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The current issue and full text archive of this journal is available at www. emeraldinsight. com/0309-0590. htm JEIT 31,8 A holistic approach to acquisition of strategic resources ? Jim Andersen ? ? School of Technology and Society, University of Skovde, Skovde, ? Sweden and School of Business, Malardalen University, Eskilstuna, Sweden Abstract Purpose – The aim of this article is to provide a holistic framework for the acquisition of strategic resources. Design/methodology/approach – The literature dealing with resource creation is reviewed and analyzed from a resource-based point of view.

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The major methods of acquiring resources are identi? ed through the literature review and the applicability of the framework proposed is illustrated with an empirical example. Findings – Three ways of acquiring strategic resources are identi? ed – direct investments, organizational processes, and product market positioning. All three ways of acquisition can be intentional or unintentional. Arguments for using this six-dimension scale are provided through deductive reasoning, literature review, and the empirical example. Research implications/limitations – The study identi? s the six dimensions of strategic resource acquisition.

However, integration of these dimensions is not a subject addressed in this study. Cluster analysis of companies according to these dimensions could enhance our understanding of the characteristics of companies regarding resource acquisition. Originality/value – Whereas previous studies have generally used a single-theory approach, this study highlights the importance of having a holistic outlook when analyzing resource-based competitive advantages. Keywords Resources, Strategic management, Competitive advantage, Human resource management Paper type Conceptual paper 60 Received 16 April 2007 Revised 16 July 2007 Journal of European Industrial Training Vol. 31 No. 8, 2007 pp. 660-677 q Emerald Group Publishing Limited 0309-0590 DOI 10. 1108/03090590710833697 Introduction Since the early 1990s, there has been a shift of emphasis in strategic management research from external factors to internal resources. According to the resource-based view (RBV) (Amit and Schoemaker, 1993; Barney, 1991; Lippman and Rumelt, 1982; Peteraf, 1993; Reed and DeFillippi, 1990; Wernerfelt, 1984), resources constitute the main source of sustainable competitive advantages.

The consequence of this assumption is that resources have to be heterogeneously distributed and imperfectly mobile (Barney, 1991). Thus, according to the RBV, different companies have different con? gurations of resources and these resources cannot easily be transferred between ? rms. The emergence of the RBV has resulted in increased interest in human resource management and development (HRM and HRD) among strategy scholars (Luoma, 2000; Wright et al. , 2001). Since the important contribution by Fombrun et al. (1984) of linking business strategy to human resources, several papers combining the RBV with HRM techniques have been published.

Recent studies have mainly addressed issues The study was ? nanced by grants from the Jan Wallander and Tom Hedelius Foundation, Tore Browaldh Foundation. ? ? such as the relationships between performance and HRM (Dee Saa-Perez and ? Garcia-Falcon, 2002; Joo and McLean, 2006; Lee et al. , 2005; McBain, 2004; Roos et al. , 2004) or how the two ? elds of research can bene? t from each other (Colbert, 2004; Mayson and Barrett, 2006; Wright et al. , 2001). The merging of or attempts to merge, the RBV and HRM have been a contributory factor in the trend toward including HRM activities in the strategic planning process (Karami et al. 2004). Even so, research in the ? eld of RBV has generally been highly descriptive – i. e. describing the circumstances under which strategic resources will result in a competitive advantage. Possession of strategic resources is the core of the RBV; nevertheless, how these resources are acquired has not been a central topic in the resource-based literature. This non-normative approach makes it dif? cult to combine the RBV with the more practical and normative methods that are common in the HRM and HRD literature. From an HRM point of view, and especially from an HRM or HRD practitioner’s point of view, it is more nteresting to examine how strategic resources and competitive advantages can be developed, and to implement appropriate HRM activities based on the result of the strategic analysis. A limited number of studies have investigated how strategic resources are developed or acquired (e. g. Barney, 1986; Godfrey and Gregersen, 1999; Haanaes, 1999; Makadok, 2001). These studies, however, have usually applied a single theory or approach and few studies have addressed the issue of resource creation from a holistic or multi-theoretical point of view.

The purpose of this paper is not to integrate the RBV and HRD, but to review different approaches to and models of resource creation, and to integrate these viewpoints in order to provide an overall framework for acquisition of strategic resources. To illustrate how this framework can be applied to strategic analysis, an empirical illustration is also given. The scheme presented here should make the RBV more accessible to researchers and practitioners in the ? elds of HRD and HRM. Theoretical framework Due to the high number of contributions to resource-based theory, the de? itions and treatments of certain concepts differ. In order to describe resource acquisition, it is therefore important to de? ne key concepts such as resources, capabilities, and resource value. De? ning resources Several classi? cations of resources have been developed. Resources can, for example, be divided further into internal and external resources (Hooley et al. , 1999). External resources usually consist of relations with actors outside the company, such as customers and suppliers. How a company is perceived by others, in terms of its reputation, can also be classi? ed as an external resource (Deephouse, 2000).

