This document discusses a conceptual framework linking first-mover advantages (FMAs) with the resource-based view (RBV) of the firm. It examines FMAs in light of a four-step resource management process consisting of: 1) efficient acquisition, 2) bundling/combining, 3) positioning, and 4) maintenance/protection. The framework proposes that firms who are highly skilled at efficiently acquiring resources, bundling resources, and positioning resources are more likely to become market pioneers and enjoy short-term advantages over competitors. However, it also notes that few first movers retain their advantages over the long run as competitors enter the market and the pioneer's initial resource base ages.
A company that has multiple, unrelated businesses. Unrelated businesses are those which (1) require unique management expertise, (2) have different end customers and (3) produce different products or provide different services.
1. Arndt, 1979, Towards a concept of domesticated markets
2. Jaworski et al, 2000, Market-driven vs. driving markets
3. Day, 1981, Strategic market analysis and definition
4. Caldwell et al, 2005, Promoting competitive markets
Assessment of the effect of Cost Leadership Strategy on the performance of L...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
In March
2011, CFO Research conducted a study among 325
senior finance executives at small and midsize companies to learn more about their cost-management achievements in the course of the downturn — and to explore the role that continued cost discipline will play in midsize companies’
growth efforts in the months and years to come.
The Path to Prosperity: CFOs at Small and Midsized Companies on Post-Downturn Cost Control is the second study prepared by CFO Research Services in collaboration with ERA. In the first study, published in May 2009, senior financial executives were looking toward a more resource-conscious, less wasteful company culture. The current study indicates that thanks to cost-reduction efforts, their companies have indeed realized these business benefits.
ERA can help you maintain and likely improve these bottom-line gains while you grow the top.
The intent of globalization is improving efficiency,optimizing markets and taking advantage of the global environment. If Indian firms have the facility to obtain the latest technology in the world, raise finance from the cheapest source and procure materials from the best source in the world, domestic firms will be on par with foreign firms.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
A company that has multiple, unrelated businesses. Unrelated businesses are those which (1) require unique management expertise, (2) have different end customers and (3) produce different products or provide different services.
1. Arndt, 1979, Towards a concept of domesticated markets
2. Jaworski et al, 2000, Market-driven vs. driving markets
3. Day, 1981, Strategic market analysis and definition
4. Caldwell et al, 2005, Promoting competitive markets
Assessment of the effect of Cost Leadership Strategy on the performance of L...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
In March
2011, CFO Research conducted a study among 325
senior finance executives at small and midsize companies to learn more about their cost-management achievements in the course of the downturn — and to explore the role that continued cost discipline will play in midsize companies’
growth efforts in the months and years to come.
The Path to Prosperity: CFOs at Small and Midsized Companies on Post-Downturn Cost Control is the second study prepared by CFO Research Services in collaboration with ERA. In the first study, published in May 2009, senior financial executives were looking toward a more resource-conscious, less wasteful company culture. The current study indicates that thanks to cost-reduction efforts, their companies have indeed realized these business benefits.
ERA can help you maintain and likely improve these bottom-line gains while you grow the top.
The intent of globalization is improving efficiency,optimizing markets and taking advantage of the global environment. If Indian firms have the facility to obtain the latest technology in the world, raise finance from the cheapest source and procure materials from the best source in the world, domestic firms will be on par with foreign firms.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
The main objective of this study was to establish the effect of Mergers and Acquisition (M&A) on a firm’s competitive advantage in the IT industry. A descriptive research approach was adopted with a target population comprising of all employees atHewlett Packard Company (HP) in Nairobi, Kenya.Horizontal mergers were found to be the most common types of mergers. These mergers weremainly driven by external economies of scale, market power, combined complimentary resources and customer service quality. The findings also established that the major elements of competitive advantage were volume of transactions and markets share. External economies of scale, market power and combined complimentary resources contributed positively to competitive advantage while surplus funds and idle resources did not drive competitive advantage. Based on the study,researchers recommended that decisions on M&A should be based on first understanding which facets of the business will be driven by the M&A in order to derive a competitive advantage. In addition, there is need for companies to do progress evaluation of the M&A specifically to review its impact on competitive advantage.
Drawing on and integrating the resource-based view (RBV) and competitive dynamics literature,
this study developed an interaction model to explore competitive contests by investigating how the interaction
between technologically heterogeneous resources and competitive actions affects performance in the nascent
market. The proposed model was examined using structured content analysis and data extracted from more than
3,200 news articles regarding the interfirm rivalry between Google and Apple in the table industry. The findings,
first, indicate that in nascent markets, aggressive competitive action can exert a negative effect on firm
performance. Second, this paper presents empirical evidence supporting the RBV through testing how the
technological resource heterogeneity of these firms contributed to their performance (in terms of technological
value and technological rarity). Finally, we found that technological resource heterogeneity mitigates the
potentially negative effects of aggressive competitive action on the performance of high-technology firms during
the nascent cycle.
