Toward a cyclical model of resource alteration

Abstract: Strategy work is principally about resource alteration. As managers attempt to alter their organizational resources, they need to ask two questions: “What are our resources?” and “How can we use these resources?” Managers will probably have little difficulty answering these questions in the case of tangible resources, e.g., tools, money, and facilities. However, in the case of intangible resources e.g., intellectual property, brands, and goodwill, these questions become more difficult to answer. And in the case of abstract resources, e.g., attention, creativity, and culture, the answers become even more elusive.

 

The mainstream advice to managers is that they should accurately assess their organizational resource base and unambiguously understand how these resources link to performance before they attempt to alter resources. This dissertation investigates how resource assessments actually take place in practice, how resource understandings shape resource alteration choices, and how resource alteration, in turn, shapes how managers understand their organizational resources. Three fine-grained studies highlight the contentious aspects of resource alteration. The studies show how managers try to find advantageous uses of resources they do not yet possess in order to solve problems that they often do not fully understand. The studies show also how managers, depending on their hierarchical and functional area memberships, come up with different answers to what resources they have and how these resources can be used. Not more or less accurate, just different.

 

A theoretical model is proposed that depicts resource alteration as a perpetual cycle. By combining cognitive theory and practice theory, the model attempts to capture how activity configurations shape both practical and conceptual resource understandings and how these resource understandings predispose actors to certain resource alteration choices. The model also proposes that the resulting feedback on these resource alteration proposals, in turn, alter activity configurations. On the basis of the dissertation’s findings and the theoretical model, managers are advised to consider three dimensions of resources—asset characteristics, coordinated activities, and enacted rules—when they attempt to answer resource related questions.