Bringing a Resource and Capability Lens to Resource Allocation

Abstract

This article highlights a perspective that has been underexplored in resource allocation research. By viewing resource allocation through a resource and capability lens, three connections are developed between resource-based theories of strategy and strategy research on resource allocation. First, the lens is applied to frame capital investments as investing in capabilities. This framing provides a theoretical path connecting the strategic purpose of investments, through value creation from resource commitments, to the creation of competitive advantage. Second, resource allocation for the purpose of capability development is related to a resource-based model of asset accumulation. Placing resource allocation decisions in the context of capability development suggests that key features of the asset accumulation process can usefully inform research on the resource allocation process. Last, corporate capital allocation is connected to resource redeployment in multibusiness firms. This connection explicates ways in which corporate headquarters can add to firm value. These connections illustrate the potential that resource-based theories have to contribute insights to resource allocation research.

Keywords

resource allocation/management resource-based view strategic decision making strategic factor markets

Allocating the resources needed to carry out strategies is fundamental to strategic management (Ansoff, 1965; Chandler, 1962; Hofer & Schendel, 1978). But resource allocation in a firm is complex. It involves multiple activities conducted by managers from across organizational functions, levels, and units and is affected by social and political factors in addition to economic ones.

It is not surprising strategy scholars have drawn from a number of theoretical perspectives to gain insights into various aspects and elements of this complex phenomenon. For example, theories of organizational ecology and evolution have been applied to explain the iterative nature of the resource allocation process (e.g., Burgelman, 1983; Noda & Bower, 1996). The behavioral theory of the firm has been used to study models of capital investment decision-making processes (e.g., Bromiley, 1986; Butler, Davies, Pike, & Sharp, 1993; Carter, 1971), capital investment time horizons (e.g., Souder & Bromiley, 2012), and decision biases in corporate capital allocation to units of multibusiness firms (e.g., Arrfelt, Wiseman, & Hult, 2013). Concepts from cognitive psychology have also informed studies of capital allocation decision biases (e.g., Bardolet, Fox, & Lovallo, 2011) and have been applied to framing of opportunities in the resource allocation process (e.g., Gilbert, 2006).

The purpose of this article is to highlight a perspective that has been underexplored in resource allocation research. Resource-based theories concern “the nature, behaviour and/or performance of ﬁrms, in which the unit of analysis is a resource or capability (or a bundled set of resources and capabilities) that a ﬁrm possesses, controls or accesses preferentially” and include “theories of resource acquisition and accumulation (such as strategic factor market theory and the [capability] lifecycle), theories of the ﬁrm (such as the knowledge-based view) and theories of sustainable competitive advantage (such as dynamic capabilities and the relational view)” (Peteraf, 2014). It would seem logical that a theoretical domain addressing the acquisition, configuration, and deployment of resources would have a natural affinity to concepts and models related to the allocation of resources. However, connections between resource-based theories of strategy and strategy research on resource allocation have not been well developed. The discussion presented here explores some of those connections by viewing resource allocation through a resource and capability lens.¹

Three areas of connection are addressed to illustrate how applying a resource and capability lens can contribute insights to resource allocation research. The first area concerns resource allocation to investments in capabilities. Although it is widely acknowledged that managers allocate a range of resource types, both financial and nonfinancial, resource allocation studies have largely examined allocation of financial capital. The focus on financial resources reflects practical reasons because, as Bower (1970: 3) noted, resource allocation “is an all-encompassing phrase [and] not particularly operational as a subject for research.” Allocations of financial resources are readily identifiable, observable, and measureable, making them particularly amenable for empirical study. But financial capital is allocated for a specific purpose, and often that purpose remains in the background of resource allocation research. A resource and capability lens on investments provides a means of bringing that purpose into the foreground by connecting allocations of financial and nonfinancial resources to capabilities investment, value creation, and pursuit of competitive advantage.

The second area of connection relates processes of resource and capability acquisition to processes of resource allocation. Resource-based theories offer models of buying and building resources and capabilities (Barney, 1986; Dierickx & Cool, 1989). At the core of the buying and building processes are resource allocation decisions, thus providing a conceptual link that allows us to draw on characteristics of these resource acquisition processes to inform process studies of resource allocation.