Cornell University ILR School[email protected]CAHRS Workin.docxfaithxdunce63732
Cornell University ILR School
[email protected]
CAHRS Working Paper Series
Center for Advanced Human Resource Studies
(CAHRS)
5-1-1995
Employee Compensation: Theory, Practice, and
Evidence
Barry A. Gerhart
Cornell University
Harvey B. Minkoff
TRW Corporation
Ray N. Olsen
TRW Corporation
Follow this and additional works at: http://digitalcommons.ilr.cornell.edu/cahrswp
Part of the Human Resources Management Commons
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mailto:[email protected]
Employee Compensation: Theory, Practice, and Evidence
Abstract
[Excerpt] As organizations continue to face mounting competitive pressures, they seek to do more with less
and do it with better quality. As goals for sales volume, profits, innovation, and quality are raised, employment
growth is often tightly controlled and in many cases, substantial cuts in employment have been made. To
accomplish more with fewer employees calls for effective management of human resources. Typically, the
employee compensation system, the focus of this chapter, plays a major role in efforts to manage human
resources better.
Keywords
employee, compensation, organization, profit, human, resource, manage, pay, market
Disciplines
Human Resources Management
Comments
Suggested Citation
Gerhart, B., Minkoff, H. B. & Olsen, R . N. (1995). Employee compensation: Theory, practice, and evidence
(CAHRS Working Paper #95-04). Ithaca, NY: Cornell Un.
Chapter 2Micro-Foundations of Strategic Advantage Resources, .docxchristinemaritza
Chapter 2
Micro-Foundations of Strategic Advantage:
Resources, Knowledge, Core Competencies, and Dynamic Capabilities
Disney has three key resource portfolios that are all difficult to substitute for any competing firm.
First, a large library of content (characters, personalities, stories, events and memories) that the whole world knows and emotionally connects with;
Second, a large portfolio of synergistic objects (videos, toys, games, books, greeting cards, Internet web pages, and themepark attractions) to build emotional connections upon;
Third, many different ways and places to promote its products (Disney theme parks, The Disney Channel, book and magazine publishers, toy makers, department stores, fast food restaurants, and internet).
These portfolios are based on several resources, of which two are particularly difficult to imitate – a culture focused on inventing and innovating around fun, and a brand name that conveys this to and engages all stakeholders around its mission to deliver fun. As a result, Disney has been able to secure a unique advantage in the marketplace.
Disney has also faced some challenges going into new overseas markets, where some of its cultural practices were viewed as anti-fun (e.g. enforcing a non-smoking policy for its employees, and over-charging for food from the visitors, in France).
Disney was forced to either convince others about the value of its values (e.g about non-smoking) or adapt its own practices so that they truly offer fun (e.g. lower food prices).
With these adaptations, Disney has been successful in accruing sufficient value, in terms of profitability, market share, and reputation.
Source: Adapted from Stroup (2000)
One of the major questions of interest to the strategic management field is how firms may achieve and sustain competitive advantage. Of several answers to this question, in this chapter we focus on the most basic – the micro-foundations of strategic advantage, popularly known as the internal view of strategy. Research on the micro-foundations of strategic advantage has generated several hypotheses. These hypotheses may be classified into four major groups:
1) The Resource-based view (RBV) hypothesis, originating in the works of Penrose (1959) and Wernerfelt (1984).
2) The Knowledge-based view (KBV) hypothesis, originating in the inter-related theories of evolutionary economics (Nelson and Winter, 1982), organizational learning (Senge, 1990) and increasing returns (Arthur, 1994).
3) The Core competence view (CCV) hypothesis, originating in the work of Prahalad and Hamel (1990).
4) The Dynamic capability view (DCV) hypothesis, originating in the work of Teece, Pisano and Shuen (1997) and a call for investigating the micro-foundations of dynamic capabilities (Teece, 2007). These investigations have encompassed the process (Ambrosini, Bowman & Collier, 2009; Helfat et al, 2007), structural (Felin et al, 2012), as well as behavioral aspects of the dev ...
Sustaining Value Creation through Knowledge of Customer ExpectationsIOSR Journals
As the pursuit of knowledge becomes increasingly central to firms’ competitiveness, we argued that knowing what the customer expects of product offerings is a prerequisite for sustaining the delivery of value. Thus, this paper seeks to provide a theoretical contribution to the growing recognition of researches on customer as a source of firms’ competence. By building on extant literature of value creation, customer satisfaction/dissatisfaction, and the theories of firm knowledge creation, we proposed a framework of how firms can sustain value creation through knowledge of customer expectations. We argued that sustaining firms’ value creation resides in the ability of firms to continuously anticipate, integrate and configure knowledge of customer expectations to create product offerings that meet or exceed customer expectations and generate better economic returns than other competing alternative firms
Contents lists available at ScienceDirectJournal of Financia.docxdickonsondorris
Contents lists available at ScienceDirect
Journal of Financial Economics
Journal of Financial Economics 100 (2011) 130–153
0304-40
doi:10.1
$ We
seminar
We than
suggest
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[email protected]
journal homepage: www.elsevier.com/locate/jfec
Employee treatment and firm leverage: A test of the stakeholder theory
of capital structure$
Kee-Hong Bae a, Jun-Koo Kang b,n, Jin Wang c
a York University, Schulich School of Business, Canada
b Nanyang Technological University, Nanyang Business School, Singapore
c Wilfrid Laurier University, Canada
a r t i c l e i n f o
Article history:
Received 14 December 2009
Received in revised form
3 May 2010
Accepted 4 May 2010
Available online 28 October 2010
JEL classifications:
G32
G33
M51
Keywords:
Capital structure
Employee treatment
Stakeholder
KLD rating
Endogeneity
5X/$ - see front matter & 2010 Elsevier B.V. A
016/j.jfineco.2010.10.019
are grateful for comments from Melanie C
participants at the Wilfrid Laurier University a
k especially an anonymous referee for many d
ions. All errors are our own.
