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Reconfiguring firm resources: architectural innovation and corporate structure

Author: Galunic, D. Charles ; Eisenhardt, K. M.INSEAD Area: Organisational Behaviour Series: Working Paper ; 97/93/OB Publisher: Fontainebleau : INSEAD, 1997.Language: EnglishDescription: 35 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: Research in the resource-based theory of the firm has emphasized the competitive advantage of firms developing dynamic capabilities, i.e. capacities to create and develop novel productive assets. One particular logical motor used in theorizing about such capabilities has been the notion of recombinatorial or architectural innovation, that is where existing components of some system are reconfigured in novel and productive ways. We attempt to extend our thinking about such processes within the large, multiunit corporation. We present a process model of how resource recombinations may operate at this level. Our findings suggest the usefulness of envisaging corporate divisions as combinations of capabilities and product-market areas of responsability that may be recombined in various ways. We present a general framework for this process and detail the logic by which it can occur. We explore and develop the idea of dynamic communities as a source of dynamic capabilities at the corporate level of analysis
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Research in the resource-based theory of the firm has emphasized the competitive advantage of firms developing dynamic capabilities, i.e. capacities to create and develop novel productive assets. One particular logical motor used in theorizing about such capabilities has been the notion of recombinatorial or architectural innovation, that is where existing components of some system are reconfigured in novel and productive ways. We attempt to extend our thinking about such processes within the large, multiunit corporation. We present a process model of how resource recombinations may operate at this level. Our findings suggest the usefulness of envisaging corporate divisions as combinations of capabilities and product-market areas of responsability that may be recombined in various ways. We present a general framework for this process and detail the logic by which it can occur. We explore and develop the idea of dynamic communities as a source of dynamic capabilities at the corporate level of analysis

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