Finally, connecting resource redeployment and resource allocation is discussed. Corporate capital allocation research has examined the allocation of financial resources across business units in multibusiness firms. However, corporate managers also allocate nonfinancial resources across businesses. A resource and capability lens introduces redeployment of existing resources and capabilities to the analysis of resource allocation activity and creation of corporate value.

Before proceeding, it is useful to note the discussion that follows refers to two streams of strategy research on resource allocation. One stream is focused on the resource allocation process and has developed descriptive process models of behavioral, social, and political factors driving resource allocation decisions (see Bower & Gilbert, 2005, for a review). The second stream consists of research on capital allocation in multidivisional firms that has focused on the relationship between characteristics of business units and patterns in the allocation of capital to those units by corporate management (see Busenbark, Wiseman, Arrfelt, & Woo, 2017, for a review [this issue]).

Resource Allocation to Investments in Capabilities

When a firm makes a capital investment, financial resources are converted to nonfinancial resources; funds are used to purchase physical assets such as equipment. The firm then deploys the newly acquired resources in conjunction with its other resources as it pursues a strategy. In other words, the investment contributes to an organizational capability. A capability is a firm’s capacity to deploy the resources that it owns or controls, often in complex combinations, for the purpose of achieving a particular end result (Amit & Schoemaker, 1993; Helfat & Peteraf, 2003).

Characterizing an investment as contributing to a capability is different than treating it as a stand-alone purchase of an asset. Consider an investment in a piece of automated production equipment made for the purpose of being able to efficiently manufacture a variety of products with features customized to customers’ specifications. This equipment contributes to manufacturing flexibility, an organizational capability that allows the firm to increase the value that it offers its customers. However, the equipment alone is insufficient to provide the capability. Other resources needed include design skills to incorporate customizable features into product designs, trained employees to operate the equipment, organizational processes to handle complexity in inventory management and production scheduling, and information systems to integrate and coordinate activities from order processing through manufacturing and delivery.

As this example illustrates, allocation of capital and human resources for the purpose of developing expertise, worker skills, organizational procedures, information systems, and other assets is needed in addition to purchasing the physical asset (Gold, 1983). Understanding how the purchased asset will be used and how it will be combined with other resources is essential to defining the scope of the initiative being undertaken more completely and placing the investment decision in the context of a firm’s strategy. This perspective has a number of implications for resource allocation.

Framing investments in terms of capabilities offers a structure to more accurately delineate and articulate the scope of an investment project and the set of related commitments required. Models of the resource allocation process in the literature (e.g., Bower, 1970) provide rich depictions of a complex multistage, multilevel process for determining to which initiatives resources are committed. In the first stage of the resource allocation process, the need or opportunity for investment is identified, and the scope and features of a project are defined in technical and economic terms. How an investment initiative is defined when it is initially proposed has significant consequences for other aspects of the resource allocation process, including how the initiative is evaluated and the support that it receives from organizational actors.

As Baldwin and Clark (1992: 68) observed, investments in capabilities “do not stand alone, but are intertwined with other investments.” Investing in a capability entails investing in the relevant resources to be deployed and investing in the skills needed to deploy them; therefore, there are likely to be multiple, interdependent resource allocation decisions. If the anticipated benefits of a particular investment are dependent on making other investments and on commitments of nonfinancial resources, the definition process will ideally incorporate these additional elements. But that is less likely to occur in a typical, decentralized capital budgeting process that is organized around purchases of physical equipment; therefore, the structural context of the resource allocation process—the administrative processes and systems that shape definition (Bower, 1970)—needs to be managed to provide the incentives that encourage and reward the required managerial behaviors and actions.

