IRMA-International.org: Creator of Knowledge
Information Resources Management Association
Advancing the Concepts & Practices of Information Resources Management in Modern Organizations

Integrating Real Option and Dynamic Capability Theories of Firm Boundaries: The Logic of Early Acquisition in the ICT Industry

Integrating Real Option and Dynamic Capability Theories of Firm Boundaries: The Logic of Early Acquisition in the ICT Industry
View Sample PDF
Author(s): Alfred G. Warener (Penn State Erie, USA) and James F. Fairbank (Penn State Erie, USA)
Copyright: 2008
Pages: 18
Source title: Information Communication Technologies: Concepts, Methodologies, Tools, and Applications
Source Author(s)/Editor(s): Craig Van Slyke (Northern Arizona University, USA)
DOI: 10.4018/978-1-59904-949-6.ch216

Purchase


Abstract

Firms often acquire other firms to source technology but it is unclear why they might assume such risk by buying before a product standard is established in their industry. We draw upon real options and dynamic capability theories of firm organization to develop an integrated framework that explains why firms might acquire early and which firms are more likely to do so. We develop propositions regarding certain firm attributes as predictors of acquisition timing relative to passage of a technology standard. We argue that from a real options perspective, the primary reason firms acquire early is related to the firm’s knowledge of the technology. However, attributes such as political influence in the standardization process, prior experience making acquisitions, and how the firm resolves uncertainty about the technical expertise of potential acquisition targets are capabilities that also enter the acquisition timing decision. We provide a model based on those propositions and address how it can be empirically tested.

Related Content

Adeyinka Tella, Oluwakemi Titilola Olaniyi, Aderinola Ololade Dunmade. © 2021. 24 pages.
Md. Maidul Islam. © 2021. 17 pages.
Peterson Dewah. © 2021. 23 pages.
Lungile Precious Luthuli, Thobekile K. Buthelezi. © 2021. 14 pages.
Delight Promise Udochukwu, Chidimma Oraekwe. © 2021. 13 pages.
Julie Moloi. © 2021. 18 pages.
Mandisa Msomi, Lungile Preciouse Luthuli, Trywell Kalusopa. © 2021. 17 pages.
Body Bottom