The Strategy Process in Dynamic Markets

Table of contents

Index of figures

Index of tables

Index of abbreviations

1 Introduction
1.1 Background and objectives
1.2 Outline and structure of the paper

2 Strategic paradigms
2.1 Traditional approaches to strategy
2.1.1 Strategic positioning
2.1.2 The resource-based view
2.2 Complexity theory of strategy
2.2.1 Austrian economics
2.2.2 Dynamic capabilities
2.2.3 Complexity theory

3 Market dynamism
3.1 Determinants for market dynamism
3.2 Necessity of considering market dynamism

4 Strategy process in non-dynamic markets
4.1 General characteristics
4.2 Steps
4.3 Critics of the classical process model and deficiencies in dynamic markets

5 Contributions from the complexity theory of strategy to the strategy process in dynamic markets
5.1 Austrian economics
5.2 Dynamic capabilities
5.3 Complexity theory

6 Design of a new framework for strategy creation
6.1 Setting
6.2 Content
6.2.1 Coordination within system two
6.2.2 Internal control and optimization within system three
6.2.3 Innovation and adaptation within system four
6.2.4 Simple rules within system five
6.3 Comparison of the new framework with the classical process
6.4 Check for validity in dynamic markets

7 Conclusion and implications for research and practice

References

Index of figures

Figure 1: Consequences for organizations from the characteristics of dynamic markets

Figure 2: Example of a traditional process model

Figure 3: Contribution from Austrian economics research to the strategy process,

Figure 4: Contribution from dynamic capabilities research to the strategy process

Figure 5: Contribution from complexity theory to the strategy process

Figure 6: VSM with its three parts and five subsystems

Figure 7: Three levels of recursion in a viable system

Figure 8: Distinction between operational and strategic activities within one recursion

Figure 9: Example of network structure

Index of tables

Table 1: Comparison of strategic positioning, the resource-based view, and the complexity theory of strategy

Table 2: Comparison of static and dynamic markets

Table 3: Comparison of the classical process model and the new framework for strategy creation

Index of abbreviations

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1 Introduction

1.1 Background and objectives

“All businesses today are experiencing an accelerated rate of change. Marketplaces, customers, and competitors are all changing quickly and unexpectedly,” remarks Arthur C. Martinez, Chairman and Chief Executive Officer of Sears, Roebuck & Co.^[1] This pace of change has gone on for many years within economic landscapes, and coping with this change is a key to competitive success. As Michael Dell, founder of Dell Co., explained, “The only constant in our business is that everything is changing. We have to take advantage of change and not let it take advantage of us. We have to be ahead of the game.”^[2]

Traditionally, in the industrial age era companies have been acting on regional and national markets. Consumers were immobile and thus forced to buy products albeit the quality offered. Future action could easily be predicted as change occurred on a periodic and steady rate. Resources were primarily material and financial capital. Management power was concentrated on centralized decisions-making and hierarchical and linear information flows.^[3] As a result, market conditions were relatively stable and more or less predictable. Consequently, strategy has been built upon past experiences and behavioral patterns of consumers and the dominant approaches to strategy were based on stability seeking and uncertainty avoidance through organizational structure and processes.^[4] This perception of markets led to a rather mechanistic strategy process model with linear sequenced steps initiated by Andrews at the beginning of the 1970s.^[5]

Yet, with the beginning of the second half of the 20th century an increasing mobility and acceleration in technological improvement could be witnessed. Since the last decade of the 20th century a decisive shift in the world’s economic, political and social life has been occurring. By the end of the century the emergence of a globally networked society and economy accelerated by computer and communications technology could be noticed. Boundaries between nations, industries, sectors of the economy, organizations, and between functions within organizations seem to have disappeared.^[6] As a result, the practical reality in today’s business environment is becoming more complex and unpredictable.^[7] Environmental and industry changes constantly challenge the validity of existing strategies.^[8] The economy is becoming intertwined and actions of one organization can have a significant impact on other organizations, on the industry as a whole and on the organization itself.^[9]

