Do Organizations Benefit from Changing their Resource Base? A Configurational Perspective

Abstract

Despite a plethora of studies examining the contribution of resources to firm performance, little is known regarding how the extent and type of change to a firm’s resource base affect firm performance. Prior research has focused on studying one change mechanism at a time, rendering our understanding of how multiple change mechanisms simultaneously influence firm performance limited. Accordingly, we employ fuzzy-set analysis to investigate how four change mechanisms – resource inflow, resource outflow, resource development and orchestrating resource replacement – configure with organizational munificence and strategy and, in concert and equifinal ways, affect performance. Utilizing a unique dataset from the Spanish premier soccer league for the years 2002- 2013, we uncover a complex interplay between organizational characteristics, the four change mechanisms, and firm performance. Further, we discover that while organizational munificence is not necessary for high performance, resource- scarcity is necessary for low performance. Overall, our results suggest that some change mechanisms behave synergistically with other change mechanisms, that moderate levels of overall change to the resource base are best, and that high performing organizations are more likely to utilize the change mechanisms than low performing organizations. Implications for the study of firm resources and capabilities are discussed.