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What explains differences in firms' abilities to acquire competitive capabilities? In this paper we propose that embeddedness, in terms of firms' network of bridging ties and linkages to regional institutions, are important sources of variation in firms' acquisition of competitive capabilities. We argue that firm networks rich in bridging ties and firms' participation in regional institutions are critical vehicles for accessing new information, ideas, and opportunities leading to the acquisition of competitive capabilities in geographical clusters. Hypotheses are tested on a stratified random sample of 227 job shop manufacturers located in several regions of the US Midwest using data gathered from a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of novel insights about the link between firms' networks and competitive capabilities.

This paper studies redeployment of resources between target and acquiring businesses following horizontal acquisitions. The analysis draws from perspectives that emphasize the strategic importance of resources that are subject to market failure. We define a five-part typology of R&D, manufacturing, marketing, managerial, and financial resources. We show that targets and acquirers frequently redeploy resources following horizontal acquisitions, especially resources that frequently face market failure. We then show that the magnitude of redeployment of each type of resource increases with the asymmetry of the merging businesses ’ relative strength on the resource dimension. The research stresses evolutionary perspectives on business organizations that emphasize the importance of organizational differences in competitive markets. The central premise of our research is that the market for businesses is often more robust than the market for resources. © 1998 John Wiley & Sons, Ltd. Strat. Mgmt. J. Vol. 19, 631–661 (1998)

Businesses often benefit by forming alliances with other firms but risk becoming dependent on their partners. We discuss two situations in which dependence may create serious problems: first. if a partner shuts down and. second. if a partner forms a relationship with a new partner. We examine collaborative relationships fo rmed by businesses operating in the U.S. hospital software systems industry during the 1961-91 period. We find that businesses faced increased risk of dissolution if they did not form new partnerships after partners shut down or formed collaborative relationships with new pa rtners. The results have implications for del-eloping an evolutionary theory of business strategy and performance. Our approach implies that the performance of a focal business often depends 011 how the strategies of its business partners evolve over time. An evolutionary theory of strategy must incorporate key characteristics of actions and relationships throughout a web of business partnerships. The dual nature of interfirm relationships. which both help a business survive at one time and inhibit its ability to adapt at another. helps explain why so many successful businesses fail when their environments change. Formal interfirm collaboration has become an important means by wh ich busine sses in many industries gain access to capabilities needed to compete in changing markets. Empirical research suggests that collaborating firms sometimes realize corporate financial benefits (Berg, Duncan,

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Two strategic perspectives are analyzed, the neoclassical microeconomic perspective (using the Ricardo-Marshall approach to rent) and the Market Process perspective (using the Fetter approach to rent). In a neoclassical world, rents indicate "unsolved" or unexploited "inefficiencies" as every hypothetical outcome is viewed against the standard of perfect competition. By contrast, in the market process world there is no single ideal standard by which to measure any particular outcome. All action takes place in an open ended universe in which the future is continually being created, in which, competition is a "discovery process." A market process approach is not only more "realistic," it is better suited to the Resource-Based Theory of corporate and business strategy. 3 Rent and Resources: A market process perspective Introduction: Resource Based Theory and Rents The new resource based theory (RBT) of the firm relies, in many ways, on economic foundations. It takes as its point of d...

The capitalist and socialist societies of the 20 th century assigned firms different roles within their economic systems. Enterprises transforming from socialist to market economies thus face fundamental organizational restructuring. Many former state-owned firms in the transition economies of Central and Eastern Europe have failed at this task. These firms have pursued primarily defensive downsizing, rather than strategic restructuring, as a result of both internal and external constraints on restructuring strategies. Building on the organizational learning and resource-based theories, we analyze strategies available to management in privatized, former state-owned enterprises in transition economies to restructure their organization. Both internal forces promoting or inhibiting the restructuring process, and external constraints arising in the transition context are examined. A model and testable propositions are developed that explain post-privatization performance. Implications of our research point to the ways in which firms should manage and develop their resource base to transform to competitive enterprises.

Despite the growing body of literature describing the open-source phenomenon, few contributions have been theoretically grounded and research has largely focused on the software industry. Drawing on transaction cost economics, we go beyond these limitations and advance that open source constitutes a new generic governance structure---which we label bazaar governance--- based on a specific contract. We characterize this structure in terms of its strengths and weaknesses and in comparison with market, firm and network structures. We consider how bazaar governance is actualized within an industry and the institutional entrepreneur's crucial role in this process. Finally, we propose that bazaar governance has a profound impact on the structure of the industry in which it is introduced. Our propositions offer a potential basis for future research further developing governance theory.

This paper develops an approach to organizational governance decisions that recognizes how the choice of organizational governance form affects both the creation and appropriation of economic value. The paper begins with a detailed survey of three theoretical approaches— transaction cost economics (TCE), the resource based view (RBV), and real options analysis (RoA) to the study of organizational governance. This review serves to provide background material on each theory as well as to identify the similarities and differences in the assumptions underlying these perspectives. A concluding section provides a series of propositions for future empirical research that may help to integrate these theories by incorporating notions of both value creation and value appropriation.