Kunc, Martin and Morecroft, John D. W.. (2010) Managerial decision making and firm performance under a resource-based paradigm. Strategic Management Journal, Vol.31 (No.11). pp. 1164-1182. ISSN 0143-2095

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Abstract

A framework is presented that connects managerial decision making to resource building and firm performance. The framework takes a behavioral view of decision making and distinguishes two distinct decision-making processes. First there is the creative conceptualization of new resource configurations that are intended to deliver competitive advantage. Then there is the painstaking development of resources required to implement strategy. We argue that heterogeneity in the resources of rival firms arises from the interplay of these two processes: resource conceptualization and resource development. Heterogeneity spawns performance differences that can be explained ex ante from characteristics of managerial decision-making processes. We illustrate the approach in a simulated decision-making environment representing a highly competitive and dynamically complex industry. Results from repeated simulation experiments conducted with executive and MBA students show vast differences in performance among firms, even when they started with identical resource positions. In a departure from traditional resource-based literature, we explain how these differences stem from path dependent accumulation of resources and spontaneous variety in the way rivals conceptualize resources. Copyright (C) 2010 John Wiley & Sons, Ltd.

Item Type:	Journal Article
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Strategic Management Journal
Publisher:	John Wiley & Sons Ltd.
ISSN:	0143-2095
Official Date:	November 2010
Volume:	Vol.31
Number:	No.11
Number of Pages:	19
Page Range:	pp. 1164-1182
Identification Number:	10.1002/smj.858
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
URI:	http://wrap.warwick.ac.uk/id/eprint/5007

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