-based view of the firm, a theory of competitive advantage that has become a dominant paradigm in strategic management. The theory suggests that firms can outperform their current and potential rivals by creating resource position barriers to gain higher returns. This paper is one of the most cited studies in the social sciences and has been central to the recent development of strategic management theories.

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Resources as a Source of Competitive Advantage

A firm is said to create a competitive advantage when its strategy to generate economic rents cannot be replicated by its current or potential rivals. Barney 1991 (cited under Resources in Organizations) argues that an important source of competitive advantage comes from firm resources that are heterogeneous and immobile in a firm’s environment. Barney 1991 further defines four attributes of firm resources that give rise to resource heterogeneity and immobility: (a) valuable, (b) rare, (c) imperfectly imitable, and (d) non substitutable, or in short, VRIN. Firms that formulate and implement strategies based on resources that meet these conditions would enable them to exploit the opportunities and mitigate the threats arising from the competitive environments, thereby sustaining their competitive advantage. Following this line of inquiry, a large body of academic studies have adopted and expanded the resource-based view of the firm as a strategic framework in several related disciplines ranging from marketing and entrepreneurship to international business (see Barney, et al. 2011, cited under Resources in Organizations). Further works on firm resources and associated value have also evolved and developed into several related concepts such as core competence, dynamic capabilities, and knowledge assets. Hamel and Prahalad 1990 refers to firm resources as core competencies and shows how firms can exploit their resources across multiple lines of business. Brown and Eisenhardt 1998 and Helfat and Peteraf 2003 argued from a dynamic resource-based view that firms must continue to adapt, integrate, and reconfigure their resources and capabilities to create temporal advantages in order to attain sustained competitive advantage. Mahoney 1995 underscores the importance of the resource of top management team in developing and combining unique firm resources, citing the interrelatedness of management’s mental models and firm resources as a key factor of firm difference. Kogut and Zander 1992 singles out knowledge as an important resource of the firm, in particular the know-how that is embedded in the social relationships of the individuals inside a firm. The capabilities of the firm are determined by how the firm organizes, develops, and combines its knowledge components to exploit new opportunities. Newbert 2007 suggests that understanding how firms learn to organize, combine, and configure their resources more broadly will shed new light on the sources of competitive advantage rather than evaluate the attributes of heterogeneous resources alone.

  • Brown, S. L., and K. M. Eisenhardt. Competing on the edge: Strategy as structured chaos. Boston: Harvard Business School Press, 1998.

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    This book features the dynamic view of strategy in high-velocity and highly competitive environments through field research. For the managerial audience, the book offers in-depth analysis and pragmatic insights into how agile and flexible organizations compete on the edge by capitalizing on old and new resources and competencies as and when opportunities arise.

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  • Hamel, G., and C. K. Prahalad. “The Core Competence of the Corporation.” Harvard Business Review 68.3 (1990): 79–93.

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    Suggests that companies can gain competitive advantage by allocating and coordinating resources across business units collectively to deliver value to productive activities. The resulting managerial knowledge and skills in the systemic approach to leveraging resources are built into the core competence of the firm, a strategic resource that is more important than optimizing corporate returns through capital trade-offs among business units.

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  • Helfat, Constance E., and Margaret A. Peteraf. “The Dynamic Resource-Based View: Capability Lifecycles.” Strategic Management Journal 24.10 (2003): 997–1010.

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    Presents a conceptual framework of capability lifecycle to explain how organizational capability emerges and develops over time. It is through the evolutionary, dynamic process that firm resources and capabilities become context specific, leading to path dependency unique to individual firms.

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  • Kogut, Bruce, and Udo Zander. “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology.” Organization Science 3.3 (1992): 383–397.

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    Argues that knowledge resides in the social relationships among individual members in an organization and that localized learning through the interactions of the members over time creates and reinforces the path dependence of the firm’s knowledge base and combinative capabilities. Combinative capabilities refer to the synthesis and combination of new and existing knowledge to exploit and explore new opportunities.

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  • Mahoney, Joseph T. “The Management of Resources and the Resource of Management.” Journal of Business Research 33.2 (1995): 91–101.

    DOI: 10.1016/0148–2963(94)00060-RSave Citation »Export Citation » Share Citation »

    Mahoney argues that the resource of management is key to understanding how firm resources are developed, combined, and deployed to create sustained competitive advantage. It further suggests that the resource-based view of the firm ought to be combined with the behavior and cognitive approaches in organizational learning in order to extend our understanding of firm heterogeneity.

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  • Newbert, Scott L. “Empirical Research on the Resource-Based View of the Firm: An Assessment and Suggestions for Future Research.” Strategic Management Journal 28.2 (2007): 121–146.