This capabilities framing of the purpose of investing also provides a theoretical logic around value creation and competitive advantage, providing a means of more closely connecting the investment decision to firm strategy. Capabilities involve the deployment of bundles of complementary and co-specialized resources that a firm uses to compete (Teece, 1986), and value is created from the combination of resources. Robins (1992) describes returns to such investments as having one component associated with the tradeable resources that are purchased and a second component associated with firm-specific, nontradeable resources, such as the knowledge, skills, and organizational processes with which the purchased resources are bundled. It is this latter component that potentially makes the same acquired asset more valuable to one firm than to its competitors. Therefore, defining investments made for the purpose of developing capabilities in a way that captures the role of the combination of resources is crucial for fully estimating the anticipated value of the investment.

A second aspect of value creation from capabilities with important implications for the definition process arises from their real options nature. Investments in the tradeable and nontradeable resources that contribute to capabilities not only support current strategies but also provide a means of responding to future contingent events; that is, they have an option value (Bowman & Hurry, 1993; Kogut & Kulatilaka, 2001). As a result, investments made in a capability have both expected returns associated with current strategies based on the capability and potential future returns associated with future uses of that capability, a complex feature that complicates the definition process (Maritan & Alessandri, 2007). In sum, while it is the underlying characteristics of a capability investment that determine the potential value that can be created by the investment, the definition process determines how those characteristics are defined for decision making and, therefore, the value that ultimately can be realized.

Another issue concerning value created by capability investments relates to not only definition but also the social and political impetus that moves an initiative through the organization (Bower, 1970). Some capabilities can be shared by multiple organizational units, such as divisions, and value from their deployment can accrue across those divisions; indeed, economies of scope arising from such sharing can be a basis for diversification (Singh & Montgomery, 1987). However, investment proposals typically are initiated and sponsored by a particular unit, and managers in the originating unit may lack the information to fully specify the anticipated benefits that accrue elsewhere. Furthermore, if the structural context does not provide incentives and rewards that encourage cross-unit cooperation, the proposal may not receive the impetus needed to generate the required resource commitments.

Finally, the value created by a capability investment may contribute to competitive advantage. Resource-based advantages arise when a firm’s resources and capabilities create more economic value than those belonging to their competitors do. “Firms with superior resources [and capabilities] can deliver greater benefits to their customers for a given cost (or can deliver the same benefit for a lower cost)” (Peteraf & Barney, 2003: 311). Models of the resource allocation process typically do not address competitive advantage; the focal outcome is an investment or other resource commitment. Those commitments may be seen to shape firm strategy (Burgelman, 1983) or aggregate to an emergent strategy (Noda & Bower, 1996), and performance outcomes resulting from the strategy may generate feedback that initiates new resource allocation proposals. But the focus remains on drivers of commitment. A resource and capability lens provides a complementary perspective that offers a theoretical path that connects the strategic purpose of investments, through value creation from resource commitments, to the creation of competitive advantage.

Processes of Resource Acquisition and Resource Allocation

Once a resource and capability lens has framed the purpose of investment, resource-based models that link resource allocation decisions directly to acquisition of resources and capabilities can be applied. Some resources, such as production equipment, standard technology, and generic labor, are tradeable and can be purchased in factor markets. But other resources and especially capabilities tend to be nontradeable, so they are not available in factor markets and therefore must be developed internally within the firm. Both acquisition mechanisms, buying and building, entail resource allocation decisions. In the case of factor market transactions, firms make investments to buy the desired resources from their owners (Barney, 1986); the literature presents few details about the associated processes (Maritan & Peteraf, 2011). In the case of internal development, firms make repeated investments in activities leading to accumulation of resource and capability stocks, and theory articulates several key characteristics of the process by which this occurs (Dierickx & Cool, 1989). It is useful to consider how these characteristics of the resource accumulation process can inform research on the resource allocation process.

