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Journal ArticleDOI

Resource Allocation as an Outcropping of Strategic Consistency: Performance Implications

TL;DR: Similarities in financial resource allocations across the lines of business of diversified firms may indicate corporate strategic consistency, which may lead to superior corporate performance as discussed by the authors. But, as discussed in Section 2.
Abstract: Similarities in financial resource allocations across the lines of business of diversified firms may indicate corporate strategic consistency, which may lead to superior corporate performance. In s...
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Journal ArticleDOI
TL;DR: In this paper , the effects of international expansion on domestic growth in family firms (FFs) versus non-FFs were examined. And they found that FFs are less prone to substitute home businesses with foreign activities and more likely to move back resources to foster domestic growth.
Abstract: This study examines the effects of international expansion on domestic growth in family firms (FFs) versus non-FFs. Integrating international business research into socioemotional wealth (SEW) theory, we argue that FFs seek to compensate for SEW losses (as implied by foreign direct investments) with SEW gains (associated with domestic growth). We claim that FFs are less prone to substitute home businesses with foreign activities and more likely to move back resources to foster domestic growth. Geographical diversification and modes of entry foster FFs’ domestic growth to an even greater extent. A test conducted on Italian firms supports these hypothesized effects.

1 citations

Journal ArticleDOI
TL;DR: In this paper , the authors analyzed the influence of franchisor characteristics on diversification and how the characteristics of the franchisors affect diversification according to the number of franchise brands owned by the company.
Abstract: Purpose: Diversification is a strategy to secure competitive advantage, improve performance, and survive. Diversification studies have been conducted in various fields such as motivation and performance. Diversification is actively taking place in the franchise industry, but research on the diversification of franchisor is lacking. Therefore, in this study, we analyzed the influence of franchisor characteristics on diversification and how the characteristics of franchisors affect diversification according to the number of franchise brands owned by the franchisor. Furthermore, the impact of the diversification of franchisor on performance was analyzed. Research design, data, and methodology: Regression analysis was conducted to analyze the effect of franchise characteristics on franchisor diversification. Next, in the effect of franchise characteristics on diversification, the moderating effect of the number of franchise brands owned by the franchisor was analyzed. In addition, the impact of the diversification of franchisor on performance was analyzed. As an additional analysis, the characteristics of franchisor according to the survival period of franchise brands and the difference in average sales of existing and new franchise brands after franchise brand expansion were compared. For this purpose, the information disclosure data from 2015 to 2020 registered for franchise business transactions with the Fair Trade Commission was used and analyzed. Results: As a result of a regression analysis to confirm the effect of franchisor
Journal ArticleDOI
TL;DR: In this paper , the authors investigate how entrepreneurial orientation influences a firm's differentiation and performance indirectly through dynamic capabilities, while also investigating the impact of the interactive effect of the level and consistency of entrepreneurial orientation on dynamic capabilities.
Abstract: Purpose This research aims to investigate how entrepreneurial orientation influences a firm’s differentiation–cost advantage ambidexterity (DCAA) and performance indirectly through dynamic capabilities, while also investigating the impact of the interactive effect of the level and consistency of entrepreneurial orientation on dynamic capabilities. The goal of this study is to better understand the importance of consistently following an entrepreneurial orientation, as well as the linkage of such a consistently implemented strategy upon gaining both a cost and differentiation positioning enhancement. Design/methodology/approach Two empirical studies are conducted to test the proposed hypotheses – one longitudinal with multiple forms of data (i.e. text data, survey data and archival data) from 100 Taiwanese electronics firms and the other using primary data from a survey of senior managers. Findings Entrepreneurial orientation improves dynamic capabilities, which in turn promote superior DCAA and enhanced firm performance. In addition, as captured through a unique measure of consistency allowed through computer-aided text analysis, the results indicate that the effect of entrepreneurial orientation on dynamic capabilities is amplified when a firm consistently adopts entrepreneurial decisions and actions. Research limitations/implications The specific context was a sample of electronics firms in Taiwan. This limits the generalization of findings, as would be possible with assessing the hypotheses in other industries. Practical implications This research clearly demonstrates the significance of consistency in pursuing a strategic orientation. The consistent support and deployment of resources facilitates an organization’s achieving positive outcomes associated with an entrepreneurial orientation. Originality/value While entrepreneurial orientation contributes to firm performance, extant knowledge on the internal process through which entrepreneurial orientation affects performance is relatively limited. The findings not only highlight the full mediating role of dynamic capabilities and DCAA, but also shed light on the importance of consistency in entrepreneurial orientation over time.
References
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Book ChapterDOI
TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.