These turbulences and significant shifts in the environment towards dynamic and globally networked markets, and increasing evidence of company failures due to traditional business models and strategy approaches, imply that traditional paradigms of articulating and creating strategy have to be seriously reconsidered.^[10] Ilinitch, D’Aveni and Lewin even believe “[…] that those paradigms are inadequate for global hyper-competitive environments, although their replacements are not clear yet.”^[11] As economic drivers, past experiences, and behavioral patterns do no longer have great predictive value in today’s complex economic systems^[12], it is no longer possible for organizations to generate strategy on a premeditated and deliberate basis of the company and its environment. The outcomes of an organization’s strategic behavior can hardly be foreseen.^[13] It will be shown that the traditional process model is not able to meet the requirements of those dynamic markets.

This paper is picking up a combination of three perspectives on strategy that are trying to perform a shift of paradigm towards a new way of strategic thinking serving as the basis for a strategy process in dynamic markets. The combination of these three perspectives has been termed the complexity theory of strategy by Davis and Eisenhardt. This theory combines Austrian economic thinking, the dynamic capabilities view, and complexity theory.^[14] Austrian economics perceive markets as a rapid flow of heterogeneous and surprising opportunities that need to be captured by strategic managers.^[15] The dynamic capabilities perspective perceives organizational resources as simple capabilities that enable quick, flexible, and creative improvisation to respond effectively to this rapid flow of opportunities.^[16] Complexity theory perceives organizations and the economy as simple systems, which produce complex and adaptive responses to environmental change.^[17] The complexity theory of strategy, in general, focuses on “[…] simple rules in guiding improvisational actions in the effective execution of a series of often fleeting opportunities.”^[18] The three particular theories contribute to strategic management thinking to overcome the shortcomings of traditional strategic management thinking in dynamic markets.

Several authors have begun to discuss the implications these environmental transformations have for the strategy process. Mintzberg, Raisinghani and Théorêt, for example, have studied unstructured decision processes in organizations. Thereby, unstructured refers to decision processes that have not been encountered in the same form before and to which no predetermined set of responses exists.^[19] Noda and Bower have conceptualized strategy formation as iterated processes of resource allocation determined by four sub-processes.^[20] Burgelman has developed an evolutionary theory construction in which an organization is conceptualized as ecology of strategic initiatives. Analogously to the three steps of the classical Darwinian evolutionary theory ‘variation, selection, retention’, he names variation-supporting and -limiting mechanisms allowing for some strategic initiatives to emerge, consolidate and subsequently to be replaced by an alternative strategic initiative.^[21] In a study on innovation processes Quinn develops a process pattern framework that he calls logical incrementalism, which also follows the emergent approach.^[22] These theories already resemble the argumentation followed by the complexity theory of strategy. However, to date hardly any theoretical or empirical work exists analyzing the strategy process in dynamic markets from the perspective of the complexity theory of strategy.

The purpose of this paper is to create a strategy process from the perspective of the complexity theory of strategy which meets the requirements of dynamic markets. How do the three underlying theoretical approaches from this theory contribute to form a strategy process for dynamic markets? In order to answer this question, elements from the three theories will be analyzed and assembled in a new framework for creating strategy which is more adequate in dynamic markets than classical process models.

The major result of this paper is that there cannot be a process model of sequenced steps for creating strategy because it would be too rigid to consider critical features for creating strategy in dynamic markets. Rather, the result is a loose framework for creating strategy in dynamic markets that is formed out of elements from the complexity theory of strategy. This framework is embedded in the Viable Systems Model, a complexity theory approach for optimal organizational structure in dynamic markets so that it is neither so rigid as to predefine the strategy content nor so chaotic that strategic management falls apart. The framework does not rely on a single strategic process sequence nor is it completely reactive. Rather than ignoring change it helps creating a relentless pace of change and, thus, may be able to meet the requirements of dynamic markets.

