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How Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence, Organization Science

Abstract

This study examines how historical resource endowments and competencies affect strategic change and its outcomes amid environmental turbulence. Drawing from both behavioral and economics-based literatures, we develop four distinct perspectives regarding the likely effect of resources on strategic change. These four perspectives offer alternative predictions about how and why resource endowments should affect the likelihood or magnitude of strategic change, and how and why they should moderate the relation between strategic change and performance. We examine the predictive power of these four alternative arguments using extensive longitudinal data from a single industry context characterized both by substantial resource heterogeneity and environmental turbulence. Results indicate that organizations possessing greater stocks of historically valuable resources were much less likely to engage in adaptive strategic change, but also that this resource-driven disinclination towards change tended to have a benign or even beneficial effect on performance. We discuss the implications of our theory and findings for the strategic change literature and also for the literature on the resource-based view of the firm.

Type

Article

Author(s)

Matthew S. Kraatz, Edward Zajac

Date Published

2001

Citations

Kraatz, S. Matthew, and Edward Zajac. 2001. How Resources Affect Strategic Change and Performance in Turbulent Environments: Theory and Evidence. Organization Science. 12(5): 632-657.

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