How to overcome path dependency through resource reconfiguration

Goumagias, Nikolaos, Fernandes, Kiran Jude, Nucciarelli, Alberto and Li, Feng (2022) How to overcome path dependency through resource reconfiguration. Journal of Business Research, 145. pp. 78-91. ISSN 0148-2963

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Abstract

Firms often reconfigure their resources responding to changes of their external or internal environment, often incorporating new knowledge and resources in collaboration with external stakeholders. However, the reconfiguration process is challenging, costly, and often fails. The firm’s history plays an important role in the resource reconfiguration process being path dependent. Path dependency, arguably, leads to lock-in effects that prevents reconfiguration. However, we argue this is a very limited viewpoint. In this paper, drawing empirical evidence from the digital games industry, we argue that path dependency bounds the reconfiguration action space and can potentially improve strategic planning identifying paths of least resistance. Depending on the extend of the reconfiguration we identify two alternatives: direct reconfiguration (horizontal reconfiguration) or increasing the complexity by incorporating additional configurations (vertical reconfiguration).

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