esponding author.
ail addresses: [email protected] (K.-H. B
ntu.edu.sg (J.-K. Kang), [email protected]
a b s t r a c t
We investigate the stakeholder theory of capital structure from the perspective of a firm’s
relations with its employees. We find that firms that treat their employees fairly
(as measured by high employeefriendly ratings) maintain low debt ratios. This result
is robust to a variety of model specifications and endogeneity issues. The negative relation
between leverage and a firm’s ability to treat employees fairly is also evident when we
measure its ability by whether it is included in the Fortune magazine list, ‘‘100 Best
Companies to Work For.’’ These results suggest that a firm’s incentive or ability to offer fair
employee treatment is an important determinant of its financing policy.
& 2010 Elsevier B.V. All rights reserved.
1. Introduction
A firm’s nonfinancial stakeholders, such as customers,
suppliers, and workers, can have a significant influence on
its capital structure decisions. Titman (1984) was the first
to point out that the stakeholders’ incentives to make
firm-specific investments affect a firm’s financing decisions.
Titman argues that because stakeholders face switching costs
if the firm is liquidated, their incentives to make firm-specific
ll rights reserved.
ao, Angie Low, and
nd York University.
etailed and helpful
ae),
nsu.ca (J. Wang).
investments depend on the firm’s financial condition.
Because stakeholders’ switching costs are positively related
to the uniqueness of a firm’s products or assets, to maximize
firm value ex ante, firms that have unique products or assets
have strong incentives to maintain lower leverage to reduce
stakeholders’ concerns about the firms’ potential liquidation
risk. Consistent with Titman (1984), several studies show that
firms that produce unique products and those that maintain
bilateral custome.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Accpac to QuickBooks Conversion Navigating the Transition with Online Account...PaulBryant58
This article provides a comprehensive guide on how to
effectively manage the convert Accpac to QuickBooks , with a particular focus on utilizing online accounting services to streamline the process.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
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Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Memorandum Of Association Constitution of Company.pptseri bangash
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A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
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Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
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Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
India Orthopedic Devices Market: Unlocking Growth Secrets, Trends and Develop...Kumar Satyam
According to TechSci Research report, “India Orthopedic Devices Market -Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030”, the India Orthopedic Devices Market stood at USD 1,280.54 Million in 2024 and is anticipated to grow with a CAGR of 7.84% in the forecast period, 2026-2030F. The India Orthopedic Devices Market is being driven by several factors. The most prominent ones include an increase in the elderly population, who are more prone to orthopedic conditions such as osteoporosis and arthritis. Moreover, the rise in sports injuries and road accidents are also contributing to the demand for orthopedic devices. Advances in technology and the introduction of innovative implants and prosthetics have further propelled the market growth. Additionally, government initiatives aimed at improving healthcare infrastructure and the increasing prevalence of lifestyle diseases have led to an upward trend in orthopedic surgeries, thereby fueling the market demand for these devices.
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The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Personal Brand Statement:
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Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
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2. 926 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
1.1. Resource-based view (RBV) of the firm 1.3. Resource management
The RBV explains how firm resources drive differences in firm While many conceptualizations of the resource management
performance. Critics of the RBV assert that broad conceptualiza- process exist, this paper uses Morgan's (2000) conceptualization
tions of firm resources ignore important differences in firm assets because Finney et al. (2005) established empirical support for
and firm abilities (Priem and Butler, 2001). Therefore, scholars Morgan's work. Morgan (2000) conceives of resource manage-
ditinguish between firm resources and firm capabilities (c.f., Amit ment as a four-step process: 1) efficient acquisition (EA), 2)
and Schoemaker, 1993; Dutta et al., 2005; Greenley et al., 2005; bundling/combining (BC), 3) positioning (POS), and 4)
Helfat and Peteraf, 2003; Mahoney, 1995; Makadok, 2001). A maintenance/protection (MP).
resource is a tangible or intangible asset. Resources “can be valued
and traded—such as a brand, a patent, a parcel of land, or a license” 1.3.1. Efficient acquisition (EA)
(Hoopes et al., 2003, p. 890). Individual employee skills are also Firms must possess resources before they can create value with
resources (Hoopes et al., 2003; Lieberman and Montgomery, those resources. However, the firm must pay less for resources
1998). “Resources are converted into final products or services by than they are worth. EA ensures that the price (P) the firm charges
using a wide range of other firm assets and bonding mechanisms” customers exceeds the firm's resource costs (C). Lower resource
[emphasis in original] (Amit and Schoemaker, 1993, p. 35). acquisition costs allow firms to sell products profitably at prices
On the other hand, capabilities are “…a firm's capacity to low enough to entice people to buy. If a firm fails to hold down the
deploy Resources…using organizational processes, to effect a acquisition costs (C), competitors that minimize acquisition costs
desired end” [emphasis in original] (Amit and Schoemaker, can offer the same value at a lower price.