In the RBV literature, the main focus has been on internal resources such as human, organizational, and physical resources. According to Rangone (1999), these resources can result in capabilities such as market management capability, production capability, and innovation capability. By using this distinction between resources and capabilities, a resource is a tangible or intangible asset, and a capability is an ability resulting from these assets (Grant, 1991). Treatment of the speci? c ability to create resources has varied in the literature, even among those contributions with resource-based approaches. Concepts such as

Acquisition of strategic resources 661 JEIT 31,8 662 management, entrepreneurship, and dynamic capabilities have been used to describe the ability to generate strategic resources. The debate has concerned whether the managerial or organizational ability to develop (or invest in) strategic resources should be regarded as a strategic resource or not. Several scholars (Barney, 1991; Mahoney, 1995; Wernerfelt, 1984) have chosen to include management and strategic management in the resource concept while others (Godfrey and Gregersen, 1999) have argued for a distinction between the ability to develop resources and resources themselves.

The managerial ability to develop and to utilize strategic resources is, of course, essential but the arguments not to treat strategic management as yet another strategic resource seem valid – and important in order to avoid the problem of circular reasoning. By making a clear distinction between strategic resources and the creation (Godfrey and Gregersen, 1999) and utilization (Amit and Schoemaker, 1993; Wiklund and Shepherd, 2003) of resources, the role of strategic management becomes clearer. By doing this, the tautology of resources creating resources, expressed by Porter (1991) and Priem and Butler (2001a, b), is avoided.

Human resources and the management of human resources can be used as an example to support the notion of separating management from other strategic resources. There seems to be something of a consensus among scholars in regarding employees and their skills and capabilities as a strategic resource. Human resources are thus generally regarded as strategic or potentially strategic resources. If we treat the management (HRM) or the strategic management (SHRM) of human resources as a resource, we are faced with a problem.

Both the process of developing human resources in terms of HRM or SHRM and also the end result (in terms of human resources) is then regarded as a resource. This example illustrates that the arguments for a distinction between management (or managerial resources) and strategic resources seem appropriate. Hence, treating strategic management as being separate from strategic resources is therefore the viewpoint taken in this article. Resource-based value creation A resource is said to generate a value to a ? rm if it can lead to a sustainable competitive advantage (Barney, 1991).

Possession of a strategic resource, however, and thereby the capability of gaining a competitive advantage, does not automatically mean that a ? rm has a competitive advantage. In order for a resource or a capability to generate value to the ? rm, in terms of competitive advantage, it has to be used in organizational processes[1] (March, 1991; Ray et al. , 2004). So, does this mean that a strategic resource, which is used in different kinds of organizational processes, will always generate a competitive advantage in terms of higher pro? tability?

Hard-core supporters of the market-based view usually neglect the fact that the freedom of action is limited by internal factors such as resources. At the other end of the scale, resource-based fanatics usually take for granted that products are sold in the optimal market and thereby neglect the complexity of adopting a suitable market strategy. By de? nition, utilized strategic resources have the potential to generate above-market pro? tability. However, if the products manufactured are not sold in the optimal market, the pro? tability may still be at an average level[2].

Thus, an external or market view is essential in order to understand the value of a resource. Hence, the positioning of the end results (i. e. the products) by adopting the most appropriate market strategy is a consideration that cannot be neglected when analyzing strategic resources. Several scholars (Barney, 1991; Pehrsson, 2000; Porter, 1991) are supportive of the notion of the importance of combining resource and market approaches in order to obtain a holistic view of ? rms and markets. By the de? nitions adopted and argued for so far, resources and capabilities describe what a ? m is capable of doing and processes illustrate what the ? rm is actually doing. Whether or not a competitive advantage will be achieved is the result of the external context the processes are taking place in. By using the concept of organizational processes and the importance of the company’s position in the product market, the utilization aspect of resources becomes more structured. Ways of acquiring strategic resources The seminal contributions to resource-based theory generally took the differences in resource con? gurations between ? ms for granted, and the papers were highly descriptive. If there were any descriptions of how strategic resources are developed, the discussions usually focused on direct investment as the way of acquiring strategic resources (Barney, 1986; Peteraf, 1993; Wernerfelt, 1984). But, differences in resource con? gurations between ? rms can also be explained by factors other than different direct investment decisions. The day-to-day activities that go on within companies in terms of organizational processes and activities undertaken in the product market can also develop strategic resources.

