Market orientation,marketing capabilities,and firm performance

Drawing on traditional resource‐based theory and its recent dynamic capabilities theory extensions, we examine both the possession of a market orientation and the marketing capabilities through which resources are deployed into the marketplace as drivers of firm performance in a cross‐industry sample. Our findings indicate that market orientation and marketing capabilities are complementary assets that contribute to superior firm performance. We also find that market orientation has a direct effect on firms' return on assets (ROA), and that marketing capabilities directly impact both ROA and perceived firm performance. Copyright © 2009 John Wiley & Sons, Ltd.     

Resources and capabilities driving competitive advantage in export markets: guidelines for industrial exporters

In the context of the quest for the factors that determine competitive advantage, this study adopts a resource-based view and applies it to industrial goods' manufacturers engaged in exporting activities. The notion of organizational process is used as a filtering mechanism for the development of a classificatory scheme for firms' sources of competitive advantage in export markets. Different combinations of export-related resources and capabilities are identified as drivers of cost, service, and product advantage. Nonetheless, the capability to build enduring relationships with customers emerges as essential in achieving all three types of export competitive advantage. The findings of this inquiry have important implications for business practitioners in export manufacturing firms of industrial products. Limitations of the study are considered, and future research directions are identified.     

Specificity and opacity as resource-based determinants of capital structure: evidence for Spanish manufacturing firms

In this work we develop an analytical framework to examine the effects of strategic investments on the financial policy of the firm. From the resource-based approach of the firm, nontradable and difficult-to-copy assets are the basis of a sustainable competitive advantage. However, imperfections in the resource markets can also be interpreted as sources of costs and/or restrictions from a financial point of view. Specificity and opacity are the features of strategic resources that enable us to identify the financial implications of the resource-based strategy. We have tested our theoretical framework using a sample of Spanish nonfinancial firms. Our results show that highly specific and opaque resources limit the borrowing capacity of the firm, while other transparent strategic assets affect financial leverage positively. Our findings suggest two main implications for strategy formulation and implementation: (1) there are unobservable financial costs that must be considered for a correct evaluation of a sustainable competitive advantage based on strategic resources; and (2) the financial policy of a ‘resource-driven’ firm is partially determined by the features of its strategic resource bundle. Copyright © 2001 John Wiley & Sons, Ltd.     

Human capital and learning as a source of sustainable competitive advantage

This paper seeks to identify the sources of wide and persistent variations in learning performance in the semiconductor manufacturing industry. In the resource‐based view of the firm, human capital is frequently assumed to contribute to competitive advantage due to its inimitability based on its intangible, firm‐specific, and socially complex nature. Consistent with this view, we find that investments in firm‐specific human capital have a significant impact on learning and firm performance. More specifically, human capital selection (education requirements and screening), development through training, and deployment significantly improve learning by doing, which in turn improves performance. However, we find that acquiring human capital with prior industry experience from external sources significantly reduces learning performance. We also find that firms with high turnover significantly underperform their rivals, revealing the time‐compression diseconomies that protect firm‐specific human capital from imitation. These results provide new empirical evidence of the inimitability of human capital. Copyright © 2004 John Wiley & Sons, Ltd.     

On the utilization of resources: perspectives from the U.S. telecommunications industry

The issue of resource utilization is important in the resource-based stream of work, since the ability of firms to utilize resources is a key indicator of their competitive abilities. This paper specifies why some firms might be better at utilizing resources than others. Thereafter, it demonstrates how to empirically ascertain differences in resource utilization patterns between firms using the U.S. telecommunications industry as a context. The data envelopment analysis procedure (DEA), which is a firm-level resource utilization measure, is used. This procedure can be useful for the resource-based approach research agenda since performance is measured in resource terms. DEA is applied to measure variations in different dimensions of resource utilization for the firms making up the local operating sector of the telecommunications industry. The use of DEA to guide empirical research and address theoretical issues within the resource-based paradigm is illustrated, using the resource utilization index for the telecommunications firms as the measure of strategic performance. © 1998 John Wiley & Sons, Ltd.     