1993, p. 35). A capability is intangible; firms cannot quantify
(i.e., “value”) their capabilities. A capability is a firm's capacity 1.3.2. Bundling/combining (BC)
to undertake a specific activity (Hoopes et al., 2003; Lieberman Following acquisition, the firm creates customer value by
and Montgomery, 1998). Under this framework, resource man- “fusing” single resources into complex products. These offerings
agement is a capability. Resource management is the set of must provide customer value that exceeds the cost paid by the
strategic choices concerning the firm's tangible and intangible firm (V N C). If a firm's strategist succeeds at BC, the firm attains
assets. So strategists can use resource management to generate a complex set of “higher order resources” that are difficult for
SCA (Mahoney and Pandian, 1992; Penrose 1959). rivals to imitate (Morgan, 2000; Morgan and Hunt, 1999).
1.2. Value, price, and cost: The VPC framework 1.3.3. Positioning (POS)
POS shapes the consumer's view of a product (Ries and
SCA does not directly flow from resources that are valuable, Trout, 1986). Even if a firm attains resources at good prices and
rare, inimitable, and non-substitutable (Priem and Butler, 2001; combines them into a desirable product, the product still may
Barney, 1991). Instead, “the relative difference in the amount of not sell. The firm must also create an image (or position) for the
value generated by firms… is elemental to competitive advantage” product that makes consumers want to buy. POS serves to
[emphasis in original] (Priem and Butler, 2001, p. 29). Firm gene- widen the difference between value and price (V − P).
rated “value is the fundamental concept determining the extent of Customers will prefer a firm's offerings as the gap between
competitive advantage” [emphasis in original] (Priem and Butler, the value and price of the offerings widens relative to the gap
2001, p. 29). between the value and price of competing offerings.
Hoopes et al. (2003) explain value's role in the RBV through
a bargaining model that consists of value, price, and cost (see 1.3.4. Maintenance/protection (MP)
also Tirole, 1988). This model illustrates both the buyer's and The unique sequence of EA → BC → POS that produces
the seller's perspectives. Here, buyer and seller bargain over a superior results at one point in time may not provide customer
product's price (P); the product provides value (V) to the buyer value at another time. Firms, therefore, must continually adjust
and costs the seller some sum (C) to produce. “Value is the price their resource management strategies (i.e., must maintain their
a buyer is willing to pay…” [emphasis in original] (Hoopes resources). Similarly, managers must protect resources; man-
et al., 2003, p. 891). Therefore, for the customer, value provided agers cannot allow competitors to duplicate their resources.
must exceed the product's price (V − P). The seller wants to Firms use MP to realign their resource management decisions
maximize the difference in the product's price and cost (P − C). regarding EA, BC, and POS. This paper differentiates between MP
“The supplier's resources and capabilities, in turn, influence the activities relating to efficient acquisition (MPEA), bundling/
value of the good to the buyer and/or the cost of producing it… combining (MPBC), and positioning resources (MPPOS). There-
[T]he firm that produces the largest difference between value fore, the firm uses MP to preserve the gaps between price and cost
and cost has an advantage over rivals” (Hoopes et al., 2003, (P −C), value and cost (V –C), and value and price (V –P).
p. 891–892).
“Value arises from the firm's resources and how those 2. Crafting first-mover advantage (FMA)
resources are managed” [emphasis in original] (Morgan, 2000,
p. 496). One may surmise, therefore, that resource management If a firm a) minimizes resource procurement costs (C) and b)
is the key “lever” the strategist uses to create SCA. extracts value (V) from those resources in excess of the resources'
3. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 927
cost (C), the firm efficiently acquired resources (Morgan, 2000). Kodak's early success illustrates the benefits of linking
Suppose a first mover's resource costs are higher than the resource superior BC to superior POS:
costs of rival firms. If the first mover offers more customer value
“[George Eastman]…designed a system whereby consumers
than the rivals offer from a given set of resources, an FMA is still
took pictures with a returnable camera, mailed in the camera
possible. However, high pioneer resource costs provide a chance
with the exposed film for developing, and received the
for imitators to compete using a low cost strategy.
developed pictures and a reloaded camera. The company's
In the airline industry established “legacy carriers” (such as
slogan, ‘You press the button, we do the rest,’ convinced
Delta, United, and American) have higher costs than newer,
consumers that photography was finally available to
“discount carriers” (such as Southwest and JetBlue) (Anony-
amateurs” (Tellis and Golder, 1996, p. 68).
mous, 2005). These older airlines inefficiently acquire their
resources. As a result, many legacy carriers have declared Therefore:
bankruptcy and cut costs (Manor and Chandler, 2003).