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    This study reviews a sample of empirical studies that test hypotheses framed in the RBV and finds only modest support for the RBV models. Variation of empirical results is subject to the particular operationalization of independent variable and theoretical approach employed. Future research can help enhance our understanding of the RBV framework by considering an extension of RBV coupled with any of the four theoretical approaches, namely, resource heterogeneity approach, organizing approach, conceptual-level approach (resource-performance relationship), and dynamic capability approach.

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The Origin of Resource-Based View of the Firm in Brief

In the seminal work on the resource-based view of the firm, Wernerfelt 1984 (cited under Resources in Organizations) explains the duality of the product and the resource perspectives in understanding firm performance. By assessing the product-market position of the firm, we can identify the relative share of competing firms in a market and the corresponding product differentiation benefits and product-market (value chain) activities that aim at maximizing market returns. Similarly, a resource-based view perspective suggests that a firm can identify and combine different types of resources to generate high returns in markets where the resources have a cost advantage. Most resources can be used as input in multiple products, but some resources have higher resource position barriers than others. A firm is said to have a high resource position barrier when certain types of its resources cannot be replicated or acquired easily by other firms but can be redeployed to new product markets in which the firm has a cost advantage. Thus, by understanding the strengths and weaknesses of the firm from a resource-based view, it is possible to determine the firm’s sustained competitive advantage, its first mover advantage in new markets, and optimal growth patterns. Barney 1991 (cited under Resources in Organizations) posits that firm resources can be exploited as sources of sustained competitive advantage when they meet four conditions: valuable, rare, costly to imitate, and non-substitutable. Under these conditions, strategic resources enable firms to implement value-creating strategies that cannot be duplicated by other firms more efficiently. Mahoney and Pandian 1992 shows that the resource-based view not only stimulates conversation within mainstream strategy research, organizational economics, and industrial organization research but also provides a framework for increased dialogue among these research perspectives. Peteraf 1993, Barney and Arikan 2001, Rugman and Verbeke 2002, and Kor and Mahoney 2000 have discussed the relative significance of the Penrosian and Ricardian roots of resource-based reasoning in determining a firm’s competitive advantage. The discourse on the contributions of seminal works in the strategy field to the modern resource-based thinking has shed light on important linkages among heterogeneity and imperfect imitability of resources, path dependencies in exploiting and building resources, and persistent firm performance differences. More recent review papers on RBV can be found in Armstrong and Shimizu 2007; Lockett, et al. 2009; Kraaijenbrink, et al. 2010; Barney, et al. 2011 (see Barney, et al. 2011, cited under Resources in Organizations). For the foundations on the resource-based view, see the separate Oxford Bibliographies article Strategy.

  • Armstrong, Craig E., and Katsuhiko Shimizu. “A Review of Approaches to Empirical Research on the Resource-Based View of the Firm.” Journal of Management 33.6 (2007): 959–986.

    DOI: 10.1177/0149206307307645Save Citation »Export Citation » Share Citation »

    This study reviews 125 empirical studies of the resource-based view (RBV) and examines methodological issues and new directions that will help clarify the value and boundaries of the RBV. It proposes an integrative framework for enhancing the boundary conditions of RBV theory.

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  • Barney, Jay B., and Asli M. Arikan. “The Resource-Based View: Origins and Implications.” In The Blackwell Handbook of Strategic Management. Edited by Michael A. Hitt, R. Edward Freeman, and Jeffrey S. Harrison, 124–188. Oxford: Blackwell, 2001.

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    This article presents the theoretical history of the resource-based view of the firm, its major theoretical insights, and how they differ from other explanations of persistent firm performance differences.

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  • Kor, Yasemin Y., and Joseph T. Mahoney. “Penrose’s Resource-Based Approach: The Process and Product of Research Creativity.” Journal of Management Studies 37.1 (2000): 109–139.

    DOI: 10.1111/1467–6486.00174Save Citation »Export Citation » Share Citation »

    Examines the importance of Penrosian arguments concerning linkages among resources, productive opportunities, and profitable firm growth, which contribute to the resource-based theory of competitive advantage.

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  • Kraaijenbrink, Jeroen, J.-C. Spender, and Aard J. Groen. “The Resource-Based View: A Review and Assessment of Its Critiques.” Journal of Management 36.1 (2010): 349–372.

    DOI: 10.1177/0149206309350775Save Citation »Export Citation » Share Citation »

    This article discusses seven critiques of RBV and finds three most limiting to the advancement of RBV. The three critiques stem from the indeterminate nature of two of the RBV’s basic concepts—resource and value—and the narrow conceptualization of a firm’s competitive advantage.

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  • Lockett, Andy, Steve Thompson, and Uta Morgenstern. “The Development of the Resource-Based View of the Firm: A Critical Appraisal.” International Journal of Management Reviews 11.1 (2009): 9–28.

    DOI: 10.1111/j.1468–2370.2008.00252.xSave Citation »Export Citation » Share Citation »

    This paper presents a critical appraisal of RBV in terms of theory, method, empirical evidence, and practical insights. It calls for future studies to advance our understanding of how firms or management develop and adapt resources or resource bundles that create sustained competitive advantage, and to add new theoretical insights by integrating RBV with existing theories in strategic management.