46,648 citations


Additional excerpts

  • ...Causal ambiguity exists when the relationship between the resources a firm controls and the profits they create are imperfectly understood (Barney, 1991)....

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  • ...A Resource-based Perspective on Diversification From a resource-based view, business executives should manage diversified resources so as to achieve a sustainable competitive advantage (Barney, 1991), which should lead to short- and long-term economic profits (Mahoney & Pandian, 1992)....

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  • ...A key issue in determining whether a resource can generate profits is whether it is idiosyncratic (Barney, 1991; Mahoney & Pandian, 1992)....

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Journal ArticleDOI
TL;DR: In this paper, the authors explore the usefulness of analyzing firms from the resource side rather than from the product side, in analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested.
Abstract: Summary The paper explores the usefulness of analysing firms from the resource side rather than from the product side. In analogy to entry barriers and growth-share matrices, the concepts of resource position barrier and resource-product matrices are suggested. These tools are then used to highlight the new strategic options which naturally emerge from the resource perspective.

18,677 citations


Additional excerpts

  • ...The purpose of this article is to present theory and empirical evidence that support a resource-based view of the relationship between diversification and performance (Barney, 1988; Harrison, Hitt, Hoskisson, & Ireland, 1991; Mahoney & Pandian, 1992; Wernerfelt, 1984)....

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  • ...The findings reported herein lend some support to the viability of a resource-based approach to the study of diversity (Harrison et al., 1991; Mahoney & Pandian, 1992; Wernerfelt, 1984)....

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01 Jan 1998
TL;DR: Porter's concept of the value chain disaggregates a company into "activities", or the discrete functions or processes that represent the elemental building blocks of competitive advantage as discussed by the authors, has become an essential part of international business thinking, taking strategy from broad vision to an internally consistent configuration of activities.
Abstract: COMPETITIVE ADVANTAGE introduces a whole new way of understanding what a firm does. Porter's groundbreaking concept of the value chain disaggregates a company into 'activities', or the discrete functions or processes that represent the elemental building blocks of competitive advantage. Now an essential part of international business thinking, COMPETITIVE ADVANTAGE takes strategy from broad vision to an internally consistent configuration of activities. Its powerful framework provides the tools to understand the drivers of cost and a company's relative cost position. Porter's value chain enables managers to isolate the underlying sources of buyer value that will command a premium price, and the reasons why one product or service substitutes for another. He shows how competitive advantage lies not only in activities themselves but in the way activities relate to each other, to supplier activities, and to customer activities. That the phrases 'competitive advantage' and 'sustainable competitive advantage' have become commonplace is testimony to the power of Porter's ideas. COMPETITIVE ADVANTAGE has guided countless companies, business school students, and scholars in understanding the roots of competition. Porter's work captures the extraordinary complexity of competition in a way that makes strategy both concrete and actionable.

17,979 citations


"Resource Allocation as an Outcroppi..." refers background in this paper

  • ...For example, it is possible for two companies to produce the same product but have very different perspectives on the usefulness of research and development in the way it is produced (Porter, 1985)....

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Book
01 Jan 1959
TL;DR: In this article, the authors studied the role of large and small firms in a growing economy and found that large firms are more likely to acquire and merge smaller firms in order to increase their size.
Abstract: Introduction Preface 1. Introduction 2. The Firm in Theory 3. The Productive Opportunity of the Firm and the 'Entrepreneur' 4. Expansion Without Merger: The Receding Managerial Limit 5. 'Inherited' Resources and the Direction of Expansion 6. The Economies of Size and the Economies of Growth 7. The Economics of Diversification 8. Expansion Through Acquisition and Merger 9. The Rate of Growth of Firms Through Time 10. The Position of Large and Small Firms in a Growing Economy 11. Growing Firms in a Growing Economy: The Process of Industrial Concentration and the Pattern of Dominance

14,137 citations

Book
01 Jan 1983

13,643 citations


Additional excerpts

  • ...Barney classified firm resources into three types: physical (Williamson, 1975), human (Becker, 1964), and organizational (Tomer, 1987)....

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  • ...From a transaction-cost-economics perspective, the question is whether the advantages related-diversified firms gain can be just as easily obtained by their competitors as they trade goods and services in an open market (Teece, 1984; Williamson, 1975)....

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