Paper info

HOW TO COMBINE AND COORDINATE RESOURCES ACROSS FIRMS UNDER UNCERTAINTY

Yonghoon Choi and Yoritoshi Hara

The paper was published at the 34th IMP-conference in Marseille, France in 2018.

Resource combination and coordination across firms is a research topic that is attracting the attention of IMP researchers. Similarly, investigation into the issue of co-alignment between strategies and environmental contexts is critical in strategic management and marketing research. We investigate how alignment among resources, strategies, and environments influence firm performance in business-to-business (B2B) relationships. According to the assumptions of transaction cost economics (TCE), firms can use a strategy of vertical integration to mitigate the costs of a transaction that is hazardous due to resource specificity and uncertainty. Contrary to this proposition, we assume that firms can overcome transaction difficulties without integrating the concerned transactions. We focus on two firm capabilities as alternative measures, namely market power and exploitation capability. We tested our hypotheses by using survey data from large Japanese manufacturers, from a diversity of industries. The results show that, in the case of high resource specificity, vertical disintegration (integration) is the strategy matched to firms with (without) market power for performance enhancement. Further, with respect to performance enhancement, an unintegrated channel strategy matches firms with superior exploitation capability under uncertainty, while an integration strategy is better suited to firms with inferior exploitation capability.