Strategic Responses to Shocks: Comparative Adjustment Costs, Transaction Costs, and Opportunity Costs

Strategic Management Journal, Forthcoming

37 Pages Posted: 12 Nov 2018

See all articles by Nicholas Argyres

Nicholas Argyres

Washington University in St. Louis

Joseph T. Mahoney

University of Illinois

Jackson A. Nickerson

Washington University in St. Louis - John M. Olin Business School

Date Written: October 21, 2018

Abstract

Shocks, whether they derive from shifts in demand, supply, regulation, or innovation, can create the need for competitive repositioning by industry participants when they disrupt established sources of competitive advantage. Such situations can therefore create a canonical strategic problem: whether, where, and how to (re-)position following an industry shock. In this paper, we explore the role of comparative adjustment costs in determining competitive advantage in dynamic environments. In so doing, we synthesize contributions from Penrose, Porter, and Williamson we conceptualize the relationship between adjustment costs and related concepts such as resources/capabilities, dynamic capabilities, transaction costs, and opportunity costs.

Keywords: Comparative adjustment costs; transaction costs, opportunity costs; strategic responses; innovation shock

JEL Classification: L1; L2

Suggested Citation

Argyres, Nicholas and Mahoney, Joseph T. and Nickerson, Jackson A., Strategic Responses to Shocks: Comparative Adjustment Costs, Transaction Costs, and Opportunity Costs (October 21, 2018). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3270650

Nicholas Argyres (Contact Author)

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Joseph T. Mahoney

University of Illinois ( email )

1206 South Sixth Street
339 Commerce West
Champaign, IL 61820
United States
217-244-7969 (Phone)
217-244-4102 (Fax)

Jackson A. Nickerson

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-6366 (Phone)
314-935-6359 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
8
Abstract Views
62
PlumX Metrics