Thus, strategic resources can be acquired in three ways: (1) through direct investments; (2) through organizational processes; and (3) through activities undertaken in the product market. Another important aspect, which cannot be neglected when describing strategic resource acquisition, is whether the strategic resource is acquired by a deliberate decision or whether the difference in resource con? guration is the result of luck (Barney, 1986). By combining the three ways of resource acquisition identi? d and the “intentional”/“unintentional” factor, one can conclude that strategic resource acquisition has six different dimensions, as illustrated in Figure 1. The six methods of strategic resource acquisition are represented by the boxes that make up the top and bottom sections of Figure 1, which illustrate the unintended and Acquisition of strategic resources 663 Figure 1. Model for acquisition of strategic resources JEIT 31,8 664 intended actions that can lead to development of strategic resources.

The three boxes between them represent the value-creation process described in the section of this article entitled “Resource-based value creation”. The gray boxes and the solid arrows represent the most important aspects of the study, whereas the white boxes and the dotted arrows illustrate the value-creation process for gaining a sustainable competitive advantage (SCA). The six dimensions of resource acquisition will now be described by reviewing some of the literature concerning the different descriptions, and by integrating them with resource-based theory.

The descriptions will concentrate on the two essential factors of a strategic resource: the value of the resource and the factor that prevents imitation of the resource. Barney’s (1991) identi? cation of hindrances to imitation will be used when analyzing the barriers to imitation. These are: . social complexity; . causal ambiguity; and . unique historical conditions. Social complexity refers to intangible factors such as social relations and culture, whereas causal ambiguity exists when the linkage between the resource and the competitive advantage is unknown.

Unique historical conditions assert that each ? rm is a unique entity and that the possibility of acquiring resources depends on their place in time. Resource acquisition through direct investment Obtaining strategic resources by a direct investment in the resource itself was the point of departure in several of the early papers on resource-based theory. With this outlook, acquisition of strategic resources is a way of beating competitors in the factor market by buying resources of potentially high value.

How and why certain companies manage to acquire these resources can be explained by information asymmetries (Peteraf, 1993), differences in managerial characteristics (Penrose, 1959), or by luck (Barney, 1986). Intended direct investments in strategic resources are usually the result of information asymmetries concerning the potential value of a given resource (Poppo and Weigelt, 2000). From this investment theory-inspired approach, the future owner of the resource(s) is better able to foresee the potential value of the resource, and is able to make a more accurate cost-bene? analysis than its competitors. Direct investments in strategic resources such as new technology can sometimes be small and numerous (Dickinson et al. , 2001). However, the decisions behind such investments are usually of a one-time nature and, by de? nition, of great importance to the organization. In addition to using information asymmetries in order to explain differences in resource con? gurations, there have been other approaches also. These approaches take the concept of bounded rationality (March and Simon, 1958) and/or different attitudes to risk and uncertainty into consideration (Penrose, 1959).

If all companies had access to the same information and in conditions of uncertainty, companies prepared to take greater risks would choose to invest where more conservative ? rms would choose not to invest. Concepts such as a ? rm’s entrepreneurial orientation (Lumpkin and Dess, 1996), managerial perceptions (Milliken, 1987), or other cognitive factors (Porac and Thomas, 2002) can be used to explain why investment actions in resources are taken or not taken. This does not mean that risk-takers are more successful, but the fact is that they tend to invest in potentially strategic resources to a greater extent.

There will, of course, always be a great number of unsuccessful risk-takers also. An example of intended direct investments in strategic resources would be if a company has another perception of the potential value of highly educated employees in a certain industry, and therefore chooses to invest in these human resources. The perception of the potential value of a new technology or a new distribution channel is another example of direct investment in strategic resources (provided that these resources actually generate a value for the company).

The acquisitions of strategic resources by direct investment described so far have all been initialized by some kind of managerial decision. There can also be cases of unintended direct investments in strategic resources or, put in other words, direct investments that unintentionally result in strategic resources. Several small investment decisions may, for example, result in unintended strategic resources. A company may choose to recruit certain employees without having a speci? c idea of how to exploit the skills of these employees.

The combination of the skills may unintentionally result in unique capabilities, which can result in a competitive advantage. Several investments in different resources over a longer period of time may also result in strategic resources. Examples of such path dependency can be small, routine investments in new product development software on a routine basis, or the recruitment of personnel with speci? c kinds of competence. Over time, and through a combination of these resources, a unique strategic resource in terms of innovation capability may develop.

The distinction between intended and unintended investments is not always clear. These examples do, however, illustrate that strategic resources can be acquired intentionally as well as unintentionally by direct investments. No matter whether the strategic resources are the result of an intended or an unintended direct investment, the value alone is not suf? cient to make the competitive advantage last. There also have to be some factors that limit the possibility of duplication of the resource.