Inbound open innovation for enhanced performance: Enablers and opportunities

Open innovation, defined as a firm's purposive pursuit and integration of external inputs for new product development, offers an alternative perspective on innovation. Drawing on resource-based and capability theories, this study identifies key factors that enable inbound open innovation and increase its efficacy in a business-to-business context. Because open innovation relies on external connections, relational capability—that is, the firm's ability to make and manage relationships with other firms—should enhance the effects of inbound open innovation on firm performance. Two key resources may further enhance the moderating effects of relational capability: network spillovers that indicate knowledge-rich surroundings, and flexibility that allows for responsiveness and adaptability. The authors test these relationships with data from managers in 204 business-to-business high-tech firms, as well as secondary data pertaining to firm performance and flexibility. The results support the expectations that the ability to build interfirm relationships in a knowledge-rich environment increase the efficacy of inbound open innovation for gaining superior financial performance. Interestingly, additional analyses suggest an unexpected nonlinear interaction effect with flexibility. When firms possess strong relational capabilities and adopt an open innovation approach, they achieve higher financial performance if they have a low or a high level of flexibility. The theoretical and managerial implications of these findings are discussed.     

Developing e-commerce marketing capabilities and efficiencies for enhanced performance in business-to-business export ventures

This study builds on resource based view (RBV) theory by examining the effects of e-commerce on exporting performance. Specifically, a framework is developed and tested to determine the e-commerce resources/capabilities–marketing efficiencies–performance relationship. To explore the impact of e-commerce on exporting, a two-stage methodological approach was employed. Results from 15 depth interviews with exporters were used to gain insight into types of e-commerce resources and capabilities and their impact on export marketing efficiencies and performance. Next, the framework was empirically tested using a sample of 340 exporters. The evidence shows that specialized e-commerce marketing capabilities directly increase a firm's degree of distribution and communication efficiency, which in turn leads to enhanced export venture market performance. Overall, the analyses provide support for the need to incorporate e-commerce constructs into existing RBV theory in export marketing. Theoretical and managerial contributions are discussed and directions for future research are offered.     

Autonomy and dependence of international cooperative ventures: an exploration of the strategic performance of U.S. ventures in Mexico

Researchers have begun to view international cooperative ventures as complex, multiparty organizations in which foreign and local firms and the venture itself all have distinctive roles. This approach has important implications for the venture strategies of foreign firms in emerging economies. This study explores relationships between the resource contributions of parent firms and U.S. managers' assessment of venture performance in a sample of established U.S.–Mexican ventures. The research suggests that mature cooperative ventures are expected to achieve autonomy from parent firms in key areas at the same time that certain forms of strategic dependency also are important to success. Copyright © 2002 John Wiley & Sons, Ltd.     

Export intensity,scope, and destinations: Evidence from Brazil

How do the three dimensions of geographic export diversification—namely, (1) export intensity, (2) export scope, and (3) export destinations—interact in determining firm performance? How does the export intensity–performance relationship change considering export scope and destinations? Drawing on institution-based and resource-based lenses, we argue that differences between home and destination country institutional environments are amplified by the scope or variety of export destinations. As firm resources nurtured in the home country may not fit an increasing number of different foreign institutional environments, the export intensity–firm performance relationship turns negative. Conversely, our panel data analysis suggests a positive relationship between export intensity and performance when exporters from an emerging economy increase their exports to a limited number of other emerging economies. Thus, our findings extend conventional wisdom on the export intensity–firm performance relationship and suggest that the international marketing strategy literature needs to simultaneously incorporate three dimensions (including export destinations) into the geographic export diversification construct.     

Knowledge‐based resources,entrepreneurial orientation,and the performance of small and medium‐sized businesses

While theory suggests that management has discretion in manipulating resources in order to build competitive advantage, resource‐based research has focused on the characteristics of resources, paying less attention to the relationship between those resources and the way firms are organized. In explaining performance, entrepreneurship scholars have focused on a firm's entrepreneurial strategic orientation (EO), leaving its interrelationship with internal characteristics aside. We argue that EO captures an important aspect of the way a firm is organized. Our findings suggest that knowledge‐based resources (applicable to discovery and exploitation of opportunities) are positively related to firm performance and that EO enhances this relationship. Copyright © 2003 John Wiley & Sons, Ltd.     

