"Resource Allocation, Real Options, and Competitive Advantage: A Behavioral Approach"

2016 ◽  
Vol 2016 (1) ◽  
pp. 12251
Author(s):  
Michael J. Leiblein ◽  
John S. Chen ◽  
Hart E. Posen
Keyword(s):  
Resource Allocation ◽  
Competitive Advantage ◽  
Real Options ◽  
Behavioral Approach

Resource Allocation in Strategic Factor Markets: A Realistic Real Options Approach to Generating Competitive Advantage

2017 ◽  
Vol 43 (8) ◽  
pp. 2588-2608 ◽  
Author(s):  
Michael J. Leiblein ◽  
John S. Chen ◽  
Hart E. Posen
Keyword(s):  
Resource Allocation ◽  
Competitive Advantage ◽  
Real Options ◽  
Real Option ◽  
Learning Ability ◽  
Strategic Factor ◽  
Feedback Learning ◽  
Factor Markets ◽  
Allocation Decisions ◽  
Resource Allocation Decisions

This paper develops a realistic real option theory of resource allocation decisions in strategic factor markets. Competitive advantage in factor markets is underpinned by market failures that allow firms to acquire assets at less than their value in use. We recognize that market failure may result from uncertainty regarding the current and/or future value of an asset, which map, respectively, to uncertainty as modeled in the feedback learning and real options literatures. The realistic real option framework we develop grafts insights from the strategic factor market, feedback learning, and real option valuation literatures. We argue that competitive advantage may emerge not only from luck, or ex ante differences in information or complementary assets, but also because firms differ in a specific type of learning ability—the ability to integrate new information to exercise a contingent claim on an asset in a factor market. We dimensionalize these differences in terms of information processing and belief updating, argue that these differences lead to different resource allocation decisions, and suggest how these decisions may generate competitive advantage.

scholarly journals Development of a Resource Allocation Model Using Competitive Advantage

2016 ◽  
Vol 8 (3) ◽  
pp. 217 ◽  
Author(s):  
Sangwon Lee ◽  
Suneung Ahn ◽  
Changsoon Park ◽  
You-Jin Park
Keyword(s):  
Resource Allocation ◽  
Competitive Advantage ◽  
Allocation Model ◽  
Resource Allocation Model

scholarly journals Just-in-Time system in terms of real options

Competitio ◽  
2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Andrea Rozsa
Keyword(s):  
Resource Allocation ◽  
Real Options ◽  
Best Practice ◽  
Real Option ◽  
Corporate Strategy ◽  
Capital Budgeting ◽  
Just In Time ◽  
The Real ◽  
Practice Approach ◽  
Physical Assets

The value creation process in a company and the competitive position are critically influenced by corporate resource allocation and proper valuation of investment alternatives. After the Second World War, capital budgeting and strategic planning emerged as two complementary but different systems for resource allocation. The real options approach developed in the ’80s may provide a useful tool for making a connection between capital budgeting and strategic management. Real options are implicit managerial and operating flexibilities embedded in many non-financial assets and liabilities. In a wider sense: “A real option is the investment in physical assets, human competence, and organisational capabilities that provide the opportunity to respond to future contingent events” (Kogut-Kulatilaka, 2001). This paper shows that Just-in-Time (JIT) system as management philosophy can be regarded as a knowledge-based or capability-based implicit strategy rather than a simple, easy-toimitate best practice approach. Moreover, implementation of JIT can be considered as a strategic investment. The presentation focuses on how the relation among strategic investments, developed technological systems and corporate strategy can be expressed through the real options view.

Towards a Model of Sustainability Capabilities and Competitive Advantage

2014 ◽  
Vol 1 (1) ◽  
pp. 41-57 ◽  
Author(s):  
Santanu Mandal
Keyword(s):  
Information Technology ◽  
Resource Allocation ◽  
Strategic Planning ◽  
Competitive Advantage ◽  
Strategic Resource ◽  
Technology Resources

Firms have lately realized the importance of sustainability because of (1) decreasing resources (2) difficulty in getting adequate and skilled resources. Therefore firms are trying their best to include sustainability considerations in their operational, tactical and strategic planning. In this scenario, this paper makes an attempt to operationalize several kinds of resources existing in an organization from a sustainability perspective and tries to investigate which of these can best help the organization in developing sustainability capabilities which will eventually led the firm to gain competitive advantage. Based on the data collected from 204 executives engaged in different sectors, the findings indicate that except accounting resources, all other resources like information technology, finance, marketing and operations are significant in enabling the firm to develop sustainability capabilities. Relatively, operations resources and information technology resources are the most important predictors of sustainability capabilities and hence firms can focus more on these departments while strategic resource allocation. Finally, the study exhibited that sustainability capabilities do help a firm to gain competitive advantage.

