On strategic trade-offs: does the principle of energy conservation explain the trade-offs law?. Issue 11 (20th November 2017)

• Record Type: Journal Article
• Authors: Thürer, Matthias; Stevenson, Mark; Sarmiento, Roberto; Gianiodis, Peter
• Is Part Of: Management research review. Volume 40:Issue 11(2017)
• Page Start: 1163
• Page End: 1174
• Publication Date: 2017-11-20
• Subjects: Cumulative capabilities -- External trade-offs -- Internal trade-offs -- Law of energy conservation -- Performance frontiers -- Strategic trade-offs; Management -- Periodicals; Management -- Research -- Periodicals; 658.4
• DOI: 10.1108/MRR-09-2016-0214
• Languages: English
• ISSNs: 2040-8269

Abstract

Abstract : Purpose: The purpose of this paper is to reaffirm the suggestion that there are at least two distinct types of laws of trade-off that affect all firms and, in doing so, to contribute toward resolving the persistent trade-off debate in the literature. Design/methodology/approach: Conceptual study using implicit deductive reasoning. Findings: Two types of trade-offs are identified: "internal" can be understood following the dictates of the law of diminishing returns, while "external" can be modeled using the principle of energy conservation. Research limitations/implications: New insights are provided by discussing the impact of both laws of trade-off on the resource-based view of the firm, on new capabilities such as sustainability and innovativeness and on key strategic choices. Practical implications: The study explains why trade-offs occur and outlines contextual factors that determine the "strength" of the trade-offs. Originality/value: To the best of the authors' knowledge, no previous study has attempted to investigate the topic of strategic trade-offs on the basis of the principle of energy conservation.