haku: @indexterm OPPORTUNITY COSTS / yhteensä: 47
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| Tekijä: | Levinthal, D.A. Wu, B. |
| Otsikko: | Opportunity costs and non-scale free capabilities: profit maximization, corporate scope, and profit margins |
| Lehti: | Strategic Management Journal
2010 : JUL, VOL. 31:7, p. 780-801 |
| Asiasana: | companies diversification opportunity costs industries |
| Vapaa asiasana: | dynamics capabilities resource-based view models |
| Kieli: | eng |
| Tiivistelmä: | In this study, a clear analytical distinction is made btw. scale free capabilities (hereafter as: capbs.) and those subject to opportunity costs (herein as: o-cost/s) having to be allocated to one use or another, thereby shifting the discourse back to Penrose's (1959) original argument on the stock of organizational capbs. The existence of resources and capbs. allocated across alternative uses implies that profit-maximizing (here as: p-max.) diversification (as: divn.) decisions must based on the o-cost/s of their use in one domain or another. This o-cost/s logic provides a rational explanation for the divergence btw. total profits and profit margins. Companies make p-max. decisions in order to increase total profit through divn. when their industries with current competition get relatively mature. Due to the spreading of these capbs. across more segments, it may be observed of firms' p-max. divn. actions leading to total profit growth but lower average returns. The model offers an alternative explanation for empirical observations as to the divn. discount etc. |
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