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What makes a resource valuable? Identifying the drivers of firm-idiosyncratic resource value


Schmidt, Jens; Keil, Thomas (2013). What makes a resource valuable? Identifying the drivers of firm-idiosyncratic resource value. Academy of Management Review, 38(2):206-228.

Abstract

We fill a gap in the resource-based literature by identifying conditions and mechanisms that make a resource valuable to a firm ex ante-that is, before a decision on acquiring or building it is made. These conditions are (1) the firm's ex ante market position; (2) its ex ante resource base, which allows for complementarities; (3) its position in interorganizational networks, which gives it access to privileged information; and (4) the prior knowledge and experience of its managers, which allow superior judgment concerning the value-creating potential of the resource. These factors help explain why firms initially differ in how much value they attribute to a resource and, subsequently, why firms differ in their resource endowments. Our results also contribute to resource management theories by highlighting the role of managerial judgment in acquiring and accumulating resources and, thus, shaping firms' paths toward superior competitive positions. Furthermore, identifying firms' market positions and managerial judgment about demand-side value creation opportunities as resource value drivers highlights the importance of demand-side factors to strategic outcomes. We also discuss how our findings may open avenues for further studies and provide a basis for empirical tests of the resource-based view of strategic management.

Abstract

We fill a gap in the resource-based literature by identifying conditions and mechanisms that make a resource valuable to a firm ex ante-that is, before a decision on acquiring or building it is made. These conditions are (1) the firm's ex ante market position; (2) its ex ante resource base, which allows for complementarities; (3) its position in interorganizational networks, which gives it access to privileged information; and (4) the prior knowledge and experience of its managers, which allow superior judgment concerning the value-creating potential of the resource. These factors help explain why firms initially differ in how much value they attribute to a resource and, subsequently, why firms differ in their resource endowments. Our results also contribute to resource management theories by highlighting the role of managerial judgment in acquiring and accumulating resources and, thus, shaping firms' paths toward superior competitive positions. Furthermore, identifying firms' market positions and managerial judgment about demand-side value creation opportunities as resource value drivers highlights the importance of demand-side factors to strategic outcomes. We also discuss how our findings may open avenues for further studies and provide a basis for empirical tests of the resource-based view of strategic management.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2013
Deposited On:20 Jun 2013 14:58
Last Modified:05 Apr 2016 16:49
Publisher:Academy of Management
ISSN:0363-7425
Publisher DOI:https://doi.org/10.5465/amr.2010.0404
Other Identification Number:merlin-id:8130

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