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  • Mahoney, Joseph T., and J. Rajendran Pandian. “The Resource-Based View Within the Conversation of Strategic Management.” Strategic Management Journal 13.5 (1992): 363–380.

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    This study discusses the generalizability, compatibility, and complementarity of the resource-based view of the firm across three fields of strategy, organizational economics, and industrial organization research through identifying isolating mechanisms that are derived from firm investments in unique and casually ambiguous resources.

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  • Peteraf, Margaret A. “The Cornerstones of Competitive Advantage: A Resource-Based View.” Strategic Management Journal 14.3 (1993): 179–191.

    DOI: 10.1002/smj.4250140303Save Citation »Export Citation » Share Citation »

    This article explains the economics of the resource-based view of the firm and the conditions under which heterogeneous resources can generate sustainable competitive advantage.

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  • Rugman, Alan M., and Alain Verbeke. “Edith Penrose’s Contribution to the Resource-Based View of Strategic Management.” Strategic Management Journal 23.8 (2002): 769–780.

    DOI: 10.1002/smj.240Save Citation »Export Citation » Share Citation »

    Investigates the distinctive contribution of Edith Penrose to the development of resource-based view and argues that Penrose’s thesis on the process of firm growth has been widely misinterpreted by strategy scholars.

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Management or Managerial Resources

Management resources are said to be most critical to firm growth (Penrose 1959). Castanias and Helfat 1991 highlights the importance of management resources by adding the role of management to the resource-based view of the firm. Accordingly, top management acquires firm-specific and industry-specific experiences and skills that produce managerial rents, and in turn these experiences and skills become key managerial resources in achieving sustained competitive advantage. Mahoney 1995 argues that managerial knowledge, competence, and expertise can determine the extent to which firm resources are transformed into unique and casually ambiguous sources of sustained competitive advantage. To extend our understanding of management resources, many scholars attempt to link the behavioral and cognitive approaches in organizational learning and dynamic capabilities to the resource-based view of the firm. Sirmon, et al. 2007 analyzes the managerial role in managing firm resources to create value in a dynamic environmental context. Managers are involved in acquiring and structuring resources into a resource portfolio and bundling resources into organizational capabilities that can be leveraged to create sustainable value. The process of resource management in turn is contingent upon the degrees of environmental uncertainty and munificence. Similarly, in international business, management resources play an important role in cross-country contexts. Tan and Meyer 2010 argues that a firm’s managerial resources and its context of operation can affect the firm’s outward FDI strategy. They find that internationalization is positively associated with managers’ international work experience but negatively associated with managers’ international education and local business networks. Sirmon, et al. 2011 offers an integrated framework of resource management and asset orchestration to illustrate a dynamic process of resource coordination and utilization. Asset orchestration considers a holistic view of managerial actions that attempt to coordinate and utilize firm resources across different firm strategies and over different lifecycle stages and management levels of the firm. The development of dynamic capabilities is thus contingent on the interaction and synchronization of managerial actions and firm resources. More research is needed to examine the configuration of resource portfolios that create sustained competitive advantage under various constraints of management resources and actions. Helfat and Martin 2014 provides a thorough review of dynamic managerial capabilities characterized by three primary management resources: managerial cognition, managerial social capital, and managerial human capital. These resources are said to interact and shape the formation and evolution of dynamic managerial capabilities inside a firm.

  • Castanias, Richard P., and Constance E. Helfat. “Managerial Resources and Rents.” Journal of Management 17.1 (1991): 155–171.

    DOI: 10.1177/014920639101700110Save Citation »Export Citation » Share Citation »

    Examines top management as a key resource of the firm and its implications on rent generation. Managerial resources may be superior in a particular context that attracts managerial rents, and at the same time firms can leverage these superior resources to create value.

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  • Helfat, Constance E., and Jeffrey A. Martin. “Dynamic Managerial Capabilities.” Journal of Management 41.5 (2014): 1281–1312.

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    This study offers a conceptual framework to clarify the role of dynamic managerial capabilities and then presents a thorough review of empirical studies that investigate the direct impact of dynamic managerial capabilities on strategic change and the performance consequences of strategic change attributable to managers.

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  • Mahoney, Joseph T. “The Management of Resources and the Resource of Management.” Journal of Business Research 33.2 (1995): 91–101.

    DOI: 10.1016/0148–2963(94)00060-RSave Citation »Export Citation » Share Citation »

    The theoretical study offers insights into the role of management resources and several directions for theory and empirical research development in strategic management discipline. Argues that management resources can be combined with other firm resources for productive use and rent generation.

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  • Penrose, E. T. The Theory of the Growth of the Firm. Oxford: Basil Blackwell, 1959.

