Strategic Action Repertoires and Performance of Firms in the Internet Industry

Researchers have called for new theoretical frameworks and empirical analyses to understand variations in organizational strategies and management practices in the Internet industry, where existing paradigms may have limited applicability. Studies to date have neither articulated the repertoire of key firm actions in this context nor developed theory to relate firm actions to performance. This paper seeks to identify a key set of firm moves in the Internet industry and develop a theoretical model to relate firm actions to two important firm outcomes: sales performance and firm survival. We draw on the construct of dynamic resourcefulness to the firm level and develop a research model linking the actions of firms in the Internet industry underlying dynamic resourcefulness to firm-level outcomes. We test our hypotheses using the action repertoire-year mode of analysis on the actions of 106 leading firms in the Internet industry over a period of 6 years from 1994 to 1999. Our results suggest that firm actions to manage and direct their intellectual, relational, and financial capital resources are associated with higher levels of performance and survival.