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Research seminar with Professor Tobias Kretschmer
May 31, 2013 @ 12:00 pm - 1:15 pm
Professor Tobias Kretschmer is Head of the Institute for Strategy, Technology and Organization, Munich School of Management at Ludwig-Maximilians-Universität München. His research interest are complex technologies, complex organizations, and their interaction as well as competitive strategy and industrial organization of high-technology industries.
“Firm Resources and Managerial Risk Taking”
We address the mixed empirical evidence on the relationship between firm resources and managerial risk taking and argue that the availability and strategic mobility of firm resources influence how managers perceive risks and learn from performance feedback. Using an unbalanced panel of 67 video game publishers over an average period of 8 years we find that specific resources lower risk taking by biasing risk perception toward the potential gains from existing alternatives, while flexible resources shift managerial attention to the pursuit of new alternatives. Further, flexible resources shield slow learning processes from short-term environmental and organizational pressures. Hence, larger stocks of flexible resources make managerial risk taking less sensitive to performance feedback.