Session 55

Risk, uncertainty and competitive advantage

Track E

Date: Monday, October 8, 2012

 

Time: 08:00 – 09:15

Paper

Room: Club B


Session Chair:

  • Thomas P. Moliterno, University of Massachusetts, Amherst

Title: Matching Uncertainty: The Impact of Individual and Organizational Resources on Performance Level

Authors

  • Bertrand Quelin, HEC-Paris
  • Deborah Philippe, HEC-Lausanne

Abstract: A central tenet of the RBV is that firms possessing strategic resources will be able to sustain a competitive advantage. This article uses panel data on the Formula One World Championship races to investigate which resources and articulation of resources allows for the best team performance. We participate to the RBV debate on the link between resources and performance by conceptualizing resources as uncertainty-mitigators. We suggest that firm performance may be explained by the possession of multi-level resources that can mitigate different sources of uncertainty. We further propose that depending on the nature of the external environment, there might be optimal resource configurations.

Title: On the Causality, Cause, and Consequence of Returns to Organizational Status

Authors

  • Daniel Malter, Harvard Business School

Abstract: Using an exogenized signal of organizational status, I study the causal effect of organizational status on product prices, the causes for these returns, and their consequences for producers' incentives to invest in quality. Status has a causal effect on prices, primarily benefiting the highest-status producers, suggesting that organizational status leads to sustainable competitive advantage. However, contrary to theoretical claims in the organizational literature, uncertainty is not a necessary condition for returns to organizational status, suggesting that investments in status are valuable independently of residual uncertainty about producer or product quality. Finally, the status hierarchy does not enforce a separating equilibrium in producers’ quality choices, suggesting that the effect of status on the maintenance of "social order" is less severe than previously thought.

Title: Slack, Business Risk & Firm Performance

Authors

  • Anurag Sharma, University of Massachusetts-Amherst
  • Chetan Chawla, North Central College
  • Thomas P. Moliterno, University of Massachusetts, Amherst

Abstract: We theorize and then examine the role that business risk plays in moderating the relationship between slack and firm performance. Using a sample of large manufacturing firms during the period 2000 through 2009, we show that business risk reinforces the positive influence of available slack but it changes the impact of recoverable slack from negative to positive. Business risk also severs the link between potential slack and performance. These results contribute to a better understanding of the role of risk in understanding the relationship between slack and performance, and raise questions about how risk interacts with the organizational capabilities, including human capital. Our full model explains about 19% of the variance in firm performance.

Title: Strategic Risk Management and Corporate Value Creation

Authors

  • Torben Juul Andersen, Copenhagen Business School
  • Oliviero Roggi, University of Florence

Abstract: Corporations fail when they are unable to deal with abrupt environmental changes as observed in recent times of recession, debt crises and extreme market volatility. The ability to handle dramatic turbulence has become an important source of competitive advantage. Yet, surprisingly little research has analyzed the presumed advantages of responding effectively to the implied strategic risks. To this end, we present a new study of effective risk management on panel data from 3,432 firms representing 33,609 annual data points over the turbulent period 1991-2010. We find significant value creation effects and find that resource availability for opportunity investment is important for effective risk handling.

All Sessions in Track E...

Sun: 08:00 – 09:15
Session 270: New Frontiers in the Computational Approaches to Strategy and Organization
Sun: 09:30 – 10:45
Session 271: Competing for Innovation
Sun: 11:15 – 12:30
Session 272: Unified Theory of Industry Evolution
Sun: 15:15 – 16:30
Session 52: Networks and competition
Session 66: Competitive strategies in transition
Mon: 08:00 – 09:15
Session 55: Risk, uncertainty and competitive advantage
Session 64: Diverse strategies: Diversification and the evolution of competition
Mon: 09:30 – 10:45
Session 65: Resourceful competitors: Competitive strategies and the resource based view
Mon: 13:30 – 14:45
Session 54: The dynamics of dynamic capabilities
Mon: 16:30 – 17:45
Session 57: Finding your niche: Niche Strategies and Competitive Advantage
Session 245: Competitors, strategy, and competitive dynamics
Tue: 08:00 – 09:15
Session 56: Competitive dynamics meet competitive strategy
Session 254: Capital Markets and Efficiency
Tue: 11:00 – 12:15
Session 58: Innovation and competitive strategy
Tue: 14:15 – 15:30
Session 60: The sustainability of competitive advantage
Session 61: Value creation and value capture
Tue: 15:45 – 17:00
Session 62: Acquiring competitive success? Mergers and acquisitions
Tue: 17:30 – 18:45
Session 59: Tempus fugit? Competitive strategy over time


Strategic Management Society

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