P3A. Firms that combine high skill in a) acquiring resources
Hence, the following propositions:
efficiently, b) bundling/combining individual resources, and
P1A. The level of firm resource costs is negatively correlated c) appropriately positioning resources are more likely to
with the firm's chances of becoming a product pioneer. become market pioneers than are firms that lack these three
skills.
P1B. The level of firm resource costs is negatively correlated
with the firm's chances of becoming a market pioneer. In the short run, market pioneering should increase the firm's
sales, at least while the new product enjoys a monopoly (P3A).
P1C. The level of firm resource costs is negatively correlated
However, this is by no means analogous to a first-mover ad-
with the firm's chances of attaining a first-mover advantage
vantage. Successful market pioneering is certain to attract rivals;
(FMA).
as noted, few market pioneers retain market leadership. So the
BC allows the firm to become a product pioneer. To become a short-term value created by the market pioneer for any given
product pioneer, a firm goes beyond resource acquisition and segment is a function of the pioneer's skill at providing value to
uses BC to create “higher-order” resources (Morgan, 2000; that segment through a) efficient resource acquisition, b)
Morgan and Hunt, 1999). BC helps link resource acquisition and bundling/combining resources, and c) positioning resources —
the products that the firm eventually sells. If a strategist ignores or:
bundling/combining he or she will likely be stuck with a set of
incompatible resources (Wernerfelt, 1984). STCVSEG ¼ f ðFMVEA ; FMVBC ; FMVPOS Þ
Though not the product pioneers, Matsushita, JVC, and Sony
were the first companies to market VCRs successfully to the STCVSEG short-term customer value for a given segment
mass market (Tellis and Golder, 1996). Superior BC was central FMVEA value created by the first mover through efficient
to their success. “At JVC, Yuma Shiraishi, manager of video resource acquisition
recorder development, provided just a few guidelines to his FMVBC value created by the first mover through bundling/
engineers: develop a machine that could sell for $500, while combining
using little tape and retaining high quality picture” (Tellis and FMVPOS value created by the first mover through positioning
Golder, 1996, p. 68). Taken together, this bundle of resources
propelled these three firms to a dominant position in the VCR Suppose the pioneer enjoys a monopoly in a new product
market. In summary: market. Here one need only consider the value created by the
pioneer. The amount of value the pioneer creates for a given
P2. Firms that combine high skill in a) acquiring resources
segment through these three steps determines whether that
efficiently and b) bundling/combining individual resources into
segment buys the pioneer's offering. If rivals subsequently enter
higher-order resources are more likely to become product
the market, one also must consider consumer reaction to the
pioneers than are firms that lack these two skills.
competing products. In summary:
A firm that acquires a valuable set of resources and uniquely
P3B. Firms that combine high skill in a) acquiring resources
bundles/combines them may well become a product pioneer. Still,
efficiently, b) bundling/combining individual resources, and c)
no financial benefit accrues until the firm offers that bundle of
appropriately positioning resources will have higher short-run
resources for sale; (i.e., the firm must also become a market
sales of new products than will firms that lack these three skills.
pioneer). To sell new products successfully, market pioneers must
ensure that they create the proper image – or positioning (POS) – As time passes, the firm's initial resource base will “age”;
for the new product. also, successful market pioneering will almost certainly spur
However, good BC, ironically, may complicate POS. New market entry by rivals. The first three steps of the resource
products may be extremely difficult to position (Suarez and management process (EA → BC → POS) cannot provide long-
Lanzolla, 2005). The potential breakdown between BC and term customer value (LTCV). Over time, the first mover must
POS helps explain why so many product pioneers either a) fail also maintain and protect (MP) the initial resource position.
to become market pioneers or b) become market pioneers but But how may a first mover improve firm resources after
fail to retain their market leadership. market entry? Under this framework, the first mover must
4. 928 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
rethink the three initial resource management decisions while protecting those resources are more likely to attain first-mover
keeping firm resources from competitors. (The labels for these advantages than are firms that lack these characteristics.
three “updating” tasks are: FMVMPEA, FMVMPBC, FMVMPPOS;
Fig. 1 illustrates the links between the FMA and RBV
these tasks describe the value first movers add by updating the
concepts; more specifically, the Figure shows the benefits the
initial decisions regarding resource acquisition, bundling/
first mover stands to gain by successfully managing each of the
combining, and positioning respectively).
four resource management tasks. In doing so, Fig. 1 describes
A look at recent innovations shows that market leadership
how a firm attains FMA.
is difficult to retain. Consider the gaming console and laptop
Fig. 1 encapsulates the argument contained in the preceding
computers:
paragraphs. Resource management is a firm capability and is the
“In the gaming console market…at least six generations of “lever” the firm uses to create FMA. Resource management is a
technology emerged in rapid, succession, each pushing four-step process: 1) efficient acquisition (EA), 2) bundling/
forward a new winner. The same thing happened in hard combining (BC), 3) positioning (POS), and 4) maintenance/
drives, and laptop computers.…laptop technology evolved protection (MP). Firms must first efficiently acquire resources
so quickly that each successor, after, briefly achieving and then bundle/combine these resources into higher order
dominance, was soon supplanted itself” (Suarez and offerings; this allows the firm to create an innovative product
Lanzolla, 2005, p. 126). (i.e., become a product pioneer). To create FMA the firm must
also become the first firm to sell that product (i.e., become a
So, long-term customer value for a given target market is a market pioneer). Positioning involves attracting customers;
function of the value provided to that segment by the market positioning, therefore, allows the firm to succeed as a market
pioneer's initial a) resource acquisition, b) bundling/combining, pioneer.
