Resource origins and search

Research Summary The search for new resources is costly and difficult within the resource‐based view. Because search is costly, a common prescription is for firms to focus on their endowments—the resources they already possess. However, is there a way for firms to somehow find value amongst the “vast reservoirs” of external resources? We review existing forms of resource search and then suggest an alternative. Extending arguments from biology, we develop the idea of a firm‐specific search image and highlight how search images can reveal resources not obvious to others. The search image notion speaks to how firms might uniquely identify dormant resources, even in seemingly efficient factor markets. We conclude with a discussion of how our arguments pertain to the resource‐based view and the origins of resources. Managerial Summary How do managers and entrepreneurs search, identify, and find assets and resources in relentlessly competitive markets? Existing arguments largely suggest that firms should not engage in costly and competitive “external” search—instead they should focus “inside,” leveraging the endowments and resources they already possess. We argue that vast reservoirs of dormant resources are available, and that a particular form of external resource search offers a powerful alternative to the prescription to “look inside.” Specifically, we highlight how a “search image” can enable entrepreneurs and managers to search and see resources and value that is not obvious to others. In particular, the search for a functional need—and solution to a formulated problem—can help firms recognize and find dormant resources and create value.