IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Diversification And Focus: A Bayesian Application Of The Resource-Based View

Listed author(s):
  • Lee T. Perry
  • Mark H. Hansen
  • C. Shane Reese
  • Greggory Pesci
Registered author(s):

    We propose a new application of the resource-based view (RBV) that is more consistent with Penrose’s (1959) original framework. We use that framework to study the relationship between diversification and refocusing strategies and economic performance. We propose that the RBV may be enhanced by the explicit recognition of Penrose’s two classes of resources, administrative and productive resources. This distinction suggests a focus on the administrative decisions of managers, including the multiple decisions associated with diversification and refocusing strategies, which lead to economic performance. Second, we argue that RBV theory is a theory about extraordinary performers or outliers, not averages. Therefore, the statistical methods used in applying the theory should account for the difference between individual firms, rather than relying on means across firms, which statistically neutralize firm differences. We introduce a novel Bayesian Hierarchical method to examine actions taken by new CEOs and the resulting effects on economic performance over time. The unique feature of this Bayesian method is it allows us to make meaningful probability statements about the diversification and refocusing strategies of individual firms.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by LMU Munich School of Management in its journal Schmalenbach Business Review.

    Volume (Year): 57 (2005)
    Issue (Month): 4 (October)
    Pages: 304-319

    in new window

    Handle: RePEc:sbr:abstra:v:57:y:2005:i:4:304-319
    Contact details of provider: Postal:
    Geschwister-Scholl-Platz 1, 80539 Muenchen

    Phone: 0049 89 2180 2166
    Fax: 0049 89 2180 6327
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:sbr:abstra:v:57:y:2005:i:4:304-319. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (sbr)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.