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    One of the most influential books on economics and management, citing management resources as the most important resources critical to firm growth. Management possesses firm-specific knowledge that helps organize, coordinate, and deploy firm resources to support a firm’s productive activities and innovation. The same management knowledge also presents constraints that limit a firm’s capacity to learn, innovate, and diversify.

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  • Sirmon, David G., Michael A. Hitt, and R. Duane Ireland. “Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box.” Academy of Management Review 32.1 (2007): 273–292.

    DOI: 10.5465/AMR.2007.23466005Save Citation »Export Citation » Share Citation »

    This paper extends and links the resource-based view of the firm to resource management and dynamic environmental contexts. Several propositions are developed to explain how environments affect the process of managing resources and exploiting new opportunities.

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  • Sirmon, David G., Michael A. Hitt, and R. Duane Ireland, and Brett A. Gilbert. “Resource Orchestration to Create Competitive Advantage: Breadth, Depth, and Life Cycle Effects.” Journal of Management 37.5 (2011): 1390–1412.

    DOI: 10.1177/0149206310385695Save Citation »Export Citation » Share Citation »

    This study introduces a “dynamic capabilities” view of resource management by combining resource management with the concept of asset orchestration. The new perspective expands our understanding of how management capabilities coordinate and bundle resources to create value in response to changing environments.

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  • Tan, Danchi, and Klaus E. Meyer. “Business Groups’ Outward FDI: A Managerial Resources Perspective.” Journal of International Management 16.2 (2010): 154–164.

    DOI: 10.1016/j.intman.2010.03.006Save Citation »Export Citation » Share Citation »

    This paper argues that internationally valuable managerial resources are more likely to drive a firm’s internationalization strategy. The empirical findings suggest that managerial experience and capabilities developed abroad have a positive impact on the foreign over total ratio in terms of sales, employment, assets, and subsidiaries.

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Financial Resources and Entrepreneurial Financing

In management research financial resources have been traditionally linked to corporate strategy, in particular when examining why and when firms diversify into related or unrelated business. Firms need to have enough financial strength to enter a strategic factor market by mergers or acquisitions and compete for strategic resources (Kochhar and Hitt 1998). Barney 1986 argues that firms with different financial strengths typically reflect their differences in the expectations about the future value of strategies they plan to implement. Kochhar and Hitt 1998 shows that equity financing is preferred for related diversification whereas debt financing is for unrelated diversification. In addition, firms diversifying through acquisitions are more likely to use public sources of financing, and those emphasizing internal development of new businesses depend primarily on private sources of financing. Over the last three decades, more research has focused on the contribution of financial resources to entrepreneurial startups. Financial resources for startups can be accessed through tradition debt and equity financing such as venture capital investments, angel investments, corporate venture capital investments, and banks. In a specific issue on entrepreneurial finance, Bruton, et al. 2015 claims that startups increasingly turn to new alternative financing mechanisms such as crowdfunding, microfinance, and peer-to-peer lending. They show that institutional contexts play an important role in determining the emergence and adoption of these new financing mechanisms in both developed and developing economies. In another special issue, Bellavitis, et al. 2017 discusses some challenges in studying entrepreneurial finances and calls for more research to evaluate how various new and/or traditional sources of financing interact and how different combinations support or harm entrepreneurial ventures. Drover, et al. 2017 provides an analysis of venture financing articles that were published in sixteen leading journals from 1980 to 2016 and a review of the antecedents, process, and impact of multiple types of entrepreneurial financing mechanisms at the individual, firm, and market levels. The review calls for more research into the sources of heterogeneity among equity investors as well as important interactions across these different categories of investors.

  • Barney, Jay B. “Strategic Factor Markets: Expectations, Luck, and Business Strategy.” Management Science 32.10 (1986): 1231–1241.

    DOI: 10.1287/mnsc.32.10.1231Save Citation »Export Citation » Share Citation »

    Barney introduces the concept of a strategic factor market, where the necessary resources to implement a strategy can be acquired. He argues that strategic factor markets are imperfectly competitive because firms tend to have different expectations about the future return of a strategic resource.

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  • Bellavitis, Cristiano, Igor Filatotchev, Dzidziso Samuel Kamuriwo, and Tom Vanacker. “Entrepreneurial Finance: New Frontiers of Research and Practice: Editorial for the Special Issue Embracing Entrepreneurial Funding Innovations.” Venture Capital 19.1–2 (2017): 1–16.

    DOI: 10.1080/13691066.2016.1259733Save Citation »Export Citation » Share Citation »

    This paper introduces the special issue on entrepreneurial finance that explores both traditional and new sources of finance. The editors identify both theoretical and empirical challenges that these sources present to entrepreneurship scholars and call for more theory building in future research.

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  • Bruton, Garry, Susanna Khavul, Donald Siegel, and Mike Wright. “New Financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer-to-Peer Innovations.” Entrepreneurship Theory and Practice 39.1 (2015): 9–26.