and c) positioning and d) the market pioneer's subsequent Critically, the firm must complete the resource management
efforts to maintain/protect each of those sets of resources the process. In addition to EA, BC, and POS, the firm seeking FMA
pioneer built in a, b, and c. Or: must also maintain and protect (MP) resources. As time elapses,
firms use MP to realign their resource management decisions
regarding EA, BC, and POS. Firms that combine high skill in a)
LTCVSEG ¼ f ððFMVEA ; FMVMPEA Þ; ðFMVBC ; FMVMPBC Þ;
acquiring resources efficiently, b) bundling/combining individ-
ðFMVPOS ; FMVMPPOS ÞÞ ual resources, c) appropriately positioning resources, and d)
maintaining and protecting those resources are more likely to
attain and then retain FMAs than are firms that lack these
LTCVSEG long-term customer value for a given segment characteristics.
FMVEA value created by the first mover through efficient
resource acquisition
FMVMPEA value created by the first mover through maintain- 3. Late-mover responses
ing/protecting resource stocks
FMVBC value created by the first mover through bundling/ Pioneers can attain FMA; yet, in a given market, most firms
combining will be followers. Research also reveals that late-market entry is
FMVMPBC value created by the first mover through maintain- often profitable (c.f., Srinivasan et al., 2004). Resource
ing/protecting bundles/combinations of resources management can permit late movers to “compete away” FMAs.
FMVPOS value created by the first mover through positioning P5A–P5E evaluates a market in which the first mover is
FMVMPPOS value created by the first mover through main- faced with a rival. For the first time, the customers have the
taining/protecting positioning of firm resources option to buy from a firm other than the first mover. So, P5A–
P5E examines what the first mover must do to retain market
The importance of maintaining/protecting resources is leadership after competitors enter the market. The first
twofold. First, under the RBV, resources are the foundation of mover's ability to create value for a given segment is still a
firm success. Second, firms may build resource stocks only over function of the firm's: a) initial resource management
long periods of time (Dierickx and Cool, 1989; Pettus, 2001). A decisions and b) subsequent attempts to maintain/protect
firm that fails to maintain resources, therefore, faces a long those resources. But here the late mover also creates value for
journey in trying to catch rival firms. the first mover's target market; specifically, the late mover's
Research supports the importance of maintaining and pro- skill at the first three resource management tasks also offers
tecting resources. Success does not flow from a static set of some level of value to the first mover's customers. (The late
resources (McGee and Thomas, 1994). Similarly, scholars assert mover need not maintain/protect resources to take leadership
that order of entry effects tend to dissipate over time (Brown and away from the pioneer but need only devise a product that
Lattin, 1994; Huff and Robinson, 1994). Therefore: provides more value relative to price or cost. The late mover
that elects to stay in the market for a long time will need to
P4. Firms that combine high skill in a) acquiring resources maintain/protect resources.)
efficiently, b) bundling/combining individual resources, c) How does a firm attain superiority when faced with
appropriately positioning resources, and d) maintaining and competition? The first mover's resource management skill
5. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 929
Fig. 1. First-mover advantage and resource management.
determines the first mover's competitive position, relative to value provided to the segment by the pioneers' initial resource
how well rivals manage their resources. Suppose the first management process (EA → BC → POS) and the subsequent
mover provides more value to a given segment. Here the first value created by maintaining/protecting the resource position is
mover can expect to “best” rivals. What if the late mover greater than the total customer relative value provided to the
provides more value to a particular segment? The first mover's segment by the late mover through resource management (EA
leadership will be at an end. A situation in which the pioneer → BC → POS).