From an investment approach viewpoint, the resource and its characteristics are usually regarded as unique – or at least rare. By acquiring the resource in the factor market, the resource is “off the market” at the same moment as it had been obtained. At least, the total available amount of the resource in the factor market has decreased through the acquisition. Thus, the historical barrier protecting these kinds of investment-based resources is created the moment the resource has been acquired, due to the fact that the resource is no longer available for competitors.

Because the resource is bought or picked from the factor market instead of being built within the organization, factors such as social complexity or casual ambiguity are not as important for protecting the resource. The resources acquired by direct investment are therefore generally protected from imitation due to what Peteraf (1993) refers to as ex ante hindrances to competition. This is especially the case for resources acquired through one-time investments.

Resource acquisition through organizational processes A described earlier, both strategic and non-strategic resources must be utilized in organizational processes in order to create a value for the organization. But this is not a one-way process; when resources are used, processes of organizational learning are initialized as well. These learning-by-doing processes (Arrow, 1962; Dutton and Acquisition of strategic resources 665 JEIT 31,8 666 Thomas, 1984) develop new resources (Hollis, 2002) that may or may not be of a strategic nature. Teece et al. 1997) argue that capabilities must be built and cannot be bought. Makadok (2001, p. 389) develops this notion when he de? nes the role of management by stating that “If capabilities must be built, not bought, the manager’s role must be nearly analogous to an architect than to a stock-picker trying to beat the market”. Strategic resources that result from organizational processes can be developed intentionally, but whereas direct investments in strategic resources are usually a result of a deliberate decision-making, resources resulting from processes are not usually as planned.

This is due to the fact that organizational processes are highly tacit in their nature, and are therefore dif? cult to manage and control (Ambrosini and Bowman, 2002). The idea of developing competitive advantages through organizational processes is a topic central to evolutionary theory (Nelson and Winter, 1982). Each organization is a unique entity shaped by the processes undertaken over time. Unintentionally, companies continuously undergo organizational changes by their routines (Nelson and Winter, 1982) and small day-to-day decisions (Barney, 1994).

These small changes and learning-by-doing outcomes constitute the basis for path dependency, and according to some scholars (Nelson and Winter, 1982; Barney, 1994) these numerous small changes have a greater impact on the organization than big but isolated changes. Organizational learning through organizational processes is thus a self-motivated process and does not require any deliberate decision-making. Decisions are, of course, taken continuously at different levels within the organization. These small decisions shape the organization on a long-term basis. According to Barney (1994, p. 2) “it is through the accumulation of these numerous ‘small decisions’ that a ? rm’s resources and capabilities are developed and exploited”. The decisions, however, are not usually the result of an overt holistic strategy aimed at developing resources. Thus, strategic resources may be developed unintentionally even if they are a result of managerial decisions. Even though there are some dif? culties in managing strategic resource creation through organizational processes, the process of learning from organizational processes, and thereby the development of new resources, can be improved by managerial decisions (Ichijo et al. 1998). This can, for example, be done by the transfer of knowledge within the company between different units (Ghoshal and Bartlett, 1997). Research in knowledge management has identi? ed different ways of managing ? ppel et al. , 1998). These knowledge in order to gain competitive advantages (Schu management tools are, however, usually developed to stimulate knowledge creation in general. This once again illustrates the dif? culties in managing the creation of speci? c strategic resources. Several factors can limit the ossibility of imitation of strategic resources developed through organizational processes. From an evolutionary point of view, actions undertaken over a period of time develop historical barriers to imitation (Foss et al. , 1995). It is dif? cult for competitors to imitate each step in the development of strategic resources. By continuously developing its capabilities, the high-performing company may also gain an advantage in time, which makes it dif? cult for its competitors to catch up in their own learning-by-doing processes.

But whereas strategic resources created through direct investments are generally only protected by historical factors, different uncertainty factors may prevent the imitation of strategic resources developed through organizational processes also. As described earlier, organizational processes are more tacit than resources and are therefore highly socially complex (Gharajedaghi and Ackoff, 1994). There can also be dif? culties in pinpointing which processes have – or how the processes have – developed the strategic resource (Ambrosini and Bowman, 2002).

Hence, what Barney (1991) refers to as social complexity and causal ambiguity can prevent imitation of strategic resources developed through organizational processes. Resource acquisition through product-market positioning Actions taken in the product market can result in strategic resources. A ? rm’s reputation and relationships with its customers are generally regarded as potential strategic resources in resource-based theory. Such external resources can, of course, be developed by producing high-quality products, but the choice of market strategy can also result in strategic resources.

Several studies in industrial organization have identi? ed and examined different barriers to entry into product markets (Porter, 1980; Karakaya and Stahl, 1992; Karakaya, 2002). These studies, however, generally focus on existing barriers to entry in different product markets, and not so much on how these barriers have been created. The industrial organization school of thought has it roots in economics and from a strategy and management point of view, it seems more logical to adopt a more dynamic point of view when analyzing the position in the product market.