    DOI: 10.1111/etap.12143Save Citation »Export Citation » Share Citation »

    This is an editorial introduction to the special issue of the journal on the topic of new entrepreneurial financing options. The editors assess the emerging field of research and develop a research agenda to encourage more systematic investigation of these alternative sources of financing at the macro, organizational, and individual levels.

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  • Drover, Will, Lowell Busenitz, Sharon Matusik, David Townsend, Aaron Anglin, and Gary Dushnitsky. “A Review and Road Map of Entrepreneurial Equity Financing Research: Venture Capital, Corporate Venture Capital, Angel Investment, Crowdfunding, and Accelerators.” Journal of Management 43.6 (2017): 1820–1853.

    DOI: 10.1177/0149206317690584Save Citation »Export Citation » Share Citation »

    This study provides an overview of past and present research on entrepreneurial equity financing and finds that substantial studies have focused on the under-socialized perspective of equity financing process. The study concludes with a recommendation for future research to investigate how entrepreneurs and investors interact and make decisions regarding the presence of multiple funding mechanisms at different stages of venture development.

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  • Kochhar, Rahul, and Michael A. Hitt. “Linking Corporate Strategy to Capital Structure: Diversification Strategy, Type and Source of Financing.” Strategic Management Journal 19.6 (1998): 601–610.

    DOI: 10.1002/(SICI)1097–0266(199806)19:6<601::AID-SMJ961>3.0.CO;2-MSave Citation »Export Citation » Share Citation »

    This study investigates the relationship between diversification decisions and the characteristics of funds used to finance such decisions, namely, the type of funds (debt versus equity) and the source of funds (private versus public).

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Human Resources

Extensive research has documented a positive relationship between human resource (HR) practices and firm or unit performance. Wright, et al. 2001 reviews several key studies with a focus on the theoretical and empirical development of strategic human resource management (SHRM) from an RBV perspective. They propose a framework to show how SHRM can be the mechanism that contributes to the development of core competencies, knowledge, and dynamic capabilities of the firm. They call for future HR studies to examine the strategic implications of HR functions, especially the development of employee skills and knowledge, employee relationships and behaviors, and the confluence of multiple HR practices. Koch and McGrath 1996 finds that investments in HR planning, recruitment and employee development have positive and significant effects on labor productivity. Moreover, the respective effects are more pronounced in capital intensive organizations. Collins and Clark 2003 argues that HR practices such as mentoring, incentives, and performance appraisals can be designed to support the development of top management team (TMT) social networks—both internal and external networks—to sustain a firm’s competitive advantage. In another study, Collins and Smith 2006 shows that commitment-based HR practices, which focus on mutual, long-term exchange relationships, have an influence on organizational social climate that motivates employees to generate new knowledge to improve firm performance. Gong, et al. 2009 shows that performance-oriented HR subsystems have a positive influence on firm performance via middle managers’ affective commitment to the firm, whereas maintenance-oriented HR subsystems have only a positive effect on middle managers’ continuance commitment to the firm. In a conceptual framework, Evans and Davis 2005 proposes that high-performance work systems in organizations can be conceived as a system of HR practices, each of which has a differential relationship with a different characteristic of the internal social structure of the firm such as bridging ties, norms of reciprocity, shared mental models, role making, and organizational citizenship behavior. Extensive works have been done in HRM, but not all studies research the direct implications of SHRM on firm strategy and performance.

  • Collins, Christopher J., and Kevin D. Clark. “Strategic Human Resource Practices, Top Management Team Social Networks, and Firm Performance: The Role of Human Resource Practices in Creating Organizational Competitive Advantage.” Academy of Management Journal 46.6 (2003): 740–751.

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    Conducts a field study with seventy-three high-technology firms and finds support for the mediating role of top managers’ social networks between the HR practices and firm performance (sales growth and stock growth).

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  • Collins, Christopher J., and Ken G. Smith. “Knowledge Exchange and Combination: The Role of Human Resource Practices in the Performance of High-Technology Firms.” Academy of Management Journal 49.3 (2006): 544–560.

    DOI: 10.5465/amj.2006.21794671Save Citation »Export Citation » Share Citation »

    Shows that commitment-based HR practices have an indirect influence on knowledge exchange and combination through supporting organizational social climate.

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  • Evans, W. Randy, and Walter D. Davis. “High-Performance Work Systems and Organizational Performance: The Mediating Role of Internal Social Structure.” Journal of Management 31.5 (2005): 758–775.

    DOI: 10.1177/0149206305279370Save Citation »Export Citation » Share Citation »

    The article develops a conceptual framework to illustrate how HR practices that comprise high-performance work systems can influence organization performance via multiple intervening mechanisms associated with the internal structure of the firm.

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  • Gong, Yaping, Kenneth S. Law, Song Chang, and Katherine R. Xin. “Human Resources Management and Firm Performance: The Differential Role of Managerial Affective and Continuance Commitment.” Journal of Applied Psychology 94.1 (2009): 263–275.

