“…However, one of the key limitations of this growing body of research is the availability of microlevel data on the particular resources that are being redeployed within companies. While some studies have gathered such data (Miller andYang 2016, Blit et al 2016) and others rely on detailed case studies (Hannah et al 2016, Rindova et al 2016 to elucidate the process of resource redeployment, Folta et al (2016, p. 11) call for the development of "stylized facts around resource redeployment" as "a critical starting point" for future research remains outstanding.…”
Section: Resource Redeployment Reconfiguration and Firm Scopementioning
In this study, we identify a novel pattern of deal-making activity-spinoffs followed by acquisitions-that has yet to be analyzed in the corporate strategy literature. We present a set of descriptive results showing that firms undertake spinoffs followed by acquisitions at a rate that is too high to be attributable to random chance. We also find that the acquired businesses are typically more closely related to these companies' remaining operations than are the spun-off subsidiaries, a pattern that is common across companies with different characteristics. Together, these results suggest that firms may use sequential spinoffs and acquisitions to achieve ongoing synergies and improve the allocation of managerial attention within their organizations. We conclude by discussing how our work contributes to ongoing conversations in corporate strategy about patterns of acquisitions and divestitures, resource redeployment, reconfiguration, and firm scope.
“…However, one of the key limitations of this growing body of research is the availability of microlevel data on the particular resources that are being redeployed within companies. While some studies have gathered such data (Miller andYang 2016, Blit et al 2016) and others rely on detailed case studies (Hannah et al 2016, Rindova et al 2016 to elucidate the process of resource redeployment, Folta et al (2016, p. 11) call for the development of "stylized facts around resource redeployment" as "a critical starting point" for future research remains outstanding.…”
Section: Resource Redeployment Reconfiguration and Firm Scopementioning
In this study, we identify a novel pattern of deal-making activity-spinoffs followed by acquisitions-that has yet to be analyzed in the corporate strategy literature. We present a set of descriptive results showing that firms undertake spinoffs followed by acquisitions at a rate that is too high to be attributable to random chance. We also find that the acquired businesses are typically more closely related to these companies' remaining operations than are the spun-off subsidiaries, a pattern that is common across companies with different characteristics. Together, these results suggest that firms may use sequential spinoffs and acquisitions to achieve ongoing synergies and improve the allocation of managerial attention within their organizations. We conclude by discussing how our work contributes to ongoing conversations in corporate strategy about patterns of acquisitions and divestitures, resource redeployment, reconfiguration, and firm scope.
“…By sourcing external knowledge, the firm is placing bets on different markets, knowing that in the future, some markets will turn out to be more profitable than others. Unexpected shifts in market conditions (Miller & Yang, ), revisions in regulations (Hannah, Bremner, & Eisenhardt, ), and technological discontinuities (Lee & Parachuri, )—changes that are often beyond any single firm's control—alter the value of a technology. A veteran in the pharmaceutical industry commented:“It is very difficult to estimate the sales potential of a particular drug candidate.…”
Research Summary: Research on knowledge sourcing has generally treated firms as monolithic entities, even though firms most active in knowledge sourcing often comprise heterogeneous divisions, each possessing specialized knowledge and facing unique market prospects. This study examines how heterogeneity across divisions affects knowledge sourcing by multidivisional firms. We argue that firms source more early‐stage knowledge, whose market prospects are highly uncertain, for low‐performing divisions; by remaining active in the relevant markets, firms keep the flexibility to tap favorable market opportunities should they arise in the future. In contrast, firms source more late‐stage knowledge, whose market prospects are largely revealed, for high‐performing divisions so as to maximize current returns. The intra‐firm heterogeneity, in turn, explains inter‐firm differences in knowledge sourcing. Data from the pharmaceutical industry support these arguments.
Managerial Summary: Firms that source external knowledge often span multiple technological areas and markets, and hence it is not immediately clear what to source and how much to source. This study examines how multidivisional firms tailor their knowledge‐sourcing strategies to differences in performance across their divisions. We find that firms source more early‐stage knowledge, whose market prospects are uncertain, for divisions with low innovation performance. This helps firms prop up those divisions and remain active in the related markets. In contrast, firms source more late‐stage knowledge, whose market prospects are more certain, for divisions with high sales performance. This helps firms leverage the strengths of those divisions and realize immediate gains. Performance differences across divisions inside firms, therefore, can explain differences in knowledge‐sourcing strategies across firms.
“…The findings accentuate the importance of balancing the effort-intense development of resource ties with other actors and the resulting increase in dependencies. In contrast to the literature (Dyer & Nobeoka, 2000;Ozcan & Eisenhardt, 2009;Hannah, Bremner, & Eisenhardt, 2016), DI-ventures developed resource ties in a consecutive manner rather than adding multiple ties at once. DI-ventures strategically developed in-depth organisational resource ties with key actors in ecosystems in order to accumulate organisational capital and leverage external capabilities.…”
Section: Resources and Resource Tiesmentioning
confidence: 93%
“…The often unique organisational resource ties DI-ventures developed emphasise the multivalent opportunities to leverage bottle-neck assets in ecosystems (Hannah et al, 2016;Hannah & Eisenhardt, 2018). In line with the development of activity links, DI-ventures prioritized the development of resource ties along the transaction volume with actors to justify the often resource-intense relationship specific adaptations and/or development of resources (Dyer & Singh, 1998;Dyer & Hatch, 2006;Dyer et al, 2018).…”
Section: Resources and Resource Tiesmentioning
confidence: 99%
“…Developing multiple bilateral resource ties allowed DI-ventures to capitalise on external resources and structural voids in ecosystems (Hannah et al, 2016;Adner, 2017).…”
<p>Designing and strategically developing viable business models is vital for value creation and capture and in turn for the survival and performance of entrepreneurial ventures. However, the widely held firm-centric and static business model perspective appears inadequate to reflect the realities of increasingly blurred industry boundaries, interconnected economies, and the resulting collapse of incumbent value chains. This PhD thesis adds understanding of the dynamic business model development process from an ecosystem perspective. The evolution of ten entrepreneurial ventures’ business models was documented and investigated through longitudinal in-depth case studies over twelve months. Analysing and comparing the cases revealed strategies that resulted in the development of effective interactive structures and robust value co-creation and capture mechanisms. The development of interactive structures, i.e. firm-ecosystem fits, was either supported by a focused or diversified ecosystem integration approach underpinned by heterogeneous interdependencies of value proposition and business model components across ecosystems. The obtained insights allowed the derivation of sets of capabilities that supported the business model development process and enhanced entrepreneurial ventures’ chances of survival. The findings have several implications for advancements of the business model theory. In particular they indicate what integration strategies can inform entrepreneurs’ and managers’ business model design and execution strategies for operating in increasingly complex ecosystems.</p>
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