Abstract for: Strategic Resource Management under Causal Ambiguity - An Empirical Study of Resource Management Dynamics

The Resource-based view (RBV) of a firm is a stream in the field of strategic management. System Dynamics scholars have made a number of contributions towards the field by seeing a firm as a resource system rather than a bundle of resources. This perspective, known as the Dynamic RBV, emphasizes on the importance of managing the firm’s resource system. This paper follows the Dynamic RBV perspective and examines the resource management process under causal ambiguity; the study hypothesizes that systemic understanding towards the resource system helps the management behavior. Then, the paper empirically tests the hypotheses via a behavioral experiment design. Two controlled groups, each with a different understanding of the resource system, are compared. Using a management flight simulator, People Express 2000, 60 participants engaged in a resource management process of a low-cost airline. The study shows that employing system’s perspective towards the resource system supports managers to effectively manage their resource system and also improves performance.