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Redeployment of corporate resources: A study of acquisition strategies in the US defense industries, 1978-1996

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  • Jaideep Anand

    (Fisher College of Business, Columbus, OH 43210-1144, USA)

Abstract

How are excess resources redeployed when an industry declines? These resources can be redeployed within the firm through diversification and across firms through a market interface. Acquisitions can play an important role in either of these mechanisms. First, acquisitions can provide new complementary resources and facilitate the redeployment of excess resources within the firm through recombination. Second, horizontal acquisitions can facilitate consolidation and disposal of excess or redundant resources that can be redeployed elsewhere through a market interface. I study both these kinds of acquisitions in the US defense industries (1978-1996), and explain the choice between the two acquisition strategies on the basis of the business environment, underlying resources of the firm, and to a lesser extent, as a consequence of agency forces within the firm. I derive implications for strategic transformation of firms, and the resource-based and evolutionary perspectives. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Jaideep Anand, 2004. "Redeployment of corporate resources: A study of acquisition strategies in the US defense industries, 1978-1996," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 383-400.
    • Handle: RePEc:wly:mgtdec:v:25:y:2004:i:6-7:p:383-400
    DOI: 10.1002/mde.1197
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    References listed on IDEAS

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    Cited by:

    1. Jiang, Guoliang F. & Holburn, Guy L.F. & Beamish, Paul W., 2014. "The Impact of Vicarious Experience on Foreign Location Strategy," Journal of International Management, Elsevier, vol. 20(3), pages 345-358.
    2. Arkadiy V. Sakhartov, 2018. "Stock market undervaluation of resource redeployability," Strategic Management Journal, Wiley Blackwell, vol. 39(4), pages 1059-1082, April.
    3. Arkadiy V. Sakhartov & Timothy B. Folta, 2015. "Getting beyond relatedness as a driver of corporate value," Strategic Management Journal, Wiley Blackwell, vol. 36(13), pages 1939-1959, December.
    4. Mehmet Nasih Tağ, 2022. "The Dark Side of Firm Diversity: An Empirical Examination of the Impact of Firm Diversity on Resource Allocation Efficiency in Multidivisional Firms," Istanbul Business Research, Istanbul University Business School, vol. 51(2), pages 643-668, November.
    5. Niron Hashai, 2015. "Within-industry diversification and firm performance—an S-shaped hypothesis," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1378-1400, September.
    6. Jaideep Anand & Raffaele Oriani & Roberto S. Vassolo, 2010. "Alliance Activity as a Dynamic Capability in the Face of a Discontinuous Technological Change," Organization Science, INFORMS, vol. 21(6), pages 1213-1232, December.
    7. Arkadiy V. Sakhartov, 2017. "Economies of Scope, Resource Relatedness, and the Dynamics of Corporate Diversification," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2168-2188, November.

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