Value Creation through Novel Resource Configurations in a Digitally Enabled World

• Published date: 01 September 2017
• Author: Xu Han,Raphael Amit
• DOI: http://doi.org/10.1002/sej.1256
• Date: 01 September 2017

Value Creation through Novel Resource

Configurations in a Digitally Enabled World

Raphael Amit

1

and Xu Han

2

*

1

Management Department, The Wharton School, University of

Pennsylvania, Philadelphia, Pennsylvania

2

Management Department, School of Business, The College of

New Jersey, Ewing, New Jersey

Research summary: We propose a conceptual framework for examining the value-

creation potential embedded into novel, digitally powered resource configurations. We

suggest that business digitization calls for firms to adopt a system-based, value-crea-

tion-centric perspective for designing and organizing their resource configurations.

Our conceptualization of a firm’s resource configuration decisions centers on organiz-

ing access to resources controlled by value cocreators. We discuss resource configura-

tion prototypes, value-creation sources, and the underlying resource configuration

processes enabled by digitization. Our study contributes to the literature on strategic

entrepreneurship by incorporating the ramifications of digitization into the theory on

firms’resource configuration and its underlying processes to enable strategic

entrepreneurship.

Managerial summary: Digitization has profoundly reshaped the way business oppor-

tunities are discovered and exploited. In this article, we suggest that digitization

expands the scope of resources firm could utilize while requiring firms to take a holistic

approach in considering the resources and addressing the needs of all customers and

partners (e.g., resource providers). We highlight the importance of such a holistic

approach to enhancing the value creation potential in the digital age for entrepreneurs

and managers. In addition, we propose novel ways to connect resources with needs of

customers and partners (e.g., enabling transactions and providing bridges) as well as

the actionable microprocesses that undergird and enable these novel connections in a

digitally enabled world. Copyright © 2017 Strategic Management Society.

The resource configuration of a firm depicts the ways

in which it orchestrates and connects the resources it

utilizes (Sirmon, Hitt, & Ireland, 2007; Sirmon, Hitt,

Ireland, & Gilbert, 2011). The rapidly increasing

trend of digitizing companies has reshaped the ways

in which firms do business (Weill & Woerner, 2013)

and is fostering strategic entrepreneurship by

enabling entrepreneurs and managers alike to create

novel configurations of resources and, thereby,

enhance their value(Hitt, Ireland, Sirmon, & Trahms,

2011). The substantial advances in computing and

communication technologies have expanded firms’

reach to resources and enhanced the effectiveness at

which resources are exchanged, combined, and inte-

grated. These developments have laid the founda-

tions for the rise of the “born-on-the-cloud”

innovators (e.g., Uber, Airbnb) and the sharing econ-

omy. Also, the power of individual customers has

been elevated as a resul t of the proliferatio n of prod-

uct and service information from digitally enabled

platforms (e.g., Groupon) and social interaction

(e.g., Facebook, Twitter), which allow exhaustive

Keywords: value creation; resource configuration; digitization;

strategic entrepreneurship; organizational design

*Correspondenceto: Xu Han, Management, School of Business

Building, Room 114, The College of New Jersey, 2000

Pennington Rd, Ewing Township, NJ 08628. E-mail: hanx@

tcnj.edu

Copyright © 2017 Strategic Management Society

Strategic Entrepreneurship Journal

Strat. Entrepreneurship J., 11: 228–242 (2017)

Published online 14 August 2017 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej.1256