Resource Allocation as an Outcropping of Strategic Consistency: Performance Implications

doi:10.2307/256644

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Resource Allocation as an Outcropping of Strategic Consistency: Performance Implications

Journal Article•DOI•

Resource Allocation as an Outcropping of Strategic Consistency: Performance Implications

Jeffrey S. Harrison¹, Ernest H. Hall², Rajendra Nargundkar³•Institutions (3)

University of Central Florida¹, University of Southern Indiana², Vignana Jyothi Institute of Management³

01 Oct 1993-Academy of Management Journal (Academy of Management)-Vol. 36, Iss: 5, pp 1026-1051

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.

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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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Book Chapter•DOI•

The Resource-based View

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Jay B. Barney¹, Asli M. Arikan¹•Institutions (1)

Ohio State University¹

26 Nov 2017

193 citations

Posted Content•

Strategic Management of Intangible Assets and Value Drivers in R&D Organizations

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Stephen Pike, Göran Roos¹, Bernard Marr¹•Institutions (1)

Cranfield University¹

25 May 2005-Social Science Research Network

TL;DR: In this article, a resource-based view of the R&D process is proposed to predict the dynamic interaction and transformation of five key resources, namely human, relational, organizational, monetary, and physical.

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Abstract: This paper takes a resource-based view of the R&D process. Based on the literature, we forward a theory that allows us to predict the dynamic interaction and transformation of five key resources, namely human, relational, organizational, monetary, and physical. Utilizing visualization tools allows us to test this theory on various levels in order to draw insights from the data. The output of the analysis improves the strategic understanding of an organization. In particular, it improves the understanding of how intangible resources drive the value creation in an R&D organization. Further analysis of the data allows us to identify resources that are either under utilized or over utilized, which might indicate inefficiencies in the organizational performance.

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174 citations

Journal Article•DOI•

Diversifying Entry: Some Ex Ante Explanations for Postentry Survival and Growth

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Anurag Sharma¹, Idalene F. Kesner²•Institutions (2)

University of Massachusetts Amherst¹, Indiana University²

01 Jun 1996-Academy of Management Journal

TL;DR: In this article, links between theoretically determined preentry conditions and the postentry performance of diversifying entries made by large industrial firms were examined, and the authors examined the relationship between the two.

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Abstract: Links between theoretically determined preentry conditions and the postentry performance of diversifying entries made by large industrial firms are examined. Industry, firm, and relatedness variabl...

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169 citations

Additional excerpts

...Following Montgomery and Hariharan (1991) and Harrison et al. (1991), we measured functional dissimilarity as the difference in advertising, R&D, and fixed asset intensity between entered industry and entering firm....
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Journal Article•DOI•

Manufacturing-based relatedness, synergy, and coordination

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Caron H. St. John¹, Jeffrey S. Harrison²•Institutions (2)

Clemson University¹, College of Business Administration²

01 Feb 1999-Strategic Management Journal

TL;DR: In this paper, a system for describing manufacturing relatedness that combines the study of value chain activities with 4-digit SIC codes was developed, then the presence of manufacturing synergies was assessed.

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Abstract: This paper explores the basic question of whether manufacturing-based relatedness between business units within a multibusiness firm serves as a basis for a competitive advantage at the business unit level. We developed a system for describing manufacturing relatedness that combines the study of value chain activities with 4-digit SIC codes, then we assessed presence of manufacturing synergies. We found no evidence that, on average, organizations involved in manufacturing-related businesses are reaping financial benefits from shared resources in manufacturing. However, some firms, through explicit commitment to coordination, do realize performance benefits from such involvement. Copyright © 1999 John Wiley & Sons, Ltd.

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163 citations

Journal Article•DOI•

Mergers and acquisitions and bank performance in Europe: The role of strategic similarities☆

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Yener Altunbas¹, David Marques²•Institutions (2)

Bangor University¹, European Central Bank²

01 May 2008-Journal of Economics and Business

TL;DR: This article examined the impact of European Union banks' strategic similarities on post-merger performance and found that differences between merging partners in their loan and credit risk strategies are conducive to higher performance, whereas diversity in their capital and cost structure has a negative impact from a performance standpoint.

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159 citations

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References

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Book Chapter•DOI•

Firm Resources and Sustained Competitive Advantage

[...]

Jay B. Barney¹•Institutions (1)

Texas A&M University¹

01 Mar 1991-Journal of Management

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.

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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 Article•DOI•

A Resource-Based View of the Firm

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Birger Wernerfelt¹•Institutions (1)

University of Michigan¹

01 Apr 1984-Strategic Management Journal

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.

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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.

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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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Competitive advantage: creating and sustaining superior performance

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M.E. Ponter

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.

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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.

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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•

The theory of the growth of the firm

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Edith Penrose

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.

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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

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14,137 citations

Book•

Markets and Hierarchies: Analysis and Antitrust Implications

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Oliver E. Williamson

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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