Differing paths to organizational performance: strategic implications of resource transformation and capability reinforcement

Globally, organizations have little insight into mechanisms that enable them to leverage their resources and capabilities successfully. In that endeavor, this study demonstrates that organizations can achieve competitive advantages through resource transformation and capability reinforcement. Using a conceptual framework grounded in the resource-based view and the dynamic capabilities theory in combination with Miles and Snow typology, we show how different types of organizations can succeed in the currently evolving competitive landscape by developing mechanisms that match the strategic performance measures of the organizations, such as return on assets or Tobin's Q. Notably, analyzing data obtained from 114 firms with seemingly unrelated regression, the findings reveal central roles of alternating mechanisms that drive differential organizational performance and enable the organizations to successfully deploy resources and capabilities.