    DOI: 10.1037/a0013116Save Citation »Export Citation » Share Citation »

    This study attempts to explain the differential effects of two HR subsystems—performance oriented and maintenance oriented—on middle managers’ affective and continuing commitment to the firm and how they relate to firm performance.

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  • Koch, Marianne, and Rita Gunther McGrath. “Improving Labor Productivity: Human Resource Management Policies Do Matter.” Strategic Management Journal 17 (1996): 335–354.

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    This study is among the early studies that treat human resource management as mechanisms for developing human capital into strategic assets of the firm. The authors argue that a firm’s investments in HR planning, hiring, and development are important means for gaining competitive advantage.

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  • Wright, Patrick M., Benjamin B. Dunford, and Scott A. Snell. “Human Resources and the Resource Based View of the Firm.” Journal of Management 27 (2001): 701–721.

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    This review article explores the convergence of strategy and strategic human resource management (HRM) and finds the resource-based view a useful framework to explain the strategic role of human capital and HR systems in influencing the competencies of the firm. HRM could serve as the foundation upon which unique, causally ambiguous, and synergistic combination of HR capital and HR relationships can be developed to create sustained competitive advantage.

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R&D Resources

The most cited resources in the research and development (R&D) function of the firm are knowledge and technologies. Nelson and Winter 1977 argues that much of a firm’s R&D function can be conceptualized as a set of heuristic search and selection activities guided by scientific knowledge. Nelson and Winter 1982 further proposes that a firm’s knowledge base is built on organizational routines that entail the mechanisms of variation, selection, and retention. These routines are said to be a source of knowledge building, competence development, as well as path dependency. Subsequent works show that the emergence of firm resources, especially the production of firm knowledge, tends to follow an evolutionary process that results in heterogeneous resources and capabilities. Helfat 1997 identifies a firm’s new technological knowledge, accumulated knowledge base, and physical assets in a specific technological field as complementary resources that determine the intensity of R&D spending in that field. In explaining the origin of resource creation, Ahuja and Katila 2004 finds that firms engage in path-creating knowledge search in response to idiosyncratic situations due to technology exhaustion and international product-market expansion. In contrast, Argyres and Silverman 2004 shows that a firm’s R&D organizational structure and budget authority can influence the breadth of technological search and innovation outcome. Centralized R&D firms appear to conduct technological searches outside of their organizational boundaries more widely than decentralized R&D firms do. More recent research examines how firms create and access new knowledge and emerging technologies within and across firm boundaries. Nerkar and Paruchuri 2005 suggests that the attributes of intraorganizational networks of firm inventors determine the choices of knowledge selected for recombination. They argue that R&D knowledge resides in the groups of inventors and can be connected by recombination routines. Carnabuci and Operti 2013 classifies R&D capabilities into two types of recombinant capabilities: (1) recombinant creation—creating technological recombinations new to the firm; and (2) recombinant reuse—reconfiguring combinations already known to the firm. They find that the degree of integration of a firm’s intraorganizational network and the diversity of its knowledge base can affect the use of one or both capabilities in the process of innovation. Soh and Subramanian 2014 proposes that in science-based business, R&D capabilities can be distinguished by their focus on scientific research and technological recombination. They show that these R&D capabilities influence the extent of benefits a firm can gain from accessing external academic knowledge via university collaboration.

  • Ahuja, Gautam, and Riitta Katila. “Where Do Resources Come from? The Role of Idiosyncratic Situations.” Strategic Management Journal 25.8–9 (2004): 887–907.

    DOI: 10.1002/smj.401Save Citation »Export Citation » Share Citation »

    The research departs from existing work on strategic resources and examines the antecedents and consequences of resource heterogeneity underpinning firm performance difference from an evolutionary perspective. It demonstrates that unique knowledge-based resources could be accessed and combined from the intersection of science-technology domains and across geographical boundaries.

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  • Argyres, Nicholas S., and Brian S. Silverman. “R&D, Organization Structure, and the Development of Corporate Technological Knowledge.” Strategic Management Journal 25.8–9 (2004): 929–958.

    DOI: 10.1002/smj.387Save Citation »Export Citation » Share Citation »

    Examines the influence of R&D organization in terms of centralization and decentralization of R&D functions on different innovation outcomes.

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  • Carnabuci, Gianluca, and Elisa Operti. “Where Do Firms’ Recombinant Capabilities Come from? Intraorganizational Networks, Knowledge, and Firms’ Ability to Innovate through Technological Recombination.” Strategic Management Journal 34.13 (2013): 1591–1613.

    DOI: 10.1002/smj.2084Save Citation »Export Citation » Share Citation »

    The study refers to the concept of recombinant capabilities as a firm’s ability to create new technological combinations or to reconfigure existing technological combinations. The authors argue that recombinant capabilities come from the networks of firm inventors and the diverse knowledge structure of the firm.

