Innovations and the Role of Complementarities in a Strategic Theory of the Firm

Strategic Management Journal, Vol. 28, pp. 1-15, 2007

Posted: 26 Jun 2007

See all articles by Nils Stieglitz

Nils Stieglitz

Frankfurt School of Finance & Management; University of Southern Denmark - Strategic Organization Design Unit (SOD) - Department of Marketing & Management

Klaus Heine

Erasmus University Rotterdam (EUR), Erasmus School of Law

Abstract

In the resource-based view of strategy and in evolutionary economics, complementary assets play a crucial role in explaining sustainable competitive advantages and innovations. Despite the apparent importance of complementary assets for the understanding of corporate strategy, their creation and the associated managerial problems have been much less discussed. We believe this to be a major weakness in the strategic theory of the firm. Interestingly, problems of coordination and cooperation are center stage in the contract-based theories of the firm, and we try to integrate some of their insights into a resource-based perspective. Specifically, we show how complementary assets raise the need for strategic direction by a firm's top management. Moreover, complementary assets magnify internal incentive problems, and their management has an impact on the innovativeness of a firm. Lastly, complementary assets play a crucial role in the internal appropriation of innovative rents. We demonstrate the fruitfulness of our integrated framework by relating some of our findings to the literature on corporate strategy, industry evolution, and organizational structures.

Keywords: coordination, complementary assets, strategic theory of the firm, industry evolution, strategic organization design

JEL Classification: L23, M21

Suggested Citation

Stieglitz, Nils and Heine, Klaus, Innovations and the Role of Complementarities in a Strategic Theory of the Firm. Strategic Management Journal, Vol. 28, pp. 1-15, 2007, Available at SSRN: https://ssrn.com/abstract=996587

Nils Stieglitz (Contact Author)

Frankfurt School of Finance & Management ( email )

Sonnemannstra├če 9-11
Frankfurt am Main, 60314
Germany

University of Southern Denmark - Strategic Organization Design Unit (SOD) - Department of Marketing & Management ( email )

Campusvej 55
DK-5230 Odense M
Denmark

HOME PAGE: http://www.sdu.dk/sod

Klaus Heine

Erasmus University Rotterdam (EUR), Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

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