Value Creation through Novel Resource Configurations in a Digitally Enabled World

Xu Han, The College of New Jersey, and Raffi Amit,  Management, The Wharton School

Strategic Entrepreneurship Journal, Volume 11, Issue 3, September 2017

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‐creation‐centric perspective for designing and organizing their resource configurations. Our conceptualization of a firm’s resource configuration decisions centers on organizing access to resources controlled by value co-creators. We discuss resource configuration 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 opportunities 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.

Read the full paper here.