For ease of exposition, the arguments that follow refer primarily to capability development; however, those arguments apply equally to the development of nontradeable resources. Dierickx and Cool’s (1989) model of asset accumulation describes capability development in terms of making a series of commitments over time, adhering to consistent policies. There is an inherent path dependence as a firm repeatedly allocates financial and nonfinancial resources required to build capability stocks. Consider an investment made in the context of this accumulation process. The decision to invest in a capability and the associated organizational process of resource allocation occur at a point along the development path and under conditions that exist at that point. Those conditions depend, at least in part, on what decisions were made previously and the outcomes of those decisions—history matters. When a firm is positioned at the beginning of a capability development path, it lacks experience in both developing and using that capability, and there is higher task uncertainty. But with movement along the path, conditions change as experience is gained and task uncertainty is reduced. Features of the resource allocation process therefore may vary with the stage of capability development. Maritan (2001) found significant differences in the resource allocation processes used in the same firm for investments made for the purpose of building a new capability versus investments to maintain or increase stocks of existing capabilities. A typical bottom-up process was used for investing in existing capabilities while, at the same time, a top-down, less procedurally rational process was used for new capabilities. Beyond this initial study, however, little research to date has examined the relationship between position on a capability development path and the resource allocation process.

Resource allocation scholars have viewed realized strategy as the outcome of an iterated resource allocation process (e.g., Noda & Bower, 1996), and placing resource allocation decisions in the context of the evolutionary process of asset accumulation offers a theoretical mechanism complementary to that view. In the asset accumulation model, strategy involves choosing time paths of resource allocations to develop capability stocks (Dierckx & Cool, 1989). Those choices provide the strategic context (Burgelman, 1983) within which the allocations are made to move the firm along the capability accumulation path or potentially alter that path and modify the intended strategy. Movement along the path and changes in trajectory are also influenced by characteristics of the asset accumulation process, which will in turn shape the resource allocation process.

Accumulation of resources and capabilities is not only path dependent but also time dependent. Capability stocks do not adjust instantaneously to investment—it can take time, giving an advantage to a firm that has been investing in a capability over a sustained period. Two characteristics of the accumulation process—time compression diseconomies and asset mass efficiencies—can confer advantages, through reducing the cost of capability development, to a firm further along a development path (Dierickx & Cool, 1989), thereby increasing the attractiveness of making further investments in that capability. If time compression diseconomies are present, there is a trade-off between the magnitude of investment and the time required to build (Dierickx & Cool, 1989). A competitor cannot match the capability of a firm further along the development path by accelerating investment. Thus, the firm is likely to favor opportunities to continue to invest in that capability to stay ahead. Asset mass efficiencies are economies of accumulation associated with high levels of a capability stock at the time that an investment is made; in other words, “success breeds success” (Dierickx & Cool, 1989: 1507). This virtuous cycle can make it difficult for competitors starting with a smaller stock of the capability to catch up and therefore favors continued investments by the firm to further increase its stock. In sum, competitors starting with an inferior resource position, correcting a development trajectory, and making up for lost time are disadvantaged.

Despite the positive effects, path dependence can constrain the investment opportunities that a firm pursues. Investments in capabilities made over time are largely irreversible. Capabilities involve complex combinations of tradeable and firm-specific nontradeable resources. The costs of building capabilities have a significant sunk component that cannot be recouped through the sale of the associated resources. This creates “stickiness” of resources and capabilities and commitment to a particular resource position (Ghemawat, 1991). That in turn makes it difficult for a firm to alter the trajectory of capability development, and it limits the investment opportunities that the firm is likely to favor.

Path dependence, time compression diseconomies, and asset mass efficiencies present potential barriers to imitation of the capability accumulation process, of which the resource allocation process is an integral part, and therefore to imitation of the resulting capabilities that are built. If those capabilities create superior value and lead to competitive advantage, these characteristics can help sustain that advantage.

Resource Redeployment and Resource Allocation

Thus far, the discussion has been oriented around contributions of a resource and capability lens to research on allocation decisions concerning resources that are deployed to support competitive strategies in pursuit of competitive advantage. To create corporate value in a multibusiness firm, there is another level of resource allocation as corporate managers allocate financial capital to the business units. The financial resources are then further allocated to initiatives within the businesses and converted to nonfinancial resources used in pursuit of their strategies. A resource and capability lens also offers useful insights into corporate capital allocation activity.

Capital allocation research is concerned with factors that drive corporate-level decisions to allocate financial resources across units in a multibusiness firm and examines whether the allocation scheme is efficient (e.g., Arrfelt et al., 2013; Arrfelt, Wiseman, McNamara, & Hult, 2015; Bardolet et al., 2011). The businesses are characterized in terms of some measure of potential future performance, such as growth or profitability, and studies examine whether more funds go to the units with superior prospects.