A primary contribution of the paper is to extend the emerging strategic paradigm of the complexity theory of strategy from a mere content dimension to a process dimension of strategy. This is a fundamentally new perspective which has not been taken by any researcher either theoretically or empirically so far due to the recent appearance of the paradigm. This new conceptualization of a strategy process contrasts heavily with traditional perceptions of the strategy process which are mainly influenced by positioning or resource allocation strategic paradigms. While traditional process models may work accurately in slow-moving and predictable environments, they are not well suited to providing organizations with useful strategies in the highly competitive, high-velocity industries in which many contemporary firms compete. This is where this paper contributes to strategy theory by providing a more useful framework for creating strategy in dynamic markets.

1.2 Outline and structure of the paper

As implied by the research question of this paper, two areas where change is prevalent need to be combined. These are on the one hand the environment as dynamic markets symbolizing a flow of opportunities for organizations and strategy on the other hand providing the rules for capturing these opportunities. This thesis comprises three major parts. The first will consider strategy and the changes in thinking that are currently occurring. The second part will focus on the dynamism of markets as the environment for strategy making. Finally, the third part of this work attempts to combine these two perspectives to form a strategy process; first, in static markets with traditional strategy thinking and, second, in dynamic markets with innovative strategy thinking.

Subsequent to this introduction the second chapter will focus on three strategic paradigms. Thereby, two traditional approaches to strategy – namely strategic positioning and the resource-based view – and one revolutionary approach, the complexity theory of strategy, will be presented. This short overview of strategic positioning and the resource-based view is given for two reasons. They are contrasted with the new approach to strategy to highlight the path-breaking conception of the latter and the limited focus of the two traditional views and they serve as the underlying principles for traditional strategy process models described in the fourth chapter. The complexity theory of strategy is first illustrated by some general characteristics and then by its three underlying theoretical concepts – Austrian economics, dynamic capabilities, and complexity theory. Their relevance is grounded in the fact that they will serve as a basis for deducting contributions to the strategy process in dynamic markets in the fifth chapter. Taking the perspective of the environment the third chapter will highlight the characteristics of dynamic markets and explain why it is extremely relevant to consider market dynamism next to or even instead of relying on static markets in today’s economic environment. Combining the strategic and the environmental perspective the fourth chapter displays a strategy process model building upon the assumptions of traditional strategic thinking developed in static market conditions. This is valuable in regard of a subsequent discussion of criticisms concerning such a traditional process model and the deficiencies it shows in dynamic markets. The fact that such significant shortcomings exist justifies the quest for a new strategy process meeting the requirements of dynamic markets being elaborated in chapters five and six. Here, the altered perception in strategic thinking, the complexity theory of strategy, acts as a guiding principle to form this innovative framework. Thereby, chapter five highlights the main contributions from Austrian economics, dynamic capabilities, and complexity theory to strategy creation. These contributions raise the need for a framework for creating strategy that cannot take place within a simple process model. Therefore, the Viable Systems Model will be taken as a framework for organizational structure in which effective strategy creation can take place. The first part of chapter six will explain the organizational setting for strategy creation with an organization as a viable system with its particular subsystems. The second part of this chapter discusses the content of the new framework according to the tasks of the subsystems of a viable system integrating the contributions from the three theories elaborated in chapter five. Subsequently, the framework will be checked for its validity with respect to the requirements of dynamic market defined in the third chapter. Finally, in a conclusive remark the findings will be resumed, their validity checked with regard to the aspirations set in the introduction, and implications for research and practice will be deducted.

2 Strategic paradigms

There are two strategic paradigms that have been dominating strategic thinking over the past decades.^[23] These are strategic positioning (SP) on the one hand and the resource-based view (RBV) on the other hand. Being confronted with increased market dynamism the resource-based view has been further developed by Davis and Eisenhardt towards a new strategic paradigm – the complexity theory of strategy.^[24] These three paradigms are theoretical frameworks for understanding how performance differences between firms arise and how they might be sustained over time.^[25]

2.1 Traditional approaches to strategy

Traditional approaches to strategy focus on analysis, reason, and periods of stability. They presume that a combination of analysis, experience, and insight can lead to reliable predictions regarding the future. Reductionism – reducing the complex whole to its constituent parts – is taken as a means to understand any organization, industry, or market.^[26] Two prominent traditional approaches to strategy are SP and the RBV. SP explains firm performance through industry-specific factors^[27], whereas the RBV contends that one organization is performing better than another with the help of firm-specific factors^[28]. Both they provide underlying logics for the strategy process which will be explained in chapter three.