A branch of research that has focused on the role of history and the importance of when different actions take place, mainly in the product market, has been labeled ? rst-mover advantage theory. The reviews of Lieberman and Montgomery (1988, 1998) and Kerin et al. (1992) covering the ? rst-mover advantage literature describe this concept in detail. There are, of course, advantages and disadvantages to acting at an early stage and there can be several disadvantages to being the ? rst to move. Mueller (1997) argues that ? st-movers tend to be conservative and reactive at later stages of the business cycle. Robinson and Min (2002) describe the uncertainty of being a pioneer, both in terms of market uncertainty and technological uncertainty. Or, as Robinson and Min (2002, p. 121) put it in a somewhat straightforward way: “The market pioneer is the one with the arrows in its back”. Nevertheless, there can also be several advantages to being the pioneer in the market place. By acting ahead of its competitors, a company can develop a strategic resource in terms of established relationships with its customers.

These relationships may arise due to different demand-based factors. Examples of such factors are switching costs and set-up costs (Mueller, 1997). Switching costs refer to the direct costs to the customer of changing supplier (Porter, 1980), whereas set-up costs are initial costs that will occur once again if the customer chooses to change its supplier – for example, investments in supportive systems that are necessary (Kerin et al. , 1992) for a machine. Another important factor regarding relational resources is habitual factors. Mueller (1997, p. 37) states that “he (the consumer) is a creature of habit, who routinely purchases the same product even though others that would provide comparable levels of quality are offered at the same or lower prices”. Thus, the product of later entrants may be regarded as copies, whereas the initial supplier’s product is seen as the original (Kerin et al. , 1992). These examples of actions taken in the product market illustrate how and why relations established early on can constitute an important strategic resource. Acquisition of strategic resources 667

JEIT 31,8 668 As for resource acquisition through direct investments or organizational processes, acquisition of resources through a repositioning on the product market can be intentional and/or unintentional. To be the ? rst to enter a market or to adapt a new market strategy may, of course, be the result of a deliberate plan to build strong relations with customers. But relational resources may be the result of spin-off effects also. Consider a company that launches a new product, due to the company’s innovative capabilities. By being the ? st to launch the product on the market, it may also gain several of the associated advantages, as previously described. The acquisition of the relational resources may be totally unplanned, however. At the other extreme, a highly market-oriented company can be capable of adapting a market development strategy by ? nding unexploited markets for products already launched in other markets, and thereby be able to develop strategic relational resources in the new markets. Unique historical conditions and social complexities can make relational resources sustainable. The advantages of the ? st-mover in terms of the presence of switching costs and habitual factors can be regarded as historical barriers to imitation. These factors arise due to the early actions in the product market. Habitual factors may also be socially complex. Causal ambiguity, however, is not a solid factor in preventing imitation of strategic resources gained by actions undertaken in the product market. Understanding that strong customer relations may constitute a competitive advantage should not be a great problem, but an understanding of how and why the relations constitute the advantage can be more dif? ult to achieve. Empirical illustration of acquisition of strategic resources In order to illustrate how the proposed model of acquisition of strategic resources can be used, this section contains a description of how a small Swedish mold tool company gained a competitive advantage through a series of actions that resulted in superior long-term pro? tability. The purpose of this empirical example is not to present any normative recommendations on how to develop strategic resources, but to illustrate the complexity in acquiring strategic resources. The importance of a speci? resource or important courses of action taken to gain a competitive advantage depends, of course, on the context regarding timing, the particular industry involved, the size of the company, and so on, and cannot be generalized from a study such as this. To identify how the company broke the industry patterns, which is of course necessary to develop a competitive advantage, four other companies within the mold tool industry will also be examined. The selection of cases was guided by the goal of ? nding ? rms that could be analyzed retrospectively and longitudinally.

Acquisition of strategic resources is generally rare and does not take place very often, and by considering a longer period of time, different changes and also the result of these changes can be analyzed. The main object of the analysis is the high-performance ? rm, and the four other ? rms had performance outcomes that were representative of the industry. By using several case studies, it is possible to compare actions undertaken by the high-performer with the companies that are more representative of the industry in general. By choosing manufacturing companies instead of service companies, resources over and above knowledge (i. . human and organizational resources) can be analyzed. The empirical illustration has two sources of data: annual reports and interviews. Annual reports were collected from the period 1982-2001. The reports were examined and pro? tability and growth were calculated. The focal point of the analysis is the ? ve-year period from 1997 to 2001. However, the earlier results may have had an effect on future pro? tability. For example, investment in training increases the costs of labor for the year (or years) of the investment but may result in higher productivity during subsequent years (Sels et al. 2006). By only analyzing the later years, the costs associated with the investment are neglected. Thus, the ? nancial data from 1982 to 1996 were also examined, in order to identify any differences in past performance. All interviews were conducted face to face with the owner/manager of each company, and lasted approximately two hours. According to Shuy (2002), face-to-face interviews are more suitable than telephone interviews when sensitive or complex issues are to be discussed.

