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What Goes on Beneath the Surface of Reconfiguration? The Impact of Redeployment via Activity Addition and Subtraction on Firm Scope and Turnover

Joel Blit

Christopher C. Liu

Will Mitchell

Resource Redeployment and Corporate Strategy

ISBN: 978-1-78635-508-9, eISBN: 978-1-78635-507-2

Publication date: 31 August 2016

Abstract

Strategy research has long understood that reconfiguration of the scope of the activities a firm engages in over time is critical to its long-run success, while under-emphasizing differences in redeployment strategy that underlie apparently similar scope and changes in scope. In this paper, we build on the idea that a firm’s number of activities (scope) and change in activities (turnover) arise from two fundamental rates of redeployment: the rate at which activities are added and the rate at which activities are subtracted. In net, the turnover rate reflects how actively a firm reconfigures its resource base by redeploying resources via addition and subtraction of activities. We develop a model that links addition and subtraction with the composition of a firm’s activities and then provide an empirical illustration using data from the U.S. Patents and Trademarks Office. As an example of one extension, the model can be generalized to incorporate elements of absorptive capacity. The analysis contributes to our understanding of how firms reconfigure their activities and provide managers with a clearer understanding of tools that guide redeployment of existing resources.

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Acknowledgements

Acknowledgments

The authors give thanks to Alex Oettl for sharing USPTO data with us. We also thank participants at the Academy of Management, the Maryland Entrepreneurship Conference, and the Conference on Corporate Strategy and Resource Redeployment. Lastly, we thank the editors and reviewers for helpful comments. Joel Blit and Chris Liu thank the INET/CIGI foundation for project funding.

Citation

Blit, J., Liu, C.C. and Mitchell, W. (2016), "What Goes on Beneath the Surface of Reconfiguration? The Impact of Redeployment via Activity Addition and Subtraction on Firm Scope and Turnover", Resource Redeployment and Corporate Strategy (Advances in Strategic Management, Vol. 35), Emerald Group Publishing Limited, Leeds, pp. 185-216. https://doi.org/10.1108/S0742-332220160000035008

Publisher

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Emerald Group Publishing Limited