Phys.org: Global uncertainty may force businesses to rely on flexibility rather than efficiency
Originally found at Phys.org by Jon Niccum, University of Kansas
While companies are inherently used to dealing with risk, few are prepared for total unpredictability. That’s the premise of a new article by Minyoung Kim, associate professor of strategy and international business at the University of Kansas.
“Branching and Anchoring: Complementary Asset Configurations in Conditions of Knightian Uncertainty” appears in the Academy of Management Review. It’s part of a special issue on the implications of uncertainty for management and organization theories.
“We highlight how firms may unknowingly direct complementary assets in ways that favor current value appropriation at the expense of future value creation. Their efforts to capture a larger slice of the pie may end up with a smaller pie, negatively impacting firm performance, especially in these times of uncertainty,” Kim said.
The article (co-written with Curba Morris Lampert and Francisco Polidoro Jr.) maintains that previous studies assume relevant assets and asset configurations are generally well-known to an innovating firm. This assumption is applicable under conditions of risk, where decision-makers can know outcomes and probabilities. What is less known is how these insights apply under conditions of Knightian uncertainty.
Continue reading the original article at Phys.org.
Read the original research in Academy of Management Review.
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