The interviews were semi-structured and covered questions regarding the overall development of the company during the previous 20 years, and how its patterns of behavior differed from those of its competitors. The interviews took place during 2002 and 2003, and all owner-managers had been involved in the company for most of the period discussed in the interviews. The owner-manager of the high-performance company was the ? rst to be interviewed, and an additional interview was conducted with the same person after the other interviews had taken place. The Swedish mold tool industry is dominated by small ? ms. If one excludes companies with less than ? ve employees, the industry consists of 90 companies, none of which have more than 200 employees. The total turnover for the industry during 1997-2001 was 90 billion Swedish kronor per year, and the industry had about 1,500 employees. Relevant ? nancial data for the ? rms and for the Swedish mold tool industry, mainly concerning pro? tability, are given in Table I. As illustrated in Table I, Firm A outperformed the other ? rms (in terms of pro? tability), and fared better than the industry average, during the period analyzed.

Firm A (although not illustrated in Table I) had an average return on assets of 28 percent and a return on equity of 80 percent during 1991-2001. The ? rm can be classi? ed as a company with long-term superior performance in terms of pro? tability. The superior performance can be deduced from its pro? t margin. During the period 1980-1990, Firm A had normal pro? tability. According to the RBV, above-average performance can best be explained by the possession of strategic resources. Thus, the interesting question in this study is how the strategic resource or the strategic resources were acquired by Firm A.

In the Acquisition of strategic resources 669 Firm A ROA (1997-2001, percent) ROE (1997-2001, percent) Pro? t margin (1997-2001, percent) Number of employees (1997-2001) Turnover in Sek (1997-2001, percent) Change in turnover (1997-2001, percent) Solvency ratio (1997-2001, percent) 30 74 20 14 14,696 127 45 Firm B 11 20 9 22 22,730 111 51 Firm C 11 18 12 19 15,028 124 55 Firm D 0 216 0 11 8,686 153 24 Firm E 6 6 4 7 4,369 81 10 Industry 9 19 7 11 11,115 115 32 Table I. Financial data about the ? ve mold tool ? rms and the industry as a whole JEIT 31,8 ollowing sections, the acquisitions (and the absence of acquisitions) of strategic resources will be analyzed by applying the framework for resource acquisition previously presented. Direct investments A signi? cant and somewhat revolutionary change within the machine tool industry during the past 20 years was the introduction of new technologies such as computer-aided design (CAD) and manufacturing software (Ernst, 1997; Kalafsky and MacPherson, 2002a, b). All ? ve ? rms in the study were using these kinds of technologies, but the timing of their investments differed.

Firm A distinguished itself from the other four ? rms in its early investments in numeric-controlled machines in 1982, and in both CAD and CAM (computer-aided manufacturing) in 1986. Firms B and C invested in CNC technology in the middle of the 1980s, in CAD in the late 1980s, and in CAM around 1992. Firms D and E had dif? culty in estimating the time for their investments in CNC technology. However, Firm D began adopting CAD/CAM in 1999 and Firm E invested in these resources in 1997-1998. The analysis of the annual reports does not indicate an immediate effect on the pro? ability of Firm A due to its (at that time) unusual investments. According to the owner-manager of Firm A, the early investments were important for the future performance due to the fact that the employees learned to use this technology in an ef? cient way. Another distinction between Firm A and the other ? rms in terms of changes in resources and capabilities was in the area of investment in human resources. All companies had a very low turnover of employees, and all ? rms regarded this as a competitive advantage. But a competitive advantage can, by de? ition, not be an advantage if all other ? rms have the resource that generates this advantage as well. The difference lies in differences in attitude to formal education. The owner-manager of Firm A claimed that the company “strives to employ highly educated employees, while other small ? rms usually don’t hire academics”. None of the other owner-managers emphasized the importance of formal education. One quarter of Firm A’s employees were civil engineers, one quarter had a high-school leaving certi? cate (or less), and half of them had a degree in engineering.

Firm B had a couple of employees with a degree in engineering while the other employees in Firm B, as well as the employees in the other ? rms, did not have any formal education other than having attended vocational school. Both of the investments described that differentiate Firm A from its competitors can be characterized as intentional direct investments of strategic resources. Although the manager of Firm A was not aware of the speci? c future strategic impact of the investments, the general idea of the investments was to develop future strategic capabilities.