Competitive Advantages of the Latecomer Firm: A Resource-Based Account of Industrial Catch-Up Strategies

The resource-based view of the firm provides a satisfactory account of how firms go about sustaining their existing competitive advantages, but it is less successful in accounting for how firms create such advantages in the first place, or overcome incumbent advantages, when the firms start with few resources. The paper utilizes the case of latecomer firms from the Asia-Pacific region breaking into knowledge-intensive industries such as semiconductors, to illustrate the issues involved and the resource-targeting strategies utilized. This results in a strategic theory of the overcoming of competitive disadvantages through linkage, resource leverage, and learning. The dynamic capabilities of such firms are enhanced through repeated applications of linkage and leverage. The resources strategically targeted are characterized as being those most amenable to such linkage and leverage, namely those that are least rare and most imitable and transferable, i.e. as positive versions of the criteria utilized in the conventional resource-based view of the firm. It is argued that this adaptation of the RBV is potentially of wide applicability, and is the needed amendment that makes it of prime significance in accounting for latecomer success within the conceptual framework of strategic management.     

A note on the market share-profitability relationship

This study extends earlier empirical work to determine whether there is a breakpoint or critical level in the frequently observed relationship between firm market share and profit rate. The analysis focuses on the banking industry and uses a sample of 10,690 firms located in 2165 different local geographic markets. Though the results apply directly only to banking, the similarity of findings on various other industrial organization topics in banking and the industrial sector suggests that the results of this study will be broadly relevant to the industrial sector.The main findings of the study are that (1) in general, firm market share is directly related to profitability; (2) the firm market share variable remains positive and significant when controlling for market concentration either with concentration as a separate independent variable or by conducting tests with subsamples of firms that are in markets with similar concentration ratios; and (3) while there is no sharp breakpoint in the market share-profitability relationship, the results indicate that profit rates of firms increase at a decreasing rate up to a share of about 55 percent. Since numerous studies have found that economies of scale are not particularly important in banking, it appears that the observed relationship is not due to greater efficiency with larger shares.     

What Determined Success During the Asian Economic Crisis?—The Importance of Experiential Knowledge and Group Affiliation

This study investigated the factors that determined the change in firm performance during the Asian economic crisis. Applying a process-oriented resource-based view and MNC network theory, we argued that host country experience, industry experience, subsidiary experience, and group affiliation would influence subsidiary performance during an economic crisis. By testing the hypotheses on a sample of 1128 Japanese subsidiaries in Thailand, Indonesia, Malaysia, and Korea, we found that, among different knowledge resources that the MNC accumulated in its internationalization process, subsidiary experiential knowledge was most significant in picking the winners from the losers during the crisis. Keiretsu affiliation and the parent firms industry experience were also significant, positive factors for firms remaining profitable or even better after the crisis. However, firm size and industry effects were not related to performance.     

Knowledge relatedness and the performance of multibusiness firms

This study examines corporate performance effects of cross‐business knowledge synergies in multibusiness firms. It synthesizes the resource‐based view of diversification and the economic theory of complementarities to conceptualize cross‐business knowledge synergies in terms of the relatedness and the complementarity of knowledge resources across business units of the multibusiness firm. The study hypothesizes that corporate performance is improved when the firm simultaneously exploits a complementary set of related knowledge resources across its business units. In a sample of 303 multibusiness firms, the study finds that synergies arising from product knowledge relatedness, customer knowledge relatedness, or managerial knowledge relatedness do not improve corporate performance on their own. Synergies arising from the complementarity of the three types of knowledge relatedness significantly improve both market‐based and accounting‐based performance of the multibusiness corporation. Copyright © 2004 John Wiley & Sons, Ltd.     

The role of corporate image in business-to-business export ventures: A resource-based approach

Although a growing body of studies suggests that good corporate images have strategic value for the firms that possess them, no research to date has looked at the role of corporate image in export markets. To fill this gap in the extant literature, this study draws on the resource-based view and insights from qualitative interviews to develop a model that links an exporter's financial resources and relationship management capabilities with its corporate image advantage and its performance in the export market. Findings reveal that both financial resources and relationship management capabilities are significant contributors of corporate image advantage, which, in turn, is an important determinant of superior export performance. The study concludes with a discussion of the implications of the findings for marketing theory and practice and suggestions for future research.     