2.1.1 Strategic positioning

Michael Porter made the point that, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”^[29] By the beginning of the 1980s, a research group around Porter tried to explain superior firm performance with the help of strategic positioning. They suggested organizations to strive for a unique fit with their environment relying on an external environmental analysis of the existing opportunities and threats for an organization. This view is mainly concerned with choosing industries and markets, and positioning within them in order to gain a sustainable competitive advantage. Environmental conditions that favor high levels of firm performance are recommended. Porter’s “Five Forces Model”, for example, describes the attributes of an attractive industry in terms of five dimensions – entry barriers, threat of substitutes, competitive rivalry, and bargaining power of buyers and suppliers. It argues that companies in industries where these five dimensions are favorable have a higher performance than companies in markets with less favorable conditions. Thus, firms should analyze their competitive environment, choose their strategies, and then acquire the resources needed to implement their strategies. Firms are assumed to have the same resources to implement these strategies or to have the same access to these resources. The approach can be used to help an organization find a position within an industry from which it can best defend itself against competitive forces or influence them in its favor.^[30]

This approach to explaining firm performance has been playing an important part in literature on strategic research to date because strategic positioning has in most cases been very critical for organizations to date.^[31] Yet, implicitly, this work has adopted three simplifying assumptions. First, these environmental models assume that firms within an industry are identical in terms of their strategically relevant resources and strategies.^[32] Second, these models assume that if any resource heterogeneity develops in an industry it will be very short lived as resources are highly mobile. Third, environmental conditions are assumed to remain stable over time.^[33] According to a study by Conner the perspective on the industry structure only accounts for twenty percent of performance variance.^[34] Rumelt, Schendel and Teece suggest that it even only accounts for five percent.^[35] Consequently, there must be various other factors explaining firm performance and the development of the resource-based view of the firm – an internal perspective rather than external – attempts to explain another share of it.

2.1.2 The resource-based view

Rumelt stressed the importance of firm-specific factors and the relative unimportance of industry effects on firm performance when he discovered that intra-industry differences in profits were greater than inter-industry differences.^[36] This is why another approach to explaining this phenomenon was developed – the resource-based view of the firm. In fact, the RBV centers on explaining superior firm performance by leveraging resources effectively to build a sustainable competitive advantage.^[37] By resources all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. are understood that are controlled by a firm and enable it to implement strategies that improve its efficiency and effectiveness.^[38] It is supposed that in order to profit from these resources in a way that other firms cannot they must be valuable, rare, inimitable and non-substitutable^[39] enabling superior performance through a strategic fit both in current markets and – via leverage – into new ones.^[40] Every organization has actual and potential strengths and weaknesses in terms of the resources it controls. It is important to try to determine what they are and to distinguish one from the other. Thus what a firm can do is not just a function of the opportunities it confronts; it also depends on how the organization is capable of seizing and executing them.^[41] Thereby, a firm is said to have a competitive advantage when it is implementing a value creating strategy that is not simultaneously being implemented by any other organization and when other firms are unable to duplicate the benefits of this strategy.^[42]

The RBV substitutes the assumptions of the environmental perspective by two alternate assumptions. First, it assumes that firms within an industry may be heterogeneous with respect to the strategic resources they control. Second, it assumes that these resources may not be perfectly mobile across firms, and thus heterogeneity can be enduring. The RBV examines the implications of these two assumptions for the analysis of sources for sustained competitive advantage.^[43] Yet, companies can accumulate a large stock of valuable assets and resources and still not have many useful capabilities. This is due to the fact that the RBV also suffers from two deficiencies. First, it assumes a static equilibrium without addressing the requirements for continued success in a volatile and dynamic environment.^[44] Second, it focuses only on the difficulties and barriers in competing firms imitating, substituting or taking away resources rather than on the complementarities or co-specialization of resources.^[45] Thus, it can be derived that the RBV cannot – concomitantly to SP – entirely explain superior firm performance.