and the late mover provide equal value to a customer segment
is possible; but equality will be temporary. In open markets, as ½VSEGfm ¼ f ððFMVEA ; FMVMPEA Þ; ðFMVBC ; FMVMPBC Þ;
firms continually alter their resource bases, customer value
provided also changes. ðFMVPOS ; FMVMPPOS ÞÞŠ N
Consider General Motors. GM's managers claim that they
have many plans aimed at restoring GM's profitability. Seen ½VSEGlm ¼ f ðLMVEA ; LMVBC ; LMVPOS ÞŠ
from this paper's perspective, these initiatives fall under the
headings of maintaining and protecting GM's resource acqui- VSEGfm customer value first mover provides for a given
sition (MPEA), bundling/combining (MPBC), and positioning segment
(MPPOS) capabilities. FMVEA value created by the first mover through efficient
General Motors has taken a number of steps to cut resource resource acquisition
acquisition costs (i.e., more efficiently acquire resources). GM's FMVMPEA value created by the first mover through maintain-
management has pressed a major supplier, Delphi, to cut prices ing/protecting resource stocks
(McCracken, 2006). Similarly, GM has tried to bundle/combine FMVBC value created by the first mover through bundling/
resources differently to produce better cars. GM recently an- combining
nounced plans to spend over half a billion dollars to improve FMVMPBC value created by the first mover through maintain-
engines, transmissions, metal stamping, and body shops (Chon, ing/protecting bundles/combinations of resources
2006). Finally, GM has been using auto shows as venues to FMVPOS value created by the first mover through positioning
reposition GM as a company that can sell more than trucks and FMVMPPOS value created by the first mover through main-
sport-utility vehicles (Lundegaard, 2006). taining/protecting positioning of firm resources
So: VSEGlm customer value late mover provides for a given
segment
P5A. A first mover will outperform a given late mover in LMVEA value created by the late mover through efficient
serving a given segment as long as: the total customer relative resource acquisition
6. 930 R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932
LMVBC value created by the late mover through bundling/ Kodak's multi-faceted innovation made catching up much more
combining difficult for competitors. Consequently:
LMVPOS value created by the late mover through positioning
P5D. Late movers that add value through more than one
Under this framework, then, no “absolute advantage” to market
resource management task will be more successful than those
pioneering exists. Hence, “A firm should focus its resources on the
that add value through a single resource management task.
scenario under which it has the strongest position relative to its
competitors” (Wernerfelt and Karnani, 1987, p. 191). Likewise: P5B, P5C, and P5D pertain to what Schumpeter (1942) refers
to as “creative destruction.” What if a latecomer innovates on
“…Some firms excel at leading whereas others excel at multiple resource management activities? Such a firm has the
following, unless the effects of managerial skills are taken into potential to follow in the footsteps of those firms that have
account in estimating the impact of pioneering on per- “revolutionized the economic structure by destroying the old
formance, one might mistakenly conclude that, for all firms, and creating a new one” (Schumpeter, 1942, p. 83).
the act of pioneering itself will lead to an unambiguous Scholars state that “Firms develop resources over time in a
advantage” (Kerin et al., 1992, p. 48; Moore et al., 1991). complex, path dependent process” (Pettus, 2001, p. 889; see also
Dierickx and Cool, 1989). Hence, in the short run, firms find it
Kerin et al. (1992) propose that market changes tend to weaken difficult to “compete away” rivals' advantages when those
FMAs. This framework helps explain why they are correct. advantages are based on complex, difficult-to-imitate resources.
Assume a late mover enters a market with a radically-innovative The longer a late mover waits to enter a given market, therefore,
product. The new product may destroy the value created by the the longer the first mover can progress down the resource
first mover's resource base. Hence, the length of first-mover development path. Research supports this assertion; Robinson
advantages will be inversely proportional to the rate of and Min (2002) and Coeurderoy and Durand (2004) discovered
technological change in an industry (Suarez and Lanzolla, 2005). that the temporary monopoly enjoyed by a first mover contributes
Scholars suggest that severe market disruptions after market to the first mover's longevity in the marketplace.
pioneering do not solely stem from late movers entering the At least two important qualifications exist in regard to the
market. Consumer changes also play a role. Shoppers who wait preceding paragraph. First, what if a first mover enters a market
to buy improved versions of a formerly-new product may have and then “stands pat” with the original set of resources? This
entirely different preferences than the early adopters who pur- firm will waste the chance to make the resources more difficult
chased from the pioneer. After pioneering, both market and for late movers to imitate. Second, think about a late mover that
product changes are likely; both changes challenge first movers enters a market on the basis of a radical innovation; the late
that attempt to retain their initial advantages. Hence: mover may not need to spend time copying an incumbent's
outdated resource base.
P5B. The amount of product change subsequent to market
In regard to the first qualification, in most cases even a
pioneering will be positively related to the probability of a late
relatively stable resource base will change with time; under
mover becoming the leader in that market.
these circumstances, time elapsed between market pioneering
P5C. The amount of market change subsequent to market and late-mover entry is still a positive for the incumbent.
pioneering will be positively related to the probability of a late Similarly, for the second qualification, radical innovations can
mover becoming the leader in that market. certainly destroy incumbents. True radical innovations, how-
ever, should be relatively rare; copying the first mover's
How may the first mover compete after a rival successfully
resource base (or parts of this base) should be attractive to most
enters with a radical innovation? The only feasible means would
late movers. So:
be a massive investment in a new set of resources. (More
specifically, the first mover would emphasize: FMVMPEA, P5E. Time elapsed between market pioneering and competitors'
FMVMPBC, FMVPOS). Even for those first movers possessing attempts to enter a particular market will be positively linked to
the funds needed to realign their resources, such a change will be the duration of the market pioneer's SCA.
painful. Indeed, “incumbent inertia” is the rule when late movers
enter (Lieberman and Montgomery, 1998).