But capital is not the only type of resource that corporate managers allocate. There is a stream of resource-based literature that examines resource redeployment—the internal redistribution of nonfinancial resources across businesses (Folta, Helfat, & Karim, 2016). Redeployment allows firms to create value by allocating resources such as skilled personnel to their most productive applications. The premise of this stream of literature is twofold. First, a firm’s internal resource market may be more efficient than an external one for the purpose of resource acquisition. Second, a firm may have the flexibility to redeploy firm-specific nonfinancial resources across its businesses over time. For firms with efficient internal resource markets and redeployment flexibility, corporate headquarters add to firm value by partially or completely withdrawing resources from one business and reallocating them to existing and new businesses, thus benefiting from intertemporal economies of scope (Helfat & Eisenhardt, 2004). The benefits are more pronounced in turbulent and unpredictable environments, when the prospect of an existing business is in decline and that of the firm’s alternative businesses promises higher returns.

Complementary to the research on capital allocation and its examination of the firm’s internal capital market, the research on resource redeployment examines the firm’s internal resource market. Specifically, the research examines when internal resource markets are more efficient than external resource markets for nonfinancial resources. If no efficiency difference exists, intertemporal economies do not exist. Instead of creating internal resource markets, firms could acquire resources from external sources (e.g., hiring skilled personnel from outside).

Unlike the movement of financial resources inside a firm, redeployment of nonfinancial resources requires adjustment costs—for example, the costs of retraining employees, modifying plant and equipment, or recontracting with existing suppliers. Adjustment costs invoke considerations of path dependence in two ways. First, a firm’s initial choice of what resources to develop has consequences for how costly the adjustment will be when the resources are redeployed at a later time. Second, when a firm adds new businesses to its portfolio, what those businesses are has consequences for what alternative applications will be available in inducing the redeployment of resources (Lieberman, Lee, & Folta, 2017). Therefore, corporate managers add value by reserving flexibility for subsequent redeployment in the initial deployment choices and by developing alternative productive applications that enhance redeployment flexibility.

A critical aspect of resource redeployment that can affect resource allocation is the attributes of resources that are associated with higher efficiency of internal resource markets and higher redeployment flexibility. When the attributes are identified, the resource allocation process can target certain resources and allocate them in line with their specific competitive purposes. Resources that are associated with higher efficiency of internal resource markets and higher redeployment flexibility tend to be more fungible, non-scale-free, decomposable, but less tradeable in external resource markets. Fungibility facilitates the application of a resource to different organizational and market settings. The degree of fungibility of nonfinancial resources is not a given but rather a function of suitable uses (Anand, Kim, & Lu, 2016). Managers may not find suitable uses for otherwise fungible resources outside closely related domains. A resource is nonscale free if it may be used productively in only one setting at a time. Non-scale-free resources (e.g., employees, equipment, plants) are prime candidates for redeployment, whereas scale free resources (e.g., brand, routine-embodied knowledge, organizational culture) can be used contemporaneously across businesses without opportunity cost (Levinthal & Wu, 2010). Decomposability reflects the extent to which resources in a bundle interact in creating value. A resource from a loosely coupled bundle can be easily redeployed because the bundle can be decomposed into components and a component can be separated from the bundle without sacrificing much of value (Anand et al., 2016). The final attribute that can affect resource allocation is tradability. Firms are deterred from using external markets when the transaction cost of trading resources via contracts and arm’s-length relationships is high and when the value of resources is underestimated by potential buyers. Under such conditions, internal resource markets are used for facilitating redeployment and reallocation.

