Session 169

Unpacking Sources of Heterogeneity: Market Frictions, Firm Resources, Strategic Actions

Track E

Date: Tuesday, October 13, 2009


Time: 14:30 – 15:45


Room: Meeting Room 4

Session Chair:
Alfonso Gambardella, Bocconi University

Title: How Resources and Actions Impact Performance: A Mediated Relationship


  • David Major, Indiana University
  • Ken Smith, University of Rhode Island
  • Curtis Grimm, University of Maryland
  • Richard D'Aveni, Dartmouth College

Abstract: Resource-based logic suggests that valuable, rare, inimitable, and non-substitutable resources have the potential for enduring impact on performance, though it is still unclear how. Expressly, how resources, through strategic actions, generate performance for a firm is yet underexplored. This study tests direct and indirect effects of firm resources and actions on performance. Using RBV and competitive dynamics, it examines the extent to which firm resources and actions each directly predict variation in performance; and the extent to which firm resources predict variation in intervening actions and thereby predict variation in performance. The study sheds new light on the resource-performance “black box” using a ten-year, longitudinal sample drawn from the US automobile market – consisting of 980 model-years of resource stocks and 3,439 firm actions.

Title: Market Frictions, Governance and Economic Rents: Taking Stock and Looking Ahead


  • Joseph Mahoney, University of Illinois at Urbana-Champaign
  • Lihong Qian, Portland State University

Abstract: This paper reaches towards developing a more unified theoretical framework within the strategic management field. We begin with the useful benchmark of perfect markets derived from the first fundamental welfare theorem of economics, and from this framework, develop a parsimonious typology of market frictions. We show how the two essential questions in the strategic management field --- why firms exist and why some firms outperform others --- can be evaluated from our market frictions logic. We further discuss how several organizational economics theories can be usefully joined by utilizing this logic. Moreover, we suggest that building on this logic will facilitate more systematic ways in which our explanations of governance structures and economic rents can be developed in the next generation of strategic management research.

Title: Uncertainty and Value Appropriation: An Assessment of Resource-Based Theory


  • Niklas Hallberg, Lund University

Abstract: This paper addresses the notion of uncertainty in resource-based theory by examining value appropriation as a cause of profit differentials among firms. It is shown that assumptions made within resource-based theory concerning the level of uncertainty in factor and product markets challenges the theory’s internal consistency and limits its ability to explain how economic value is distributed between seller and buyer. This paper suggests that integrating more elaborate notions of agency and uncertainty with resource-based theory has the potential of remedying some of these limitations.

Title: Using the "Other" Penrose to Understand Internal Sources of Competitive Heterogeneity


  • Norman T Sheehan, University of Saskatchewan
  • Nicolai Foss, Bocconi University

Abstract: In her seminal book, Penrose (1959: 25) famously argued that “[t]he services yielded by resources are a function of the way they are used.” While interpretations tend to focus on the administrative framework in which resources are embedded, a different interpretation relates to the way resources are linked. This paper follows the path laid by the “other” Penrose to look for additional internal sources of performance differences. We argue that the “other” Penrose is best represented by the Porterian construct of “activities.” Activity configurations are not only important when the firm possesses unique, inimitable resources, but they can also generate performance differentials with the same resource endowments. A point anticipated, but not developed at any length by Porter (1996). If the RBV is to increase its explanatory power, it also needs to consider the role activity configurations play in creating sustained performance differentials.

All Sessions in Track E...

Sun: 10:00 – 11:30
Session 256: Discipline Based Theories: What Do Theories of the Firm Say About Organizational Dynamics
Sun: 13:00 – 14:30
Session 257: Applying Theories: What Does Strategy & Organization Say About Health Care?
Sun: 15:00 – 16:30
Session 258: Integrating Theories of Problem Formation
Sun: 16:30 – 17:30
Session 309: Competitive Strategy, IG Meeting
Mon: 12:45 – 14:00
Session 159: Strategic Factor Markets: Antecedents, Consequences and Dynamics
Session 166: Competitive Strategy and the Business of Science
Mon: 15:45 – 17:00
Session 160: Emerging Strategies in Acquisition
Session 220: Contemporary Challenges to Organization Theory
Mon: 17:15 – 18:30
Session 157: Managerial Cognition and Dynamic Capabilities at the Crossroads: Current Issues and Novel Strands of Development
Session 222: Challenging Traditional Notions of Competitive Strategies and Competitive Advantage
Tue: 10:00 – 11:15
Session 161: Demand-based Approaches to Strategy: The Role of Customers and Communities
Session 163: Resources and Capabilities to Strengthen Alliance Formation and Execution
Tue: 11:30 – 12:45
Session 164: Competitive Strategy and Firm Performance
Session 165: Emerging Organizational Solutions for Exploration Strategies
Tue: 14:30 – 15:45
Session 158: Strategic Change and Dynamic Capabilities
Session 169: Unpacking Sources of Heterogeneity: Market Frictions, Firm Resources, Strategic Actions
Wed: 10:00 – 11:15
Session 216: Industry Evolution and Resource Architecture
Session 217: Designing Organizations to Sustain Performance
Wed: 11:30 – 12:45
Session 214: Managerial Capabilities and the Microfoundations of Strategy

Strategic Management Society

Washington DC