Calmness instead of panicking: re-thinking the resource allocation strategies in an era of uncertainty: a case of a developing country

Abstract

Purpose

Drawing on the concept of superior resource, capability and processes of the resource-based theory of the firm, the purpose of the current study is to analyze the influence of firms’ winner-picking strategic approach on firm performance (FP) via a direct and indirect mechanism.

Design/methodology/approach

Using survey data of 104 diversified manufacturing firms, the current study analyzed the conditional indirect effect of firms’ strategic approach on efficient resource allocation with the help of Statistical Analysis Software (SAS) process macros.

Findings

The study found that firms’ choices of winner-picking approach can undermine the resource allocation efficiency when not perfectly blended with firms’ access to the resource. Furthermore, the effect of winner-picking strategy (WPS) on resource allocation efficiency via firms’ competitive advantage (CA) can be greater when both strategic choice and resources are employed adequately.

Research limitations/implications

Despite making a unique contribution, the present study has a few limitations requiring researchers’ attention to be tackled in the forthcoming. This includes a little amount of data, a self-reporting technique and failure to include all the possible reasons that could lead to inefficient resource allocation.

Practical implications

The present research has potential applications for managers of the manufacturing industry in a period of sheer uncertainty [coronavirus disease 2019 (COVID-19)]. First, the study alerts managers about the challenges of underinvestment and overinvestment while allocating resources. At the same time, this study provides an important implication for managing the importance of firms’ access to capital (AC).

Originality/value

The current study has made a sizeable impression in the literature on internal resource allocation and resource-based theory of the firm by recommending a model that augments the theoretical foundation of strategic management of the firms. As there are only a handful of studies on this grave issue in the context of developing economies, thus, closely considering these insights would be helping for the firms for allocating resources efficiently in the manufacturing industry.

Citation

Blouch, R. and Khan, M.M. (2024), "Calmness instead of panicking: re-thinking the resource allocation strategies in an era of uncertainty: a case of a developing country", Asia-Pacific Journal of Business Administration, Vol. 16 No. 3, pp. 677-695. https://doi.org/10.1108/APJBA-04-2022-0183