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  • Helfat, Constance E. “Know-How and Asset Complementarity and Dynamic Capability Accumulation: The Case of R&D.” Strategic Management Journal 18.5 (1997): 339–360.

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    This study finds a strong correlation between the complementary resources of the firm and R&D intensity. It argues that a firm’s dynamic capabilities are formed by the cumulated knowledge and experience in utilizing technological assets to develop new products.

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  • Nelson, R., and Sidney G. Winter. “In Search of Useful Theory of Innovation.” Research Policy 6.1 (1977): 36–76.

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    This is one of the early works that presents a theory of innovation to explain the heterogeneity of firm performance and the uneven productivity growth across industrial sectors. The aim of the thesis is to provide guidance for policymakers.

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  • Nelson, R. R., and S. G. Winter. An Evolutionary Theory of Economic Change. Cambridge, MA: Belknap Press of Harvard University Press, 1982.

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    This book contains a pioneering work on the evolutionary theory that explains how industries and firms change over time. It criticizes the neoclassical assumptions of profit maximization and market equilibrium for undermining the ability of the firm to search, innovate, and adapt. The book proposes a behavioral approach to explain the development of decision rules and capabilities inside a firm.

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  • Nerkar, Atul, and Srikanth Paruchuri. “Evolution of R&D Capabilities: The Role of Knowledge Networks Within a Firm.” Management Science 51.5 (2005): 771–785.

    DOI: 10.1287/mnsc.1040.0354Save Citation »Export Citation » Share Citation »

    The authors argue that the positions of firm inventors in an intraorganizational knowledge network will influence the selection of the inventors’ knowledge by other inventors. The evolution of knowledge use in an organization thus results in specialization of R&D.

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  • Soh, Pek-Hooi, and Annapoornima M. Subramanian. “When Do Firms Benefit From University–Industry R&D Collaborations? The Implications of Firm R&D Focus on Scientific Research and Technological Recombination.” Journal of Business Venturing 29.6 (2014): 807–821.

    DOI: 10.1016/j.jbusvent.2013.11.001Save Citation »Export Citation » Share Citation »

    Based on the literature of knowledge transfer in interorganizational contexts, the study argues that a firm’s R&D strength in the respective focus of scientific research and technological recombination will influence the firm’s ability to access and acquire academic discoveries and knowledge from university collaborations.

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Marketing Resources

Marketing resources that are most well covered in marketing strategy literature are brand capital, market knowledge, and customer relations. The resource-advantage theory of competition by Hunt and Morgan 1996 emerges as an important stream of marketing research that explicitly makes a connection between the comparative advantage of tangible and intangible resources and business strategy that drives firm performance. Subsequent research building on this theory has investigated the role of strategic resources arising from the activities of marketing in sustaining a firm’s competitive advantage. In one of the early studies on marketing resources, Capron and Hulland 1999 describes sales forces and brands as relational, intangible assets built upon relationships between focal firm and external stakeholders, whereas general marketing expertise is a knowledge-based resource that is also a source of competence or capability. In their survey study, Capron and Hulland 1999 finds that following horizontal acquisitions, acquiring firms are more likely to redeploy highly immobile resources than less immobile resources to acquired firms. Kozlenkova, et al. 2014 finds that many contemporary works in marketing pay more attention to these intangible resources, whose effects on firm performance may be greater than the effects of tangible resources. They further identify a list of marketing resources that have been studied using resource-based theory in marketing literature. Using a survey research method, Hooley, et al. 2005 measures a list of assets and capabilities typically deployed for marketing strategy. They also make a distinction between market-based resources that have direct effects on competitive advantage and marketing support resources that serve as support activities and have indirect effects on competitive advantage. Using blueprinting and benchmarking methods, Ceric, et al. 2016 demonstrates the process of identifying resources that are specific to co-creating customer value. Davcik and Sharma 2016 shows that most marketing studies have found a positive influence of marketing resources and capabilities on firm performance.

  • Capron, Laurence, and John Hulland. “Redeployment of Brands, Sales Forces, and General Marketing Management Expertise Following Horizontal Acquisitions: A Resource-Based View.” Journal of Marketing 63 (1999): 41–54.

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    This study attempts to analyze three types of intangible marketing resources and their variations in redeployment between target and acquiring firms following 253 horizontal acquisitions. They find that the greater the extent of redeployment, the greater the positive impact on post-merger performance will be.

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  • Ceric, Arnela, Steven D’Alessandro, Geoff Soutar, and Lester Johnson. “Using Blueprinting and Benchmarking to Identify Marketing Resources That Help Co-Create Customer Value.” Journal of Business Research 69.12 (2016): 5653–5661.

    DOI: 10.1016/j.jbusres.2016.03.073Save Citation »Export Citation » Share Citation »

    This study suggests using service blueprinting and benchmarking methods to identify resources and capabilities that are critical to creating and delivering customer value in service management.

