Where do resources come from? The role of idiosyncratic situations

TLDR

The study examines how resources emerge in firms. Analysis of U.S.-based chemical firms reveals that resource emergence is evolutionary, driven by idiosyncratic situations such as technology exhaustion and market expansion, prompting firms to create unique search paths and experiment—sometimes taking backward steps—to find the right investment. © 2004 John Wiley & Sons, Ltd.

Abstract

Abstract In this paper, we examine the emergence of resources. Our analysis of technological capability acquisition by global U.S.‐based chemical firms shows that the emergence of resources is inherently evolutionary. We find that path‐creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches. Two such idiosyncratic situations—technology exhaustion and expansion beyond national markets—trigger firms in our sample to create unique innovation search paths. We also find that along a given path firms experiment in order to find the correct investment—in fact, some organizations seem to take a step backward for two steps forward—further demonstrating the evolutionary nature of the resource creation process. Copyright © 2004 John Wiley & Sons, Ltd.