Business acquisition, resource redeployment, and asset divestiture are elements of a dynamic process in which firms change their businesses by recombining internal and external resources. Analyzing 253 horizontal acquisitions, we show that post-acquisition resource redeployment leads to asset divestiture from the business that receives the redeployed resources, but not from the business that contributes the new resources. Consistent with scale economies rationales, we find that strategic similarity also leads to greater asset divestiture from the target firms. Many theoretical perspectives are skeptical about the positive rationale for acquisitions and many of these believe that asset divestiture is evidence of acquisition failure. Our arguments and analysis help refine the accepted wisdom. In particular, the pattern of resource redeployment and asset divestiture in our analysis suggests that acquisitions provide a means of reconfiguring the structure of resources within firms and that asset divestiture is a logical consequence of this reconfiguration process. Copyright © 2001 John Wiley & Sons, Ltd. This study examines the causes of asset divestiture following horizontal acquisitions. Asset divestiture is the partial or complete sale or disposal

In this paper we propose a theory of the cultural evolution of the firm. We apply cultural and evolutionary thinking to the questions posed by theories of the firm: What are firms and why do they exist? We argue that firms are best thought of as cultures, as social distributions of modes of thought and forms of externalization. Using the term meme to refer collectively to cultural modes of thought—ideas, beliefs, assumptions, values, interpretive schema, and know-how—we describe culture as a social phenomena, patterns of symbolic communication and behavior that are produced as members of the group enact the memes they have acquired as part of the culture. Memes spread from mind to mind as they are enacted and the resulting cultural patterns are observed and interpreted by others. The uncertainties of interpretation and the possibilities of reinterpretation and recontextualization create variation in the memes as they spread. Over time, firms evolve as a process of the selection, variation, and retention of memes. Our claim is that understanding firms in this way provides a new perspective— what we call the meme’s-eye view—on the question of why we have the firms we have and, by allowing us to shed the functionalist assumptions shared by both economics and knowledge-based theories of the firm, makes possible a genuinely descriptive, as opposed to normative, theory of why we have the firms that we have.

The dynamic capabilities literature suggests that firms need to use both internal development and external sourcing to thrive over time, but we have a limited understanding of the conditions that best suit different sourcing choices. This study examines how constraints that arise from firms ’ existing stocks of capabilities and from their internal social contexts shape their choices of capability-sourcing modes and, in turn, their ability to obtain new capabilities. Thus, the research focuses on an underemphasized form of dynamic capability: the ability to select appropriate modes of capability sourcing. We test the arguments with a survey and longitudinal survival study of the international telecommunications industry. We find intriguing variations in the way that firms ’ selection capability influences their ability to renew their capabilities and, ultimately, to survive. Key words: modes of capability acquisition; selection capability; resource gap; institutional gap; internal development; external sourcing History: Published online in Articles in Advance April 7, 2008. Recent arguments in the dynamic capabilities literature suggest that firms need to develop skills in both internal development and external sourcing to be able to renew their capabilities and thrive over time (Helfat

Differences in competences are widely believed to be an important source of enduring competitive advantage. However empirical studies investigating the sources of firm differences in terms of both human resource types, levels and degrees of heterogeneity remain sparse to date. Because firm competence rest on human resources and their relation, this study demonstrates with a uniquely comprehensive data set that human resource types, levels, and heterogeneity in engineering consulting firms are empirically separable constructs that have significant and yet different influences on firm performance in terms of productivity and profitability. Our results indicate that educational diversity matters more for explaining performance differences than levels of experience and tenure of human resources.

The dynamics of change and the path−dependent evolution of resources and capabilities are central concerns of contemporary strategic management. This paper integrates the resource−based and dynamic capabilities literatures to explain why development of dynamic capabilities is especially important for firms that transition from regulated to deregulated environments. We develop a theoretical model and specific propositions concerning the pattern and sequencing of dynamic capability development within environments experiencing substantial change, specifically in newly deregulated industries. We discuss implications of the proposed theoretical model for both research and managerial practice.

How can an organization establish an efficient IS resource? Over the years, the resource-based view (RBV) has provided important insights into the value creation by IT. Unfortunately, large parts of the literature suffer from broad and ambiguous constructs that are problematic to validate and difficult to concretely apply. Furthermore, the transmission from IT resources on one side to competitive advantage on the other is not yet sufficiently understood. Goal of this paper is to clarify some of the often used constructs and build a framework for the transmission from the endowment with resources to the achievement of competitive advantage. In this paper, we aim to contribute to this research strand in two ways. First, a model incorporating many isolated findings from the RBV is developed. Reflecting the need for a process view as proposed by large parts of the alignment and strategic management literature, this is integrated into a single process framework of analysis. Second, by augmenting a microeconomic production function incorporating organizational routines the transmission from IT resource to better business process performance is explicated, allowing simultaneous parameter sensitivity analysis and contributing to making the RBV applicable and open for empirical research.

and structural change

Competitive dynamics and economic learning: An extended resource-based view

Accelerating technological change and increasing worldwide competition in the last few years, have created a need for managers to adopt a more entrepreneurial approach when formulating their strategies (Veciana, 1996; Entrialgo, Fernandez & Vázquez, 2001). For this reason, academics and managers have recently begun showing

In the past decade, technological advancements have led to changes in the economy with important implications for the strategic management of new ventures. In this paper, we argue that the dynamics of competition, success, and failure for new ventures have been significantly altered by the convergence of electronic technologies and the growing importance of knowledgebased assets. We proceed from the traditional argument that relates first-mover advantage positively and liabilities of newness negatively to entrepreneurial success. The extremely high failure rate of new firms suggests that traditional startups have typically been overwhelmed by liabilities of newness. We then argue that two features of firms competing in the new economy – knowledge-based assets and “virtual embeddedness ” – work to diminish the effects of the liabilities of newness and increase returns to first movers, consequently increasing the probability of success for pioneering new ventures. 2