Viewed through a resource and capability lens, resource allocation decisions are deeply connected to resource redeployment in two ways through which corporate headquarters can add to firm value. First, value can be added by anticipating resource redeployment when financial capital is allocated and converted to nonfinancial resources. Those initial allocations have subsequent consequences for the functioning of internal resource markets and the extent of redeployment flexibility. Second, value can be added by improving internal resource markets and redeployment flexibility. Evaluation of the efficiency with which capital is allocated and the business characteristics that drive capital allocation decisions both need to take internal resource markets and redeployment flexibility into account. In sum, value can be added when capital allocation and resource redeployment are considered jointly. The capital allocation decisions, which take place before resource redeployment, can target resources with the aforementioned four attributes that are associated with higher efficiency of internal resource markets and higher redeployment flexibility.

Conclusion

This discussion applied a resource and capability lens to resource allocation and developed three illustrations of the potential resource-based theories have to contribute to resource allocation research. First, the lens was applied to frame capital investments as investing in capabilities. The framing provides a theoretical path connecting the strategic purpose of investments, through value creation from resource commitments, to the creation of competitive advantage. Second, resource allocation for the purpose of capability development was related to a resource-based model of asset accumulation. Placing resource allocation decisions in the context of capability development suggests that key features of the asset accumulation process can usefully inform research on the resource allocation process. Third, corporate capital allocation was connected to resource redeployment in multibusiness firms. This connection explicates ways in which corporate headquarters can add to firm value.

No single theoretical perspective can capture the complexities of resource allocation. The arguments presented here are drawn from resource-based theories and therefore are economic ones. They do not capture the behavioral, social, and political processes of resource allocation in a firm, but they do offer a framing for examining those processes in terms of economic drivers and outcomes. A resource and capability lens on resource allocation offers several benefits that make it particularly useful.

The concept of a resource in resource-based theories is broad and captures financial and nonfinancial resources. This breadth of conceptualization facilitates joint consideration of their allocation, including the conversion of financial to nonfinancial resources, within the same theoretical framework. Another benefit is that resource-based theories of value creation apply to both competitive and corporate strategies. As a result, allocation of resources at the corporate level to businesses and to initiatives within businesses can more readily be integrated in a single model. This perspective also has the benefit of having been used in research on a broad range of strategic management topics, thus offering a path for bridging research on the resource allocation process and numerous strategy content areas.

Connections between resource-based theories of strategy and strategy research on resource allocation have not been well developed, but as the illustrations provided here demonstrate, the potential to develop those connections clearly exists and offers numerous opportunities for researchers to pursue.

Footnotes

Notes

References

Amit

Schoemaker

P. J. H.

1993. Strategic assets and organizational rents. Strategic Management Journal, 14: 33-46.

Anand

Kim

2016. Resource characteristics and redeployment strategies: Toward a theoretical synthesis. Advances in Strategic Management, 35: 155-184.

Ansoff

H. I.

1965. Corporate strategy. New York: McGraw-Hill.

Arrfelt

Wiseman

R. M.

Hult

G. T. M.

2013. Looking backward instead of forward: Aspiration-driven influences on the efficiency of the capital allocation process. Academy of Management Journal, 56: 1081-1103.

Arrfelt

Wiseman

R. M.

McNamara

Hult

G. T. M.

2015. Examining a key corporate role: The influence of capital allocation competency on business unit performance. Strategic Management Journal, 36: 1017-1034.

Baldwin

C. Y.

Clark

K. B.

1992. Capabilities and capital investment: New perspectives on capital budgeting. Journal of Applied Corporate Finance, 5(2): 67-82.

Bardolet

Fox

C. R.

Lovallo

2011. Corporate capital allocation: A behavioral perspective. Strategic Management Journal, 32: 1465-1483.

Barney

J. B.

1986. Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32: 1231-1241.

Bower

J. L.

1970. Managing the resource allocation process. Boston: Harvard University, Graduate School of Business Administration.

10.

Bower

J. L.

Gilbert

C. G.

2005. From resource allocation to strategy. Oxford: Oxford University Press.

11.

Bowman

E. H.

Hurry

1993. Strategy through the options lens: An integrated view of resource investments and the incremental-choice process. Academy of Management Review, 18: 760-782.

12.

Bromiley

1986. Corporate capital investment: A behavioral approach. Cambridge: Cambridge University Press.

13.

Burgelman

R. A.

1983. A process model of internal corporate venturing. Administrative Science Quarterly, 28: 223-244.

14.

