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Organizational Design, Information Transfer, and the Acquisition of Rent-Producing Resources

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  • Michael Lenox

    (New York University)

Abstract

Within the resource-based view of the firm, a dynamic story has emerged in which the knowledge accumulated over the history of a firm and embedded in organizational routines and structures influences the firm's ability to recognize the value of new resources and capabilities. This paper explores the possibility of firms to select organizational designs that increase the likelihood that they will recognize and value rent-producing resources and capabilities. A computational model is developed to study the tension between an organization's desire to explore its environment for new capabilities and the organization's need to exploit existing capabilities. Support is provided for the proposition that integration, both externally and internally, is an important source of dynamic capability. The model provides greater insight into the tradeoffs between these two forms of integration and suggests when one form may be preferred over another. In particular, evidence is provided that in uncertain environments, the ability to explore possible alternatives is critical while in more certain environments, the ability to transfer information internally is paramount.

Suggested Citation

  • Michael Lenox, 2002. "Organizational Design, Information Transfer, and the Acquisition of Rent-Producing Resources," Computational and Mathematical Organization Theory, Springer, vol. 8(2), pages 113-131, July.
    • Handle: RePEc:spr:comaot:v:8:y:2002:i:2:d:10.1023_a:1016039916673
    DOI: 10.1023/A:1016039916673
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    References listed on IDEAS

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    1. James G. March, 1991. "Exploration and Exploitation in Organizational Learning," Organization Science, INFORMS, vol. 2(1), pages 71-87, February.
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    Cited by:

    1. Richard M. Burton, 2003. "Computational Laboratories for Organization Science: Questions, Validity and Docking," Computational and Mathematical Organization Theory, Springer, vol. 9(2), pages 91-108, July.
    2. To, Chester K.M., 2016. "Collaboration modes, preconditions, and contingencies in organizational alliance: A comparative assessment," Journal of Business Research, Elsevier, vol. 69(11), pages 4737-4743.
    3. Zélia Serrasqueiro & Paulo Maçãs Nunes, 2008. "Performance and size: empirical evidence from Portuguese SMEs," Small Business Economics, Springer, vol. 31(2), pages 195-217, August.
    4. Christina Fang & Jeho Lee & Melissa A. Schilling, 2010. "Balancing Exploration and Exploitation Through Structural Design: The Isolation of Subgroups and Organizational Learning," Organization Science, INFORMS, vol. 21(3), pages 625-642, June.

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