Firm Resource Utilization and Enhancement Process: (Mis)Perception and Firm Performance

Abstract

This study expands the usefulness of economic theories of competition by amplifying the role of managerial perception in strategic decision making. In particular, decisions about resource use and enhancement are identified as being significantly influenced by managerial perception. Results of the conceptual analysis characterize resource misperception as leading to resource underleverage and overleverage. When resource underleverage occurs, competitive opportunities will be missed and resources will be targeted for enhancement or avoidance. When overleverage occurs, competitive hazards will be realized and resources will be targeted for maintenance. To observers these firm behaviors and outcomes do not follow a purely economic rationale.