Despite the value of these two approaches they might be less applicable in highly dynamic environments^[46], where organizations with significant resources and/or sustainable competitive positions may loose compared to more dynamic competitors.^[47] SP seems limited in markets where the industry structure is shifting, ambiguous, and unpredictable because valuable market positions may not exist or are difficult to recognize.^[48] In contrast, leveraging resource combinations may be limited in markets where the existence and value of resources is uncertain because it is difficult to predict which resource combinations will be valuable, rare, inimitable, and non-substitutable and for how long.^[49] It can be deducted that there must still be other factors determining superior firm performance.

2.2 Complexity theory of strategy

As an answer to the limited scope of SP and the RBV in explaining firm performance a third approach to strategy is emerging to address the requirements of dynamic markets. Davis and Eisenhardt have developed a new strategic paradigm, which they term the complexity theory of strategy. It is rooted in three main literature streams – Austrian economics, dynamic capabilities, and complexity theory. Collectively, they form the basis for the emerging new paradigm. Synthesizing, the authors recommend using simple capabilities that enable quick, flexible, and creative improvisation to execute attractive but perishable market opportunities instead of relying on fleeting industry positions and resources.^[50]

2.2.1 Austrian economics

Austrian economics perceives markets as a rapid flow of heterogeneous and surprising opportunities.^[51] They are highly dynamic and perceived as a process of exchange in constant economic disequilibrium as a consequence of continuously active participants.^[52] This contrasts with traditional neoclassical assumptions of market equilibriums.^[53] Schumpeter as a prominent representative of the Austrian school noted that market disequilibria originate from a process of ‘creative destruction’ whereby current technologies are replaced by new ones. New technologies in place change the structure of markets for other actors so that such markets can be termed dynamic.^[54] According to the Austrian view this market dynamism results in a constant flow of diverse, surprising, and often attractive opportunities that need to be discovered and executed by entrepreneurs in order to profit from them.^[55] In highly dynamic markets, this flow of opportunities becomes more diverse, rapid, ambiguous, and unpredictable. Therefore, opportunity execution is often difficult.^[56] In addition, due to the vast amount of opportunities passing by, managers often need to neglect promising opportunities because of limited time and resources. By which means this flow of opportunities can be used effectively for strategy creation will be highlighted in chapter five.

In a nutshell, from the Austrian economics perspective, the strategic challenge for managers of firms in highly dynamic markets is to respond quickly, flexibly, and effectively to the changing flow of environmental opportunities in order to gain superior performance from effectively exploiting the best opportunities.

2.2.2 Dynamic capabilities

Whereas Austrian economics reflects on the origin and characteristics of highly dynamic markets and their strategic challenge for managers, research on dynamic capabilities provides reflections on the nature of effective strategy in such markets and on using simple organizational capabilities that enable organizations to respond effectively to the flow of opportunities described by Austrian economics.^[57] Dynamic capabilities are a “[…] firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments.”^[58] The central argument of the dynamic capabilities perspective is that, in constantly changing environments, effective strategy is about using dynamic capabilities as a sort of routines to reconfigure resources in response to environmental change and to generate superior firm performance.^[59] Thereby, new and innovative forms of firm performance are achieved through an organization’s positions, processes and path dependencies by which managers leverage resources.^[60] The effective embodiment of these three dimensions in terms of the strategy process will be discussed in chapter five.

Yet, with increasing market dynamics the nature of effective dynamic capabilities as routines for manipulating resources in relatively predictable environments seems to convert to simple rules for capturing passing opportunities in highly dynamic environments.^[61] Routines are predictable and repeatable behaviors relying on the complex details of past behavior likely to be effective again.^[62] Simple rules, in contrast, are less structured capabilities giving improvisational action only a loose structure. This is especially effective in highly dynamic markets where details of past behavior are less relevant to current problems.^[63] High performance emerges from the accumulation of many temporary advantages that are created as simple rules and used to execute opportunities.^[64] Thus, simple rules are an essential component of profitability and growth in highly dynamic markets. Yet while dynamic capabilities enable high performance, merely possessing dynamic capabilities is not sufficient to ensure competitive advantage.^[65] Rather, the essence of competitive advantage in highly dynamic markets is in “[…] using dynamic capabilities sooner, more astutely, or more fortuitously than the competition.”^[66]

Summarized, dynamic capabilities research is about using simple rules as form of less structured capabilities considering an organization’s positions, processes, and path dependencies for effectively using resources while adapting to rapidly changing environments.