Busenbark

J. R.

Wiseman

R. M.

Arrfelt

Woo

H.-S.

2017. A review of the internal capital allocation literature: Piecing together the capital allocation puzzle. Journal of Management, 43: 2430-2455.

15.

Butler

Davies

Pike

Sharp

1993. Strategic investment decisions: Theory, practice and process. London: Routledge.

16.

Carter

E. E.

1971. The behavioral theory of the firm and top-level corporate decisions. Administrative Science Quarterly, 16: 413-428.

17.

Chandler

A. D.

1962. Strategy and structure: Chapters in the history of American enterprise. Cambridge, MA: MIT Press.

18.

Dierickx

Cool

K. O.

1989. Asset stock accumulation and sustainability of competitive advantage. Management Science, 35: 1504-1511.

19.

Folta

T. B.

Helfat

C. E.

Karim

2016. Examining resource redeployment in multi-business firms. Advances in Strategic Management, 35: 1-17.

20.

Ghemawat

1991. Commitment: The dynamic of strategy. New York: The Free Press.

21.

Gilbert

C. G.

2006. Change in the presence of residual fit: Can competing frames coexist? Organization Science, 17: 150-167.

22.

Gold

1983. Strengthening managerial approaches to improving technological capabilities. Strategic Management Journal, 4: 209-220.

23.

Helfat

C. E.

Eisenhardt

K. M.

2004. Inter-temporal economies of scope, organizational modularity, and the dynamics of diversification. Strategic Management Journal, 25: 1217-1232.

24.

Helfat

C. E.

Peteraf

M. A.

2003. The dynamic resource-based view: Capability lifecycles. Strategic Management Journal, 24: 997-1010.

25.

Hofer

C. W.

Schendel

1978. Strategy formulation: Analytical concepts. St. Paul, MN: West.

26.

Kogut

Kulatilaka

2001. Capabilities as real options. Organization Science, 12: 744-758.

27.

Levinthal

D. A.

2010. Opportunity costs and non-scale free capabilities: Profit maximization, corporate scope, and profit margins. Strategic Management Journal, 31: 780-801.

28.

Lieberman

M. B.

Lee

G. K.

Folta

T. B.

2017. Entry, exit, and the potential for resource redeployment. Strategic Management Journal, 38: 526-544.

29.

Maritan

C. A.

2001. Capital investment as investing in organizational capabilities: An empirically grounded process model. Academy of Management Journal, 44: 513-531.

30.

Maritan

C. A.

Alessandri

T. M.

2007. Capabilities, real options, and the resource allocation process. Advances in Strategic Management, 24: 307-332.

31.

Maritan

C. A.

Peteraf

M. A.

2011. Building a bridge between resource acquisition and resource accumulation. Journal of Management, 37: 1374-1389.

32.

Noda

Bower

J. L.

1996. Strategy as iterated resource allocation. Strategic Management Journal, 17 (Summer Special Issue): 159-192.

33.

Peteraf

M. A.

2005. Research complementarities: A resource-based view of the resource allocation process model (and vice versa). In Bower

J. L.

Gilbert

C. G.

(Eds.), From resource allocation to strategy: 409-426. Oxford: Oxford University Press.

34.

Peteraf

2014. Resource-based theories. In Teece

D. J.

Augier

(Eds.), The Palgrave encyclopedia of strategic management. London: Palgrave Macmillan.

35.

Peteraf

M. A.

Barney

J. B.

2003. Unraveling the resource-based tangle. Managerial and Decision Economics, 24: 309-323.

36.

Robins

J. A.

1992. Organizational considerations in the evaluation of capital assets: Toward a resource-based view of strategic investment by firms. Organization Science, 3: 522-536.

37.

Singh

Montgomery

C. A.

1987. Corporate acquisition strategies and economic performance. Strategic Management Journal, 8: 377-386.

38.

Souder

Bromiley

2012. Explaining temporal orientation: Evidence from the durability of firms’ capital investments. Strategic Management Journal, 33: 550-569.

39.

Teece

D. J.

1986. Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15: 285-305.