Consider a late mover that wants to “compete away” the first 4. Conclusion
mover's initial advantages. This framework reveals that the
degree of change introduced by any single innovation is not the During the debates surrounding FMA, critics have pointed
only factor determining how strongly the latecomer challenges out that market pioneering is not synonymous with first mover
the first mover. The quantity of innovations by the latecomer is advantage. This paper examines the tenuous links between
also important. A late entrant that attacks by successfully inno- market-entry timing and SCA. Market-entry timing is not a
vating on more than one resource management task creates a panacea, but is instead one part of firm strategy. Therefore, this
situation in which the first mover must make more changes (i.e., paper considers both the impact of a) creating FMAs and b)
invest more money and time) in an effort to retain the FMA. managing FMAs subsequent to market pioneering. Previous
Again, Kodak in the 1800s was a firm that innovated on multi- frameworks tend to focus on the former issue while ignoring the
ple resource-management tasks (Tellis and Golder, 1996); latter.
7. R.Z. Finney et al. / Journal of Business Research 61 (2008) 925–932 931
While the paper makes no specific predictions as to how agement skill would be a better measure than time spent on
many first movers will retain the lead in their markets, the paper the resource management tasks.
contrbutes to a growing body of work that helps explain why so Measurement of market-entry timing has proven difficult for
few first movers succeed in the long run. Pioneers often invest scholars. Golder and Tellis advocate using the “historical method”
so heavily in the resources needed to bring an innovation to to study FMA (1992). In the historical method, scholars search
market that they cannot bear to adopt a new set of resources as archival material to collect longitudinal data about past events
the market shifts. But, the wise pioneer will “bite the bullet” and (Golder, 2000). Given that Golder and Tellis published several
reinvent the firm's resource base (Chandy and Tellis, 1998). strong studies using the historical method, other scholars should
Indeed, research shows that incumbents have chances to in- also consider adopting the historical method to study FMAs.
novate after market entry (Chandy and Tellis, 2000).
4.3. Extensions
4.1. Managerial implications
The possible extensions of this study are vast; the following
A firm interested in attaining and maintaining a competitive suggestions by no means constitute a comprehensive list.
advantage by pursuing a position as a market or product pioneer Readers should note that the framework in this paper
needs to focus on effective resource management via EA (P1A, assumes that the late mover and the first mover compete only to
P1B, and P1C), BC (P2), POS (P3A, P3B), and MP (P4). In serve a single market segment. Obviously, many companies
addition, prospective first movers should ensure that the four serve more than one “type” of customer; if a late mover can
resource management steps are consistent with the firm's stra- distinguish more than one segment in the first mover's customer
tegy (e.g., differentiation, low-cost). Also, the firm's resource base, then the framework would change considerably. The late
management process must evolve while remaining congruent mover could focus on serving only one “sub-segment” of the
with the firm's strategy (whether or not the strategy remains first mover's market, rather than attempting to compete for
constant or evolves over time). precisely the same segment as the first mover. By narrowing the
Strategists must tailor the firm's resource management focus, the late mover could create a situation where the first
capabilities to attain and maintain an FMA. For instance, in a mover would have difficulty defending the entire target market.
stable environment, MP becomes a key step to protect One extension would be to further consider this type of late-
organizational resources. In a more dynamic environment, EA entry strategy.
becomes a key — a firm should focus on attaining necessary Similarly, the framework compares the first mover to a single
resources at the lowest possible costs. In any environment, BC late mover. But what if many firms enter the market? If more
allows the firm to produce a desirable offering for the target than one late mover enters, the first mover has a much more
market; similarly, in any environment POS explains to the target difficult task ahead. Different segments will value the same set
market why the firm's offerings are relevant and desirable. of resources differently, and the first mover may see the original
Superior resource management allows a firm to translate short- mass market carved into numerous small markets by multiple
term advantages (P3B) into FMAs (P4, P5A). late movers. To compete in each sub-segment, the first mover
would have to devise a different resource management plan for
4.2. Measurability each sub-segment. An extension should address this scenario.
Another extension would be to further explore the
The most valuable extension of this paper would be to test association between Morgan's (2000) four resource manage-
the propositions. Such a study would require measures of the ment tasks and customer value. While customer value is a
two major concepts under study here: resource management function of these tasks, the precise manner in which these
and FMA. Much discussion revolves around appropriate resource management tasks coalesce (additively, multiplica-
measurement when using the RBV; fortunately, Finney et al. tively, etc.) to produce customer value is left as an empirical
(2005) measures each of the four steps in resource man- question. Such a study would likely require longitudinal data
agement. These authors measured the amount of time stra- measuring entry timing, resource management, and perfor-
tegists spent on each of Morgan's four resource management mance from multiple firms.
tasks. (Specifically, they asked respondents what percentage The above paragraphs, therefore, constitute what Wernerfelt
of their time managing resources was devoted to each of the (in a somewhat different context) called “a first cut at a huge can
four resource management tasks; all answers summed to of worms” (1984, p. 180). Nevertheless, Lieberman and
100%.) These authors then linked time spent on resource Montgomery (1998) called for an integration of the RBV and
management to firm strategy. (Specifically, they tested wheth- the FMA literatures; this study answers their call.
er a firm's overall strategy (low cost or differentiation) pre-
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