2.2.3 Complexity theory

Complexity theory, the third literature stream influencing the complexity theory of strategy, focuses on the role of simple structures in producing complex and adaptive responses to environmental change.^[67] Most important for this work is one central argument of complexity theory that systems composed of a few simple structures allow complex and adaptive behavior witnessed in a variety of biological, chemical, physical, computational, and social systems.^[68] These simple structures provide simple rules for the members of a system and a balance of order and disorder.^[69] Systems balancing order and disorder are adaptive and flexible and not too rigid in their response to change.^[70] As Kauffman states, systems exhibiting these behaviors, “[…] appear to be best able to coordinate complex, flexible behavior and […] to respond to changes in their environment.”^[71] If the repertoire of rules in such a system is fixed, the result is a complex system . If the rules are evolving, the result is a complex adaptive system (CAS).^[72] Such systems are often composed of multiple unique, related, and partially connected members whose responses to the environment are guided by simple rules.^[73] In order to cope with complexity it is useful to view organizations as viable systems. The Viable Systems Model (VSM) has been introduced by Stafford Beer, the founder of management cybernetics – a science of effective organization. He has shown that all systems are organized basically in the same way and that all systems must be in balance with their particular environment. As the environment changes, an organization must respond through adaptation.^[74]

[...]

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^[1] Cited according to Eisenhardt (2001).

^[2] Cited according to Brown / Eisenhardt (1998), p. 1.

^[3] Cp. Leibold / Probst / Gibbert (2002), p. 19.

^[4] Cp. Ilinitch / D’Aveni / Lewin (1996), p. 217.

^[5] Cp. Andrews (1971).

^[6] Cp. Leibold / Probst / Gibbert (2002), p. 13.

^[7] Cp. D’Aveni (1994), pp. 254f.

^[8] Cp. Eisenhardt (2002), p. 88.

^[9] Cp. Brown / Eisenhardt (1997), pp. 1f.

^[10] Cp. Eisenhardt (2002), pp. 88f.; Leibold / Probst / Gibbert (2002), p. 18.

^[11] Ilinitch / D’Aveni / Lewin (1996), p. 217.

^[12] Cp. Leibold / Probst / Gibbert (2002), pp. 77f.

^[13] Cp. Eisenhardt (2002), p. 88; Voelpel / Leibold / Tekie (2003), p. 32.

^[14] Cp. Davis / Eisenhardt (2004), pp. 3f.

^[15] Cp. Kirzner (1997), pp. 60f.; Shane (2000), p. 448.

^[16] Cp. Eisenhardt / Sull (2001), p. 108; Brown / Eisenhardt (1997), pp. 1f.; Rindova / Kotha (2001), p. 1274.

^[17] Cp. Kauffman (1993); Langton (1992); Reynolds (1987); Gharajedaghi (1999).

^[18] Davis / Eisenhardt (2004), p. 3.

^[19] Cp. Mintzberg / Raisinghani / Théorêt (1976), p. 246.

^[20] Cp. Noda / Bower (1996), pp. 160f.

^[21] Cp. Burgelman (1991), p. 240.

^[22] Cp. Quinn (1980); Quinn (1995).

^[23] Cp. Davis / Eisenhardt (2004), p. 2; Teece / Pisano / Shuen (1997), p. 510; Grant (1991), p. 114; Eisenhardt / Sull (2001), p. 109.

^[24] Cp. Davis / Eisenhardt (2004), p. 2.

^[25] Cp. Porter (1996), p. 64; Barney (1991), p. 102; Davis / Eisenhardt (2004), p. 2.

