Journal Article
The ability of multi-business firms to redeploy resources across businesses is a principal source of corporate advantage, as evidenced by a plethora of theoretical and empirical research. However, extant theory is silent in clarifying how resource redeployment might impact competitive behavior of rivals. Redeployability reduces irreversible commitments, which have long been recognized to deter rivalry, allow privileged access to scarce resources, and sustain a valuable strategic position. This raises a tension between the flexibility advantages and potential commitment disadvantages from redeployability. Using a dynamic computational model, the authors explore the competitive conditions under which redeployability can be advantageous or detrimental to longterm firm value. In addition to enhancing their understanding of the boundary conditions around the value of resource redeployability, this study also has implications for real option models and the broader dynamic capabilities literature.
Faculty
Associate Professor of Strategy