Organizing for Unprestateability

2021 ◽  
pp. 169-184
Author(s):  
Gino Cattani ◽  
Mariano Mastrogiorgio
Keyword(s):  
Competitive Advantage ◽  
Real Options ◽  
Organizational Context ◽  
Innovation Process ◽  
Growth Options ◽  
Multiple Functions ◽  
Classical Sense ◽  
Evolutionary Theories ◽  
Resources And Capabilities

As discussed in the previous chapters, technologies and artefacts embody multiple latent functions and uses that emerge contextually and serendipitously in ways that cannot be easily pre-stated. These multiple functions and uses can be seen as multiple growth options embodied in the technology. This suggests a point of contact between new evolutionary theories and the theory of ‘real options’ and more recent versions of it, such as the theory of ‘redeployability’ of resources and capabilities. At the same time, given that new functions and uses cannot be simply pre-stated, these options must not be seen in a classical sense but rather as ‘shadow options’ that emerge gradually out of their latent state. The aim of this chapter is to explore these connections. We first argue that unpre-stateability urges us to adopt option-based logic during the innovation process. We then propose a shadow-option-based approach to the emergence of new functions and uses, followed by a discussion of the implications for competitive advantage and for the generation of options in an organizational context.

Towards a Model of Sustainability Capabilities and Competitive Advantage

2018 ◽  
pp. 1103-1121
Author(s):  
Santanu Mandal
Keyword(s):  
Information Technology ◽  
Resource Allocation ◽  
Strategic Planning ◽  
Competitive Advantage ◽  
Strategic Resource ◽  
Technology Resources

Firms have lately realized the importance of sustainability because of (1) decreasing resources (2) difficulty in getting adequate and skilled resources. Therefore firms are trying their best to include sustainability considerations in their operational, tactical and strategic planning. In this scenario, this paper makes an attempt to operationalize several kinds of resources existing in an organization from a sustainability perspective and tries to investigate which of these can best help the organization in developing sustainability capabilities which will eventually led the firm to gain competitive advantage. Based on the data collected from 204 executives engaged in different sectors, the findings indicate that except accounting resources, all other resources like information technology, finance, marketing and operations are significant in enabling the firm to develop sustainability capabilities. Relatively, operations resources and information technology resources are the most important predictors of sustainability capabilities and hence firms can focus more on these departments while strategic resource allocation. Finally, the study exhibited that sustainability capabilities do help a firm to gain competitive advantage.

scholarly journals Using Sustainable Competitive Advantages to Measure Technological Opportunities

2013 ◽  
Vol 4 (3) ◽  
pp. 55-64 ◽  
Author(s):  
Josu Takala ◽  
Matti Muhos ◽  
Sara Tilabi ◽  
Mehmet Serif Tas ◽  
Bingli Yan
Keyword(s):  
Resource Allocation ◽  
Competitive Advantage ◽  
Critical Factor ◽  
Medium Size ◽  
Competitive Advantages ◽  
Sustainable Competitive Advantage ◽  
Risk Levels ◽  
Sustainable Competitive Advantages ◽  
Technological Opportunities

Abstract The goal of this paper is to help small and medium size enterprises (SMEs) to find operative competitive advantage. This paper introduces a new method which applies critical factor analysis, risk and opportunities analysis to measure and propose resource allocation for companies in couple of next years. this research shows Knowledge/Technology (K/T) Calculation effect on (Balanced) Critical Factor Index (CFIs) depending on the proportions allocated among the different technological levels (Basic, Core or Spearhead) for each attribute separately. Moreover it helps firms to take balance in resource allocation for each attribute in changing environments on the basis of different level of technology. This paper presents the ’first in the world’ case study on operative sustainable competitive advantage and corresponding risk levels by taking into account technology and knowledge effects for 7 SME companies

Sign in / Sign up

Export Citation Format

Share Document