^[26] Cp. Davenport / Leibold / Voelpel, p. 68.

^[27] Cp. Barney (1991), pp. 99f.; Beer / Voelpel / Leibold (2003), p. 9.

^[28] Cp. Jacobson (1988), pp. 417f.; Hansen / Wernerfelt (1989), p. 399f.; Barney (1991), p. 102.

^[29] Porter (1996), p. 64.

^[30] Cp. Porter (1980).

^[31] Cp. Beinhocker (1997), p. 24; Barney (1991), p. 99; Eisenhardt / Sull (2001), p. 109.

^[32] Cp. Porter (1981), p. 613; Rumelt (1984), p. 567.

^[33] Cp. Barney (1986), pp. 1233f.

^[34] Cp. Connor (1991), p. 144.

^[35] Cp. Rumelt / Schendel / Teece (1994), p. 203.

^[36] Cp. Rumelt (1991).

^[37] Cp. Barney (1991); Grant (1991).

^[38] Cp. Barney (1991), p. 101.

^[39] Cp. Amit / Shoemaker (1993), p. 37; Barney (1991), pp. 105f.; Peteraf (1993), p. 186.

^[40] Cp. Amit / Shoemaker (1993), p. 39.

^[41] Cp. Teece / Pisano / Shuen (1997), p. 509.

^[42] Cp. Barney (1991), p. 102.

^[43] Cp. Rumelt (1984), p. 567.

^[44] Cp. Teece / Pisano / Shuen (1997), pp. 513f.

^[45] Cp. Amit / Shoemaker (1993), p. 39; Mueller (1996), p. 770; Powell (1995), p. 33.

^[46] Cp. Eisenhardt / Martin (2000), p. 1106; Eisenhardt / Brown (1999), p. 74.

^[47] Cp. Rindova / Kotha (2001), p. 1263; Siggelkow (2001), p. 855; Hill / Rothaermel (2003), p. 257.

^[48] Cp. D’Aveni (1994), pp. 269f.

^[49] Cp. Eisenhardt / Bingham (2001), p. 4.

^[50] Cp. Davis / Eisenhardt (2004).

^[51] Cp. Kirzner (1997), p. 65; Shane (2000), p. 448.

^[52] Cp. Hayek (1948); Jacobson (1992); Mises (1949).

^[53] Cp. Arrow / Debreu (1954).

^[54] Cp. Schumpeter (1942).

^[55] Cp. Hayek (1948).

^[56] Cp. Rindova / Kotha (2001), p. 1273.

^[57] Cp. Eisenhardt / Martin (2000), p. 1111.

^[58] Teece / Pisano / Shuen (1997), 516.

^[59] Cp. Miller / Shamsie (1996), pp. 538f.; Teece / Pisano / Shuen (1997), p. 515f.

^[60] Cp. Teece / Pisano / Shuen (1997), p. 515.

^[61] Cp. Eisenhardt / Martin (2000), p. 1111.

^[62] Cp. Szulanski (1996), p. 29; Zollo / Winter (1999), p. 12.

^[63] Cp. Dess / Beard (1984), p. 56; Weick (1998), p. 551.

^[64] Cp. Rindova / Kotha (2001), p. 1274; Roberts (1999), p. 666.

^[65] Cp. Roberts (1999), p. 656; Zott (2003), p. 100.

^[66] Eisenhardt / Martin (2000), p. 1117.

^[67] Cp. Anderson (1999); Gell-Mann (1994); Kauffman (1993); Axelrod / Cohen (1998).

^[68] Cp. Kauffman (1989); Langton (1992); Prigogine / Stengers (1984); Reynolds (1987). By the term complex it is referred to the complex behavior these systems produce, and not to complex environments or strategies.

^[69] Cp. Eisenhardt / Sull (2001), p. 110.

^[70] Cp. Gell-Mann (1994), pp. 52f.

^[71] Kauffman (1993), p. 29.

^[72] Cp. Beinhocker (1997), p. 29.

^[73] Cp. Gell-Mann (1994), pp. 52f.

^[74] Cp. Beer (2004), p. 1-17.