Thus, the investments can be described as being intentional. Organizational processes The investments in physical resources were later imitated by the other ? rms; nevertheless, the time advantage, which resulted in a gap in production capabilities, etc. , was considered an important factor in building a competitive advantage by the owner-manager of Firm A. The combination of skilled workers and more time to optimize the use of new technology by early investments appears to have given Firm A a knowledge advantage.

Thus, due to the fact that Firm A made early investments in physical and human resources, learning-by-doing effects helped to develop its 670 production capability. This production capability enabled Firm A to produce more complex tools, whereas its competitors mainly manufactured uncomplicated products (i. e. mostly standard tools). The process of learning by doing itself was not stimulated by the owner-manager, and can thus be regarded as an unintentional acquisition of a strategic resource in terms of production capability.

Product market positioning Regarding its position in the product market, Firm A had taken actions different from those taken by its competitors by focusing on a few narrow market segments. In the 1980s, Firm A had about 55 customers, and this number had been reduced to eight at the end of the 1990s. The ? rm concentrated on customers who demanded very advanced molding tools, and who were willing to pay for good quality. This was a fundamental change compared to the customer base in the 1980s, and the number of customers was progressively reduced as the ? m abandoned the strategy of “selling everything to everybody”. The other ? rms adopted more diversi? ed market strategies by selling their products to a wider range of customers who did not demand highly complex tools. When Firm A changed its market strategy, it began to outperform its competitors in terms of pro? tability as a result of better pro? t margins. The change of market strategy itself did not result in any observable new resources, in terms of relational resources. The change in market strategy was essential, however, in order to increase pro? tability.

Other companies failed to provide tools of high quality, but when or if the competitors manage to do so, it is possible that the actions taken on the product market would reveal that Firm A managed to develop strategic resources in terms of its relationships with its customers. This, however, was not the result of an intended strategy to develop such strategic relations. The choice to reduce the number of customers was instead based on the fact that that particular market was more pro? table; the possible strengthening of the ? rm’s relationships with its customers was a secondary effect.

Conclusions The proposed model for acquisition of strategic resources provides a holistic picture of how resources can be acquired. By including different ways of resource acquisition and by taking the “luck factor” and also intentional actions into consideration, all forms of creation of strategic resources are included. The empirical example illustrates the importance of conducting longitudinal studies when analyzing the origins of competitive advantages. In the empirical example, managerial decisions concerning investments in physical resources and human resources resulted in self-motivated learning-by-doing processes that ? ally gave rise to a strategic resource in terms of production capability – i. e. the ability to produce highly complex products. These products were then marketed in a narrow but highly pro? table market segment. The case studies also illustrate the importance of using a multi-theory approach when analyzing the acquisitions and utilization of strategic resources. If the cases had been analyzed with a direct investment approach, the importance of the learning-by-doing outcomes and also repositioning in the product market would have been neglected.

If the empirical illustration had been analyzed with a strategic marketing approach, a Acquisition of strategic resources 671 JEIT 31,8 researcher would have overlooked that the resources enabled the pro? table company to adopt the focus strategy. Limitations and future research The study does, of course, have some limitations regarding conclusions that can be drawn and implications. The empirical example is not suitable for use as a set of normative guidelines on how to acquire strategic resources; nor can it be regarded as the most appropriate or ef? cient way to develop production capabilities in general.

The purpose of giving the example is solely to illustrate that the acquisition of strategic resources can be a complex process that can take several years. There can certainly be cases were acquisition of strategic resources is more complicated or more straightforward than described in this example. Another limitation of the study is that it only provides a description of how strategic resources can be acquired. Why some companies are able to create or buy strategic resources is outside the scope of this article. Earlier publications have explained differences in resource con? urations by, for example, the propensity to take risks (Borch et al. , 1999), managerial cognition (Porac and Thomas, 2002), access to information (Poppo and Weigelt, 2000), networks (Jones and Craven, 2003), entrepreneurial orientation (Lumpkin and Dess, 1996). This study has, however, emphasized that strategic resources can be acquired in several different ways, and has provided arguments for using a six-dimensional approach when analyzing acquisition of strategic resources: intended and unintended acquisitions through direct investments, organizational processes, and product market positioning.

By using this six-dimensional approach, emphasis is placed on the complexity of strategic resource creation. The empirical illustration shows that it generally takes a combination of several different processes to gain a competitive advantage, in this particular case: intentional direct investments in physical resources and human resources, unmanaged organizational processes to develop production capabilities, and repositioning in the product market. This also indicates that other approaches may be too aggregated.

