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Information, market imperfections and strategy

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  • Richard M. Cyert
  • Praveen Kumar
  • Jeffrey R. Williams

Abstract

In this paper we argue that the organization's search for market imperfections reflects the information dispersion in the economy. We describe, within a Bayesian framework, the relative importance of and the mechanisms by which externally‐ and internally‐based informational rents arise endogenously. We argue that, rather than viewing the strategic planning process as one where the firm must pursue only one source of information, search should be viewed as evolving within a dynamically related system; progressing from externally‐based to internally‐based sources of rent as markets evolve.

Suggested Citation

  • Richard M. Cyert & Praveen Kumar & Jeffrey R. Williams, 1993. "Information, market imperfections and strategy," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 47-58, December.
    • Handle: RePEc:bla:stratm:v:14:y:1993:i:s2:p:47-58
    DOI: 10.1002/smj.4250141006
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    References listed on IDEAS

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    1. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    2. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    3. Williams, J.R., 1992. "How Sustainable is your Competitive Advantage?," GSIA Working Papers 1992-03, Carnegie Mellon University, Tepper School of Business.
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    Cited by:

    1. Agarwal, Rajshree & Echambadi, Raj & Franco, April M. & Sarkar, M. B., 2002. "Knowledge Transfer through Congenital Learning: Spin-Out Generation, Growth and Survival," Working Papers 02-0101, University of Illinois at Urbana-Champaign, College of Business.
    2. Teppo Felin & Stuart Kauffman & Todd Zenger, 2023. "Resource origins and search," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1514-1533, June.
    3. Theresa Lant & Zur Shapira, 2009. "Managerial Reasoning about Aspirations and Expectations," Discussion Paper Series dp498, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    4. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.
    5. Agarwal, Richa & Bhadauria, Artee & Kaushik, Hans & Swami, Sanjeev & Rajwanshi, Rohit, 2023. "ISM-MICMAC-based study on key enablers in the adoption of solar renewable energy products in India," Technology in Society, Elsevier, vol. 75(C).
    6. Blomstermo, Anders & Eriksson, Kent & Lindstrand, Angelika & Sharma, D. Deo, 2004. "The perceived usefulness of network experiential knowledge in the internationalizing firm," Journal of International Management, Elsevier, vol. 10(3), pages 355-373.
    7. Lant, Theresa & Shapira, Zur, 2008. "Managerial reasoning about aspirations and expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 66(1), pages 60-73, April.
    8. Jing Yu Yang & Jiatao Li & Andrew Delios, 2015. "Will a Second Mouse Get the Cheese? Learning from Early Entrants’ Failures in a Foreign Market," Organization Science, INFORMS, vol. 26(3), pages 908-922, June.
    9. Haitian Lu & Yi Tan & Hong Huang, 2013. "Why do venture capital firms exist: An institution-based rent-seeking perspective and Chinese evidence," Asia Pacific Journal of Management, Springer, vol. 30(3), pages 921-936, September.
    10. Joel A. C. Baum & Paul Ingram, 1998. "Survival-Enhancing Learning in the Manhattan Hotel Industry, 1898--1980," Management Science, INFORMS, vol. 44(7), pages 996-1016, July.
    11. Larry J. Menor & M. Murat Kristal & Eve D. Rosenzweig, 2007. "Examining the Influence of Operational Intellectual Capital on Capabilities and Performance," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 559-578, May.
    12. Marcus Matthias Keupp & Maximilian Palmié & Oliver Gassmann, 2011. "Achieving Subsidiary Integration in International Innovation by Managerial “Tools”," Management International Review, Springer, vol. 51(2), pages 213-239, April.
    13. Cyert, Richard M. & Kumar, Praveen, 1996. "Economizing by firms through learning and adaptation," Journal of Economic Behavior & Organization, Elsevier, vol. 29(2), pages 211-231, March.
    14. Chen, Stephen & Lin, Nidthida, 2019. "The effect of inter- and intra-organizational distances on success of offshored outsourced innovation: A configurational approach," Journal of Business Research, Elsevier, vol. 103(C), pages 519-529.
    15. Pushpinder Gill & Stephen K. Kim, 2021. "From franchisee experience to customer experience: their effects on franchisee performance," Journal of the Academy of Marketing Science, Springer, vol. 49(6), pages 1175-1200, November.
    16. Paul Ingram & Tal Simons, 2002. "The Transfer of Experience in Groups of Organizations: Implications for Performance and Competition," Management Science, INFORMS, vol. 48(12), pages 1517-1533, December.

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