Strategy and Uncertainty: Resource-Based View, Strategy-Creation View, and the Hybrid Between Them

Abstract

The resource-based view (RBV) makes a significant contribution to strategy by explaining the relationship between resources and firm performance. Particularly in low uncertainty markets, executives have the foresight and time to build strategically valuable resources in current markets and leverage them into related markets. RBV is also relevant for understanding strategies for market entry, extending the value of technology resources, and broadening the locus of resources within ecosystems. Conversely, in high uncertainty markets like nascent or disrupted ones, RBV seems less germane. Resources may not yet exist or their value (and rarity) may be indeterminate (or changing). Here, we contribute the Strategy Creation (SC) view—joining strategizing by doing, thinking, and shaping. It offers a strategic logic that fits highly uncertain markets. Finally, we contribute the insight that RBV and SC are complements under moderate uncertainty, such as growth markets and technology transitions. Overall, we propose that uncertainty forms a crucial boundary condition for RBV that distinguishes between qualitatively different strategic logics.

The effect of government support on Bureaucracy, COVID-19 resilience and export intensity: Evidence from North Africa

“…Thus, in Powell and Dent-Micallef’s (1997) view, firm performance is positively associated with endemic structural features including little formal bureaucracy. Nevertheless, in times of grave uncertainty, Furr and Eisenhardt (2021) maintain that firms’ superior performance is not exclusively occasioned by the quality of resources held, but also by the array of complementary routines adopted to navigate a crisis. In this sense, the relationship between resilience and exporting can be examined through (1) direct and (2) indirect export routines aimed at sustaining performance.…”

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“…Yet in other ways, charting a global strategy for digital transformation is new. For example, Furr and Eisenhardt (2021) describe the increasing relevance of the strategy creation view—that is, a strategic perspective that is appropriate for conditions of high uncertainty such as occurring in nascent and transforming markets. These are the very markets that digital transformation often ignites.…”

“…Thus, when product development requires extensive coordination and integration, firms as mostly solo independent entities (Bremner & Eisenhardt, 2022) are likely to be most effective (Furr & Shipilov, 2018; Jacobides et al, 2018). This is particularly true under high uncertainty (Furr & Eisenhardt, 2021).…”

Elgar Introduction to Designing Organizations

“…History teaches practitioners that technological change is inexorable. As Furr and Eisenhardt (2021) remind us, the shift from mechanical engineering resources to electronics and software has been slow. Established automakers had time to prepare for the shift but are still playing catch-up to a start-up, Tesla.…”