Contingencies within Dynamic Managerial Capabilities: Interdependent Effects of Resource Investment and Deployment on Firm Performance

Strategic Management Journal, Vol. 30, No. 13, pp. 1375-1394, 2009

20 Pages Posted: 14 Feb 2009 Last revised: 22 Oct 2011

See all articles by David G. Sirmon

David G. Sirmon

Texas A&M University

Michael A. Hitt

Texas A&M University - Department of Management; Texas Christian University

Date Written: February 13, 2009

Abstract

Dynamic managerial capabilities focus on managers' resource-related decisions. Asset orchestration, a central component of dynamic managerial capabilities, highlights the importance of integrating (matching) resource investment and deployment decisions. Building on these recent theoretical advances, we examine the contingent nature of resource investment and deployment decisions. The results, based on a sample of banking firms, indicate that firm performance suffers when managers' investment decisions deviate from the norms of rivals for both human and physical capital. However, when deployment decisions support investment decisions, greater investment deviation from rivals, both high and low, generally enhance performance. Specifically, firm performance is optimized by making congruent resource investment and deployment decisions as opposed to maximizing or economizing either decision independently. Therefore, resource management via asset orchestration is vital for superior performance.

Keywords: Dynamic managerial capabilities, Asset orchestration, Resource management, Resource investment, Resource deployment, Contingency theory

Suggested Citation

Sirmon, David G. and Hitt, Michael A., Contingencies within Dynamic Managerial Capabilities: Interdependent Effects of Resource Investment and Deployment on Firm Performance (February 13, 2009). Strategic Management Journal, Vol. 30, No. 13, pp. 1375-1394, 2009, Available at SSRN: https://ssrn.com/abstract=1342615

David G. Sirmon (Contact Author)

Texas A&M University ( email )

430 Wehner
College Station, TX 77843-4218
United States

Michael A. Hitt

Texas A&M University - Department of Management ( email )

430 Wehner
College Station, TX 77843-4218
United States
979-458-3393 (Phone)

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
314
Abstract Views
1,633
rank
104,632
PlumX Metrics