Certain companies may, for example, be conservative regarding investment in resources but entrepreneurial in their market activities, or they may be dynamic in their resource investments and static in their marketing efforts. This will be an important area of research in future studies. Factor analysis and cluster analysis according to the six dimensions identi? ed in this study can be used to analyze correlations between the variables and to develop resource-based characterization of companies.

Implications for HRM and HRD This study has several implications for research on HRM and HRD. It has illustrated the central role of HRM for acquisition of strategic resources, both in terms of direct investment in personnel and also techniques for facilitating organizational learning from organizational processes. The study has also illustrated that acquisition of strategic resources can require other actions. An important implication of this is that in general learning and training are seldom suf? cient to allow a company to gain a competitive advantage.

Generally speaking, a combination of several activities is required – but even if a competitive advantage is achieved, it can still be imitated. A training programme and/or employment of individuals with speci? c skills are 672 activities that are less tangible than investments in physical resources (Pfeffer, 1995), but such activities can still be easy to identify and thus be easy to imitate by competitors. However, differences in resource con? gurations – due to previous and future actions – may result in a situation whereby these actions (i. e. recruiting and training) are more bene? cial to certain companies.

Thus, in order to develop a successful HRM or HRD strategy, an analysis of the resources that are available and also of the actions to be undertaken in the product market must be taken into consideration. With limited ? nancial resources for HRD-related activities, prioritization of different training programmes can also be examined. If a company is already producing highly competitive products, the training of market personnel or executives may, for example, be required to achieve a competitive advantage. The most important outcome of the present work, however, is that the study has highlighted the importance of a holistic pproach to HRM and HRD and the model presented has illustrated what factors affect the acquisition of strategic resources and ensure the survival of the company in the long run. In the empirical example, HRM-related activities in terms of recruitment and development of human resources – in combination with relational and physical resources – generated competitive advantages. The notion of the importance of having a strategic approach to development and management of human resources has been put forward by several authors (Butler et al. , 1991; Colbert, 2004; Fombrun et al. 1984), and this study has hopefully shed some light on this idea. Notes 1. Concepts such as routines (Grant, 1991; Nelson and Winter, 1982), organization (Barney, 1994), and management (Amit and Schoemaker, 1993) have also been used to describe the process of resource utilization. In this study, the concept of organizational processes is used to describe resource utilization (arguments for combining a process or evolutionary perspective and RBV have been presented by Ray et al. (2004) and Foss et al. (1995), among others). 2. This is at least the case regarding competitive advantages resulting from differentiation strategies.

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T. and Min, S. (2002), “Is the ? rst to market the ? rst to fail? Empirical evidence for industrial goods business”, Journal of Marketing Research, Vol. 39 No. 1, pp. 120-8. ? Roos, G. , Fernstrom, L. and Pike, S. (2004), “Human resource management and business performance measurement”, Measuring Business Excellence, Vol. 8 No. 1, pp. 28-37. Sels, L. , De Winne, S. , Maes, J. , Delmotte, J. , Faems, D. and Forrier, A. (2006), “Unravelling the HRM-performance link: value-creating and cost-increasing effects of small business HRM”, Journal of Management Studies, Vol. 43 No. 2, pp. 319-42. ? ppel, J. Muller-Stewens, G. and Gomez, P. (1998), “The knowledge spiral”, in von Krogh, G. , ? Schu Roos, J. and Kleine, D. (Eds), Knowing in Firms, Sage Publications, London, pp. 240-52. Shuy, R. (2002), “In-person versus telephone interviewing”, in Gubrium, J. and Holstein, J. (Eds), Handbook of Interview Research, Sage Publications, London, pp. 537-57. Teece, D. J. , Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18 No. 7, pp. 509-33. Wernerfelt, B. (1984), “A resource-based view of the ? rm”, Strategic Management Journal, Vol. 5, pp. 71-80. Wiklund, J. and Shepherd, D. (2003), “Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized business”, Strategic Management Journal, Vol. 24 No. 13, pp. 1307-14. Wright, P. M. , Dunford, B. B. and Snell, S. A. (2001), “Human resources and the resource based view of the ? rm”, Journal of Management, Vol. 27 No. 6, pp. 701-21. About the author ? ? Jim Andersen received his PhD in Industrial Economics and Organization from Malardalen ? University. He is currently employed as a senior lecturer at Malardalen University and at the ? University of Skovde.

His research concentrates mainly on strategic management, with special interest in the resource-based view and entrepreneurial strategies. He teaches strategy and organization and is also currently working as an evaluator of an EU Interreg III project regarding the knowledge economy in small municipalities (Capture – The Knowledge Network). He has ? also worked as a product manager. Jim Andersen can be contacted at jim. [email protected] se Acquisition of strategic resources 677 To purchase reprints of this article please e-mail: [email protected] com Or visit our web site for further details: www. emeraldinsight. com/reprints

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