Exploration and Resource Commitments in Unequal Partnerships: An Examination of Corporate Venture Capital Investments

While established firms' relationships with external ventures may have significant strategic benefits, the realization of such benefits is fraught with considerable uncertainty. The real options and interorganizational learning literatures present an interesting trade‐off for established firms regarding commitment of resources in a partnership. This study seeks to enhance our understanding of how firms manage these trade‐offs when committing resources to external venturing initiatives. We examine the magnitude of resources initially committed by an established firm to an external venturing partnership in the context of corporate venture capital (CVC) investments. While a real options approach suggests that resource commitments should be lowered in the presence of uncertainty regarding realization of benefits, the interorganizational literature emphasizes that resource commitments may be essential for building quality relationships that expedite learning. Corporate investors, who invest in new ventures in order to gain strategic benefits, face higher uncertainty when their investment objectives involve greater exploration. However, greater exploration also increases investors' need to learn from their portfolio ventures. We, therefore, predicted that the degree of exploration would have a U‐shaped relationship with the investor's resource commitment in a venture. We also expected that factors that serve to decrease the investor's uncertainty, i.e., investor experience diversity and venture affiliation to prominent venture capitalists, would moderate the U‐shaped relationship between exploration and resource commitment. The predictions of the study are tested on a sample of 248 initial investments in private ventures made by incumbent firms in the computer, semiconductor, and telecommunications industries between 1996 and 2000. We find some support for our hypotheses. This study contributes to the external venturing literature on CVC investments by examining the determinants of the magnitude of resource commitment to new ventures, and integrates real options perspective, which advocates low resource commitments under uncertainty, with the organizational learning literature, which argues for greater resource commitment to secure partner cooperation. The results of this study reveal interesting insights into how CVC investors manage individual investments to generate strategic benefits.     

How do dynamic capabilities transform external technologies into firms’ renewed technological resources? – A mediation model

How externally acquired resources may become valuable, rare, hard-to-imitate, and non-substitute resource bundles through the development of dynamic capabilities? This study proposes and tests a mediation model of how firms’ internal technological diversification and R&D, as two distinctive microfoundations of dynamic technological capabilities, mediate the relationship between external technology breadth and firms’ technological innovation performance, based on the resource-based view and dynamic capability view. Using a sample of listed Chinese licensee firms, we find that firms must broadly explore external technologies to ignite the dynamism in internal technological diversity and in-house R&D, which play their crucial roles differently to transform and reconfigure firms’ technological resources.     

The antecedents and outcome of control in IJVs: A control gap framework

Plenty of researchers have explored the relationship between parent firm control and international joint venture (IJV) performance. However, the conclusions of these researchers are inconsistent. Some studies suggest that total control from foreign parent firms produces better outcomes, while other studies consider that shared control or split control structures result in higher IJV performance. All of these studies argue that a parent firm’s control over an IJV would influence the performance of the IJV. This paper contributes to these debates by exploring the control gap, that is, the difference between desired control and exercised control of a parent firm. Evidence from 80 IJVs in Taiwan indicates that control gaps in the areas of manufacturing, financial, and human resource management have negative impacts on IJV performance. Empirical results also show that the level of a parent firm’s resource contribution to an IJV positively influences the parent firm’s desired control. The extent of a parent firm’s learning intent in marketing and R&D management is also positively linked with the degree of control desired by the parent firm. These findings provide important implications for the study of control structure in IJV management.     

Firm resources,competitive actions and performance: investigating a mediated model with evidence from the in‐vitro diagnostics industry

Building on the resource‐based view (RBV) and competitive dynamics literatures, this paper proposes that considering resources or actions independently offers an incomplete understanding of the drivers of superior performance. Instead, we hypothesize that resources enable competitive actions and that when these actions leverage the firm's resources, superior performance results. We tested these hypotheses with panelized data on the technological resources and competitive actions of firms in the in‐vitro medical diagnostic substance manufacturing industry. The results provide substantial support for our hypotheses, specifically with respect to mediation. Our theory and results underscore how the integration of the competitive dynamics and RBV literatures can significantly improve our understanding of firm performance. Copyright © 2011 John Wiley & Sons, Ltd.     

The role of human resources strategy in export performance: A longitudinal study

This longitudinal study examines the effect of human resources strategy on the export performance of 388 Florida firms. After controlling for differential firm advantages, managerial perceptions and aspirations, and marketing activities, results show that the way human resources are selected, deployed, compensated and motivated will play a significant role in subsequent export performance.