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Asset Recombination as a Driver of Sustainable Competitive Advantage: An Extension and Taxonomy

To maintain competitiveness in a rapidly changing global economy, firms must continuously reconfigure their asset portfolio in tune with multiple environments. We systematically link the dynamic capability thinking to the MNE context, seeking to provide a more refined understanding of asset recombination. By distinguishing between firm-specific assets and advantages, this study also offers clarity to the concepts of sensing and seizing from the dynamic capabilities framework. We introduce recombinant firm-specific assets (FSAR) as an essential subset of dynamic capabilities that are closely related to the periodic asset orchestration and renewal in the dynamic capabilities framework. Asset recombination is the key to sustainable competitive advantage, and we distinguish between three different types of asset recombination, intra-firm, extra-firm and network recombination, depending on the source of complementary assets. This taxonomy and the associated types of FSAR provide a better understanding of the mechanisms that MNEs can utilize to effectively bundle and recombine their assets and thus create and capture value over time in cross-border settings.

Asset recombination as a driver of sustainable competitive advantage: An extension and taxonomy

Keywords
Dynamic capabilities, Recombinant firm-specific assets, Asset recombination, Intra-firm recombination, Extra-firm recombination, Network recombination

Published on 16th May 2018
Authors Professor Rajneesh Narula
Series Reference JHD-2018-01