Gianluigi Giustiziero - SKEMA BUSINESS SCHOOL - GREDEG - Keywords: Resource Turnover, Organizational Adaptation, Employee Mobility, Technological Clusters

Gianluigi Giustiziero - SKEMA BUSINESS SCHOOL - GREDEG - Keywords: Resource Turnover, Organizational Adaptation, Employee Mobility, Technological Clusters

Contribution title: When Losing a Valuable Resource Enhances Performance: Resource Turnover on Rugged Landscapes

In this study, we combine insights from the resource-based view (RBV) and organizational adaptation literature to examine under what conditions resource turnover is costly or beneficial to organizations. We employ a standard NK model in which firms develop, adapt, and exchange resources. We demonstrate that for different levels resource complexity and resource interdependence, firms may benefit or suffer from resource turnover. We show that there are conditions under which industry leaders may benefit from losing resources to their followers and conditions under which both industry leaders and followers benefit from turnover, creating win-win situations with strong incentives to encourage resource mobility across firms. Our results have important implications for both the RBV and the organizational adaptation literature. As for the RBV, we demonstrate that in settings where local search is important losing a valuable resource does not necessarily give away a firm’s competitive advantage. As for the organizational adaptation literature, we contribute by exploring the implications of resource complementarities and complexity on how resource turnover affects performance. More broadly, our study also contributes to the literature on resource mobility, potentially explaining why firms often have an ambivalent approach to resource turnover and losses. At times, firms are wary of losing their superior resources to a competitor. Some other times, they openly embrace resource exchanges with other firms in the same industry, as in the case of employee mobility in Silicon Valley.