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  • Davcik, Nebojsa S., and Piyush Sharma. “Marketing Resources, Performance, and Competitive Advantage: A Review and Future Research Directions.” Journal of Business Research 69.12 (2016): 5547–5552.

    DOI: 10.1016/j.jbusres.2016.04.169Save Citation »Export Citation » Share Citation »

    The editors of a special issue of the Journal of Business Research present three main research streams related to marketing resources and performance. The first area is the relation of firm and/or brand to its environment. The second area is the performance effects of marketing as a function in a firm. The third area is the identification and deployment of marketing resources and their effects on performance.

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  • Hooley, Graham J., Gordon E. Greenley, John W. Cadogan, and John Fahy. “The Performance Impact of Marketing Resources.” Journal of Business Research 58.1 (2005): 18–27.

    DOI: 10.1016/S0148–2963(03)00109–7Save Citation »Export Citation » Share Citation »

    This paper develops new scale items for measuring marketing resources and assessing their impact on financial performance. The findings show that marketing resources affect financial performance indirectly through creating customer satisfaction and loyalty and building superior market performance.

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  • Hunt, Shelby D., and Robert M. Morgan. “The Resource-Advantage Theory of Competition: Dynamics, Path Dependencies, and Evolutionary Dimensions.” Journal of Marketing 60.4 (1996): 107–114.

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    This article represents an early work in the marketing literature that extends the theory of RBV to understand how firms can create a competitive market position based on the comparative advantage of resources.

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  • Kozlenkova, Irina V., Stephen A. Samaha, and Robert W. Palmatier. “Resource-Based Theory in Marketing.” Journal of the Academy of Marketing Science 42.1 (2014): 1–21.

    DOI: 10.1007/s11747-013-0336-7Save Citation »Export Citation » Share Citation »

    This paper provides an extensive review on marketing literature that has widely adopted the resource-based theory (RBT). The review shows that RBT provides an important framework for explaining how firms deploy marketing resources for achieving competitive advantage.

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Other Resources

Slack resources (also known as organizational slack) and network resources have long been studied as other types of important resources in management research, whose instrumental roles are less central to the major functions of the firm. Slack resources are known as excess or surplus resources that are not in use in current business but may buffer firms from environmental jolts. Firms deploy slack resources to manage emerging opportunities and unforeseeable threats in the environment. In a meta-analysis, Daniel, et al. 2004 finds evidence to support the positive influences of three types of slack resources—namely available, recoverable, and potential slack—on the financial performance of the firm. George 2005 investigates the relationship between different forms of financial slack and the performance of privately held firms. He argues that firms with more resource constraints are likely to leverage them more efficiently. For over twenty years, a large body of research has examined the determinants and impact of network resources on various organizational outcomes. Network resources come from a network of interfirm relationships, and the amount of network benefits accrued to a firm are contingent on the structural and relational attributes of the network. Gulati 1999 and McEvily and Zaheer 1999 argue that network resources are important external sources of a firm’s competitive capabilities. These studies find that variation of firm performance in a particular industrial or regional context can be explained by a firm’s bridging ties, which give rise to unique information, knowledge, and opportunities.

  • Daniel, Francis, Franz T. Lohrke, Charles J. Fornaciari, and R. Andrew Turner. “Slack Resources and Firm Performance: A Meta-Analysis.” Journal of Business Research 57.6 (2004): 565–574.

    DOI: 10.1016/S0148-2963(02)00439-3Save Citation »Export Citation » Share Citation »

    This study conducts a meta-analysis of the relationship between slack resources and firm performance and finds strong supporting evidence for the positive influences of three types of organizational slack.

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  • George, Gerard. “Slack Resources and the Performance of Privately Held Firms.” Academy of Management Journal 48.4 (2005): 661–676.

    DOI: 10.5465/amj.2005.17843944Save Citation »Export Citation » Share Citation »

    This study finds that different forms of slack resources have different impacts on a firm’s financial performance and that the slack-performance relationship is moderated by firm age and industrial complexity.

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  • Gulati, Ranjay. “Network Location and Learning: The Influence of Network Resources and Firm Capabilities on Alliance Formation.” Strategic Management Journal 20.5 (1999): 397–420.

    DOI: 10.2307/3094162Save Citation »Export Citation » Share Citation »

    This study shows that network resources have an effect on a firm’s alliance formation behavior. Network resources are derived from a firm’s participation and location in an alliance network. Network resources provide information advantages about potential partners and in turn influence a firm’s strategic behavior and future alliance formation.

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  • McEvily, Bill, and Akbar Zaheer. “Bridging Ties: A Source of Firm Heterogeneity in Competitive Capabilities.” Strategic Management Journal (1999) 20.12: 1133–1156.

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    This study proposes that a firm’s internal capabilities can be supplemented by its external network of bridging ties that facilitate knowledge sharing with regional institutions, leading to the development of heterogeneous competitive capabilities.

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