A firm that intends to exploit a natural resource opportunity ultimately enters the location of those resources and interacts with the local context. Those locations are often vulnerable to external resource use. A focal firm establishes arrangements with local actors controlling the resources to ensure sustained access to the desired natural resources. Building upon a case study of a firm that regularly enters several locations, this chapter studies the firm’s arrangements with local actors. In particular, the role of localness of natural resources and interdependences between the focal firm and local actors are emphasized. The study unveils that the chosen arrangements vary across different locations and are configurations along social, scope and structural dimensions. This variation in arrangements enables a firm to manage dependence while responding to the local context in order to ensure sustained access to natural resources.
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Karin Andrea Wigger and Marta Bystrowska
Brett Crawford, Siddharth Mehra and Yulong Hu
This chapter explores how shifting rationalities of individuals and organizations reshape the management of natural resources over time. Using an archival and interview-based research design, we examine the major chronological events and shifting rationalities that impacted how a single, valuable river resource was managed throughout the twentieth century. Drawing on a parallel story (The Giving Tree), our examination of California’s McCloud River illustrates (1) how the rationality of actors at various points in time drives their interests in specific natural resources, as well as acceptable ways to manage those resources and (2) that water resources such as rivers, which have long been viewed as replenishing natural resources, can be managed in a way that removes their replenishing nature. We posit that by improving our understanding of natural resource management in the past, the abilities of individuals and organizations to manage nature resources more responsibly in the future will be enhanced.
This exploratory study examines how frontline managers in a natural resource extraction context make sense of natural systems. The goal is to extend ecological sensemaking theory while also expanding organizational theory further into the frontlines of natural resource extraction industries. To do so I examine how particular characteristics of interacting with natural systems influence how frontline managers in commercial trawl fishing in Alaska make sense of those systems. These characteristics are ‘irreversibility’ and ‘indeterminacy.’ ‘Irreversibility’ is the unyielding march of time inherent to organizing processes and ‘indeterminacy’ is an inability to know for certain how organizing processes will play out over time. Ecological sensemaking functions as a conjectural process at the frontline of the Alaskan commercial fishing context. After elaborating these novel characteristics of ecological sensemaking theory, the chapter offers suggestions for next steps in practice and research.
Edited by Gerard George and Simon J.D. Schillebeeckx
The book aims to develop thought leadership on managing natural resources and stimulate the emergence of a community of management scholars that will advance research in this exciting area. We invited scholars from around the world to share conceptual and empirical research in which natural resources take centre stage and present 11 chapters that all contribute in important ways to both management theory and thinking as well as to the natural resource agenda. We explicitly draw the connection between the sustainable development goals of the United Nations and natural resources and explore how the chapters in this book address many of these goals in a way that husbands management theory with real impact.
Gerard George, Simon J.D. Schillebeeckx and Teng Lit Liak
This chapter is a reprint from an editorial in the Academy of Management Journal. The article investigates how resources have been discussed and theorized over the last decades and finds that despite their omnipresence in economics, engineering and policy, managerial thought on natural resources is largely missing. Yet, important questions on how firms deal with scarcity of natural resources, how they are managed in a sustainable way, and how they inspire all kinds of organizational action abound. We discuss organizational, institutional and societal responses to scarcity and present ways to continue research on the ‘Grand Challenge’ of natural resources within the field of management. Finally, we present a conversation with Teng Lit Liak, a businessman, politician and environmental champion in Singapore on his perspectives on the natural environment.
Organizational Strategy, Behaviour and Dynamics
Edited by Gerard George and Simon J.D. Schillebeeckx
Forough Zarea Fazlelahi and J. Henri Burgers
Transaction Cost Economics and the Resource-Based View are two traditional lenses to explain vertical integration decisions. However, these lenses face limitations in considering the persistence of such decisions over time. Drawing on imprinting theory, this chapter provides a theoretical link between the initial natural resource characteristics surrounding a firm’s birth and its choice and persistence of vertical integration. The main argument is that initial natural resource conditions have an imprinting effect on the vertical integration decisions made by firms in the extractive industries. A process through which imprinting happens is explained. We discuss several propositions concerning the kind of influence different initial natural resource characteristics have on firm decisions. Our main contribution is presenting a natural imprinting view that can explain the enduring effect of natural environment characteristics on firms’ ownership structures in the extractive industries.
Bettina Bastian, Ulf Henning Richter and Christopher L. Tucci
The resource-based view of the firm (RBV) has emerged as a dominant perspective in strategic management, aiming to explain how unique firm resources and capabilities lead to sustained competitive advantage. In this book chapter, we apply the RBV to the context of finite natural resources and show that the RBV criteria do not suffice to understand performance differences given political risk resulting from the fixed location of natural resources and auto-consumption that drives natural resource depletion. Using a property rights perspective, we outline factors that enhance the explicatory power of the RBV for the extractive sector. We develop four scenarios that link natural resource endowment, depletion, political risk, firm performance, innovation and diversification.
Roh Pin Lee, Ronny Reinhardt, Florian Keller, Sebastian Gurtner and Lutz Schiffer
Political and industrial decision makers have to promote technological innovations that pave the way for a low-carbon economy while ensuring the security and competitiveness of raw material supplies. In this complex decision-making environment, it is highly challenging to obtain a holistic and well-grounded overview of the wider institutional environment affecting industrial value chains. This chapter illustrates the managerial relevance and implications of a raw materials transition through a case study of the German chemical industry. Utilizing a cradle-to-gate approach, an integrated techno-economic-environmental evaluation of viable carbon resource alternatives for producing organic chemicals is conducted. The results illustrate the complexity and diversity of issues decision makers face. Additionally, qualitative factors are considered to illustrate motivators and risks that could influence decisions about whether to invest in alternative carbon feedstock. Finally, management theories and practices that could support strategic decision makers in resolving the conflicting demands of the institutional environment are discussed.
Connie Van der Byl and Birgitte Grøgaard
The oil and gas industry is vital in the global economy. It is also a turbulent industry, characterized by market volatility and exogenous shocks. Yet, the oil and gas industry has largely been ignored in the management literature. In this chapter, we highlight some of the risks contributing to industry uncertainty and examine how firms adapt and develop resilience. Using the dynamic capabilities framework, we describe how successful firms develop capabilities for sensing, seizing and reconfiguring to mitigate the risks and capitalize on opportunities.