Toward a Pecking Order Theory of Strategic Resource Deployment

35 Pages Posted: 8 Aug 2015

See all articles by William Schulze

William Schulze

University of Utah

David L. Deeds

University of St. Thomas - Opus College of Business; Case Western Reserve University - Department of Marketing and Policy Studies

Robert Wuebker

University of Utah - David Eccles School of Business; University of St. Gallen

Roman Kräussl

Luxembourg School of Finance; Hoover Institution, Stanford University

Date Written: August 6, 2015

Abstract

A premise of the capabilities perspective in strategy is that firm-specific capabilities allow some firms to be unusually adept at exploiting growth opportunities. Since few firms have the capacity to internally generate the quantity or variety of strategic resources needed to exploit growth opportunities, the ability to externally acquire complementary resources is critical to the acquisition of competitive advantage. However, the external sourcing of resources exposes the firm’s strategic resources to risks of expropriation. We argue this threat gives capable firms incentive to use internally generated strategic resources to pursue growth opportunities before turning to external sources. A pecking order theory of strategic resource deployment is implied. Data from a 22-year sample of cross-border investment partnership decisions made by U.S.-based venture capital firms provide strong support for our theory.

Keywords: Resource Acquisition, Dynamic Capabilities, Venture Capital, Pecking Order Theory

JEL Classification: G24, D23

Suggested Citation

Schulze, William and Deeds, David L. and Wuebker, Robert and Kraeussl, Roman, Toward a Pecking Order Theory of Strategic Resource Deployment (August 6, 2015). Available at SSRN: https://ssrn.com/abstract=2640754 or http://dx.doi.org/10.2139/ssrn.2640754

William Schulze

University of Utah ( email )

1645 E. Campus Center
Salt Lake City, UT 84112
United States

David L. Deeds

University of St. Thomas - Opus College of Business ( email )

1000 LaSalle Avenue
TMH 443
Minneapolis, MN 55403
United States

Case Western Reserve University - Department of Marketing and Policy Studies ( email )

Cleveland, OH 44106
United States

Robert Wuebker (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 East Campus Circle Drive
Salt Lake City, UT 84112-9304
United States

University of St. Gallen ( email )

Bodanstrasse 8
SIAW-HSG
St.Gallen, 9000
Switzerland

Roman Kraeussl

Luxembourg School of Finance ( email )

4, rue Albert Borschette
Luxembourg, 1246
Luxembourg
+3524666445442 (Phone)

HOME PAGE: http://www.art-finance.com

Hoover Institution, Stanford University ( email )

Stanford, CA 94305
United States

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